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Work and Skills

Volume 481: debated on Thursday 23 October 2008

I beg to move,

That the House has considered the matter of work and skills.

I am very pleased that we are debating this extremely important issue today. I am conscious that I have taken up the post of Employment Minister at a time when the labour market faces great challenges as a result of the instability affecting the global economy, but I have already been struck not only by the important role that the DWP plays—in particular with Jobcentre Plus—but by the progress there has been in the services provided through the Jobcentre Plus network, in helping people to move away from dependence on benefits and into work, and by the range and complexity of the issues that it addresses daily.

I am also keenly aware that topical debates are principally for Back Benchers, so half hours from me, from the hon. Member for Hertsmere (Mr. Clappison) and from the hon. Member for Rochdale (Paul Rowen) probably will not do. I do not want to take up too much time by way of introduction.

I know that Jobcentre Plus operates in each and every one of our constituencies. Helping people into work and supporting them while they find it is the reason why it exists. We know that the continued success of Jobcentre Plus will be central to our ability to help those among our constituents affected by unemployment to get back into work as quickly as possible. I am very clear that the active system of support developed over the past couple of decades—I am happy to acknowledge that it came partly from the previous Government, but it has been greatly strengthened and deepened since 1997—puts the country in a far stronger position to deal with the consequences of the storms that have been affecting the world economy in recent weeks. However, we also need to be ready to do more and to respond quickly and flexibly to the new issues and challenges that we surely face. I want to spend what little time I have elaborating on the future, rather than on where we have come from.

The Minister and I are former Harrow councillors, and I remember discussing unemployment in that area with him several years ago. Rising unemployment was a problem then as it is now. Will he look again at an issue that I raised when I served on the Work and Pensions Committee? Before the Government close Jobcentre Plus offices, will they look at the unemployment rate in the area? Does it not make sense that Jobcentre Plus offices should be retained in areas where unemployment is highest?

That is a fair point. I am grateful to the hon. Gentleman for making it clear that we served on Harrow council together, as the last time he mentioned it he talked of us being at Harrow together, with all the wrong connotations that that has. I am clearly not an old Harrovian.

The point that the hon. Gentleman raises must be one of a range of considerations in the decision to close job centres. I should emphasise that we are shifting more and more staff to the front line to deal with people. One aspect of the expansion and improvement of the network is the fact that people are accessing the services of Jobcentre Plus in other ways than the old traditional method of going into the office. However, I take the broad point and I have in my diary a series of meetings with people who have such concerns.

In the Select Committee yesterday, we heard evidence that long-term unemployment is set to quadruple to some 600,000 a year. Does the Minister agree that it is a bit odd that a debate on this issue has not attracted a single Labour Back Bencher?

My hon. Friend the Member for Luton, North (Kelvin Hopkins) is in his place. Pointing to attendance is an easy game to play and I shall not get into it. I firmly and passionately believe that the Ulster Unionist party, Plaid Cymru, the SNP, the rest of the Liberal Democrats and my colleagues share our concerns about unemployment. I am not about to suggest at any stage in my speech that Labour Members, present or absent, have a monopoly on sentiment when it comes to the serious issue of unemployment—[Interruption.] Well, they are busy doing other things, probably not least helping people in their constituencies, given that this debate is subject to a one-line Whip. That is entirely a matter for them.

The hon. Gentleman’s first point, about the trends in unemployment and the extent to which we might see a rise in longer-term and harder-to-reach unemployed, is well made, and it goes to the point that I was about to make. Now is not the time to flinch on conditionality, pathways to work or providing active support for the unemployed. That happened—I am not making a political point—in the early 1980s, and we need to learn the lessons of that. I am happy to suggest that the Opposition have learned those lessons. Conditionality and helping the longer-term unemployed back into work remain uppermost in the work of Jobcentre Plus.

I see that the Whip has moved from the Front Bench to the Back Bench, and I shall give way so that he can make his no doubt facetious point.

I am disappointed that the Minister thinks that I wish to make a facetious point, given the seriousness of the problem of unemployment in Chelmsford and the east of England. What is he doing, with the Minister for the East of England, to address unemployment and the need for skills improvement? Can he also enlighten my constituents as to who is the Minister for the East of England?

That is a reasonable point. In the broader context, the National Economic Council, the regional economic councils that are being developed and the regional councils for Ministers are addressing the issue of unemployment, and working with local authorities and regional development agencies on that. I have yet to attend a council for Regional Ministers so the name of my hon. Friend escapes me, which I am sure will assist the hon. Gentleman in his attempt to be facetious—[Interruption.] No, the east of England has not escaped me—[Interruption.] Well, that is a matter for the hon. Gentleman.

The serious point was about the National Economic Council and regional economic development, and how unemployment fits in with that. That point was fairly made and I shall ensure that the hon. Gentleman gets a little paper outlining those structures. I do not know about the east of England, but I know that the east midlands already has in place regional economic forums that meet regularly to bring together all the key partners, including the RDA, the private sector, Jobcentre Plus and others, to discuss economic development and address any deterioration in the labour market. In any case, I say well done to the hon. Gentleman for making his facetious point.

There continues to be a real dynamism in the labour market. There is a huge churn in jobs and vacancies, with people coming on to jobseeker’s allowance and coming off it too. The picture is not static. The House will know that there are regularly as many as 600,000 vacancies, but that figure is also subject to churn. Some vacancies never reach those statistics because they are filled before they can be correlated with the figures.

I am receiving a growing number of complaints from constituents who are taking up jobs after being out of work. They suffer from the delay between the immediate loss of benefits and the receipt of their first wage packet, which provides a clear disincentive to finding work for many people, especially single mothers in straitened circumstances. What steps are the Department taking to try to smooth that transition?

That is a fair point and I will look into the technicalities of it. The transition into work should be as smooth as possible, and there should be no disincentives en route. I am pleased that some 60 per cent. of JSA claimants get back to work within three months, and 80 per cent. do so within six months. Although we need to do better, those are phenomenal performance figures. Nobody yet knows the exact nature of the new inflow—to use the jargon that I have just learned, although I am trying to avoid it—as they may come from different sectors and geographic areas. It is almost a cliché now, but I have said in the past that Halifax and Bradford & Bingley are not simply brand names but places. In those places, there are many employees who are wondering about the consequences of the upheaval in the financial sector. I do not know how that will shake out, but Jobcentre Plus is considering what will happen when a newer cohort of financial professionals presents in greater numbers than they have done before. We need to start looking at such issues.

The Minister mentioned the dynamism of the labour market. Does he accept that part of the problem with the current unemployment figures is the churn caused by people getting a short-term job, then losing it and going back into unemployment? Some of that is negative, rather than evidence of dynamism in the job market. It is important for the Government to ensure that jobs are sustainable, and they may need sustaining through Government help in the crucial first weeks and months.

I accept that. That is why I tried to use dynamism in the most literal sense, to mean a lot of change and a lot of activity. There will be those who will come on to employment at the shorter-term end, and we need to stop that. Increasingly, particularly with some of the harder-to-reach groups, that means we must ensure that when we say that they are ready to work, they are ready to work and can do so in a sustained fashion. I accept that it is in no one’s interest to have a merry-go-round of on-off claimants.

The answer to the question asked earlier by the hon. Member for West Chelmsford (Mr. Burns) is that the Minister for the East of England is my hon. Friend the Member for Stevenage (Barbara Follett).

No, it was just inspiration from somewhere or other. Where it came from is not the hon. Gentleman’s concern.

I take the point made by the hon. Member for Weston-super-Mare (John Penrose) about sustainability. I repeat the fact that 80 per cent. of reported people who go on to jobseeker’s allowance get back into work within six months. That is a very good figure, but clearly we need to do better; we need to ensure greater sustainability. There will always be a hard core of people who go into work, come out, go back in, and then come out. We need to try to prevent that, especially in the hardest-to-reach groups, such as lone parents and others.

I congratulate my right hon. Friend on his promotion and on his new job. He talked about Bradford & Bingley, the financial markets and what has happened. That catastrophe has occurred because financial markets have been left to themselves and globalised without intervention or regulation. Is not the same true of skills? If we leave skills to be developed by the markets, by people learning on the job and by people picking things up, we will suffer the same disadvantage, with other developed nations. Does my right hon. Friend accept that we have to be proactive, to drive skills forward and to teach young people rigorously to ensure that they have the skills and that we do not suffer such disadvantages in future?

I agree with much of what my hon. Friend says. I do not agree that there is now a mixed economy, for want of a better phrase, in skills provision or that there has been a laissez-faire approach that has somehow led to a diminution in the importance of skills. I do not think that that is necessarily accurate. The work that the Department for Innovation, Universities and Skills is doing alongside the Department for Work and Pensions is very important and there has been much progress.

I agree with my hon. Friend that in much of the other work that DWP and Jobcentre Plus are doing we need to start looking forward and to understand the consequences of the economic turbulence, not least in the financial sector, and to respond accordingly to what we think the future of skills provision might look like. I can assure my hon. Friend that a lot of close work takes place between the Department for Innovation, Universities and Skills, my Department and others in that regard, in trying to preserve people in their jobs, to support sectors and to encourage reskilling and refocusing where possible. I was going to come on to that in the short time that I have left.

My hon. Friend will know that in collaboration with the Department for Innovation, Universities and Skills we announced last week a cash injection of some £100 million over the next three years to help people who are newly redundant, or who face redundancy, to move into another job quickly by supporting them to refresh their skills or to retrain. Earlier this week, my right hon. Friend the Secretary of State for Innovation, Universities and Skills announced a £350 million fund that will refocus the in-work support available through Train to Gain to help small businesses deal with the tougher economic climate by developing the skills of the staff.

My hon. Friend the Member for Luton, North might not yet have seen the details of the announcement by my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform of his wider solutions for business and of the company support package that was announced earlier today.

Is this really new money? The £350 million Train to Gain budget was already there. Is the £100 million genuinely new money or is it a re-announcement?

I said very clearly that the £350 million was about a refocus given the context of the situation. I was not saying that it was new money. At the moment, the £100 million is made up of £50 million of new money, via the European Social Fund, and £50 million of Train to Gain money, refocused and reprioritised. It must be right for us to refocus and reprioritise, given the extraordinarily fast pace of change in the wider economy.

I want to discuss the matter in more detail with the relevant Ministers, but I agree with my hon. Friend the Member for Luton, North that there is an issue about the wider life skills that people are getting in schools. If the future is to be a far more credit-restricted period than otherwise, the notion from the 1980s and 1990s that people could secure credit for anything they liked, any time they liked, must change. That level of responsibility and focus on the individual through their life skills is probably something that we need to do more about. I do not accept, either from the DWP perspective or that of DIUS—I was trying to resist saying DIUS—that the circumstances of the provider, whether they are private, third sector or public sector, determine the level of professionalism in what they offer.

Notwithstanding the point made by the hon. Member for North-East Hertfordshire (Mr. Heald), the money that we are making available along with the Department for Innovation, Universities and Skills, the greater focus on Train to Gain, what my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform has said today about support for business and the announcements already made—

We, too, welcome the opportunity to debate work and skills, but before we do so I want to welcome the Minister to his new post. We look forward to debating these issues with him. For quite how long we will be able to do so, I do not know. He will be aware that there was a major reshuffle in the Government ranks just before the summer recess. In fact, so far this year every member of the ministerial team has changed, including the Secretary of State. The right hon. Gentleman’s predecessor was in place for only nine months, and his predecessor for only six months. The right hon. Gentleman might just have enough time to master the jargon and wish us “Merry Christmas and a happy new year” before he is on his way again. However, we look forward to debating with him in the time that is left.

This is a Government debate in Government time. We note the level of participation on the Labour Benches, although we look forward to having a debate with the hon. Member for Luton, North (Kelvin Hopkins) as well as with the sole representative of the Liberal Democrats and my colleagues in the Opposition. Notwithstanding that limited participation—[Interruption.] The hon. Member for Stroud (Mr. Drew) is a latecomer to the debate, in quite what circumstances I do not know.

Notwithstanding the levels of participation on the Government Benches, we understand the salience of this subject to our country today. It is certainly not lessened by last week’s news on unemployment. That news makes it all the more important that we should have an effective system for helping people to get off benefits and into work and, in the case of the newly unemployed, preventing an undoubted blow from becoming a longer-term tragedy.

This time last week, I was in the jobcentre in Harlow, hearing first hand what is happening. Part of the picture seems to be that alongside the rise in the number of people becoming unemployed, there is a reduction in the number of job vacancies. I know that Ministers are apt to talk about the level of vacancies, but I have to tell this Minister that people are reporting fewer vacancies. That is the real experience of people looking for jobs.

The Minister mentioned the situation with Bradford & Bingley and the pain that job losses can cause. In fact, several hundred of the job losses announced by Bradford & Bingley fell in my constituency, in the town of Borehamwood. I was in the jobcentre in Borehamwood a fortnight ago. My hon. Friend the Member for Weston-super-Mare (John Penrose) made a good point about helping people who have come from financial service backgrounds to find work. The Minister’s response to it was also well made. We will certainly work together with the Government on that.

Vacancies are often mentioned as a sign of dynamism in the labour market, but is my hon. Friend aware that the number has roughly halved since July 2004? It has gone down from about 1 million to about 575,000. The number of vacancies usually halves in a recession. That will mean that if we go into recession, we will be looking not at a dynamic labour market but a stultified one.

My hon. Friend makes a very important point about statistical trends, and it is borne out by what people tell us that they experience when looking for a job.

Quite apart from people who are unemployed and in the job market, there is a longer-term problem that we must not lose sight of. Behind the unemployment statistics, there is a picture of deep-rooted worklessness and economic inactivity that has persisted for a number of years. It has been aggravated by a lack of skills in key areas and in some sections of the population.

The official measure puts unemployment at 1.79 million, but we know that millions more people who are not in the labour market are economically inactive for a number of different reasons. The national statistician has told me that, of the people who are economically inactive—and quite apart from those measured as unemployed—there are 2 million who say that they would like to get a job. In many cases, they could get a job with the right help and support but, as matters stand, that is not always available for them. It may be that many of them are present in the ranks of those in receipt of incapacity benefit, and at 2.6 million people that remains a stubbornly high figure. It is a particular worry that, in the past seven years, the number of claimants in receipt of incapacity benefit for more than five years has increased by 270,000—a total that accounts for the majority of incapacity benefit claimants.

All too often, existing claimants have been put at the back of the queue. It is very much part of our thinking that, wherever possible, we want to help all economically inactive people, including the hardest to help. I invite the Minister to turn his attention to our policy proposals in that regard.

With that in mind, does the hon. Gentleman not think it rather strange that the Department should continue to remove people working in Jobcentre Plus? Would he like to join the campaign of the Public and Commercial Services Union to draw attention to the need to stop that? Does he agree that there should be a moratorium on those job losses?

We would certainly join forces with the hon. Gentleman and others in giving individual help to people. I invite him to look at our proposals to put in place a funding mechanism to allow that help to be provided, including to the hardest to help. Under our proposals, they would not be at the back of the queue while the “easier” people are helped first.

We should not allow ourselves to be misled by the picture that is sometimes painted about the level of employment in the UK. In part, that picture reflects the number of people from both inside and outside the EU who come here to work. In those circumstances, talking about the level of employment is not the same as getting economically inactive people back to work. Ministers need to be aware of the scale of what is happening with people from inside and outside the EU coming here to work, and its effect on the employment level.

Two weeks ago, the Secretary of State for Work and Pensions asserted that

“800,000 more UK-born people are in work than there were in 1997.”—[Official Report, 7 October 2008; Vol. 480, c. 205.]

A different complexion is put on that figure by what the national statistician told me this week in a written parliamentary answer. She said that, over the same period, 1.7 million people who are non-UK born have found work in the UK.

Similar deep-rooted problems exist in the field of youth unemployment. It is a simple yet salutary fact that, despite all the claims made for the new deal, there are more unemployed 16 to 24-year-olds in the country today than there were in 1997. That may have been what led the right hon. Member for Birkenhead (Mr. Field) to write of the new deal a week ago:

“It is little short of a calamity: 300,000 new dealers under 25 have had to enrol twice on the course, 88,000 have enrolled for a third time and more than 25,500 have started the scheme four or more times. The number of young people not in employment, education or training is at a record level”.

Although I might not go quite as far as the right hon. Gentleman in calling the new deal a “calamity”, I hope that we can all accept the finding of the recent report from the Social Market Foundation. It said that the recent performance of the new deal had been less than impressive and that the number of job outcomes had “dropped significantly”. I hope that we can make common cause on the new deal, as the Minister’s predecessor, the present Financial Secretary to the Treasury, wrote the foreword to the report and welcomed it.

It is welcome that the Government have recognised the problems with the new deal, and that they have decided, in effect, to abolish the substance of the new deal programmes. We want to take a constructive approach to bringing help to unemployed and economically inactive people. We have brought forward our own proposals, and I commend them to the Minister. We have advocated the early assessment of people’s needs, tailoring support to individual needs, sustained support, mentoring, getting people into sustainable jobs—an important thing in the present economic climate—and putting in place the funding mechanism that I have mentioned already and that will enable all that to be achieved.

Of course, equipping people with the right skills will be very important in helping them to find work. It will also help to keep people in work who have found work after being unemployed, and help those who have yet to enter the labour market. Skills are vital for obtaining work and for making progress once in work. The Minister may have wanted to say a little more about skills if time had permitted, but the Opposition have brought forward our own very significant policy proposals in that regard.

We are conscious of the background to the problem and of the challenges ahead, and recognise that much remains to be done to ensure that skills are as widespread as possible in our country. We understand that there are 5 million adults who are functionally illiterate, and several hundred thousand young people who are not in any kind of education, employment or training.

It was welcome to hear the Minister set out a couple of examples of how the Train to Gain budget will be refocused. As far as I can see, the Train to Gain process has involved an awful lot of certification of people who already have skills, and not much in the way of the creation of added-value skills. In many cases, it has created a huge deadweight cost, with Government money used to pay for training that was already going to happen under existing company budgets.

My hon. Friend makes his point extremely well. Far too much of what has been claimed to have been achieved has been the assessment and certification of skills that people already have. That has taken precedence over giving people the skills that they need, especially in the work place. I am very interested to hear that the Train to Gain money is to be refocused. I am not sure what that means in this context, but doubtless we shall find out in the fullness of time.

It is common ground between us that more needs to be done to help people to reach higher levels of skill. Last year, the Secretary of State for Innovation, Universities and Skills accepted that we must do better if we are to be competitive in a global economy and to offer new opportunities. To achieve that, however, we need to have the right framework in place.

I remember when the Bill that became the Learning and Skills Act 2000 passed through this House. It established the learning and skills councils to fulfil the role of providing people with skills and apprenticeships, and replaced the training and enterprise councils, even though they had a successful track record of devolving responsibility to the local level and involving private enterprise. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) played a large part in setting up the TECs, and I recall him describing the LSCs as being merely a change for change’s sake.

On top of that, we now have more change. Just a few years on, it seems that the LSCs were not the answer after all. They are to be replaced by three new bodies, to add to the pantheon of bodies that are involved in the provision of training and further education. The Government now say, as the Secretary of State the Secretary of State for Innovation, Universities and Skills put it, that they want to put

“employers at the heart of the skills system.”—[Official Report, 18 July 2007; Vol. 463, c. 298.]

That is precisely where employers were before the Government interfered with the training network in the first place.

We have brought forward our proposals on skills. Putting skills in the work place and putting employers in charge of providing them is at the core of our proposals. We want to bring help to small and medium-sized enterprises to enable them to do that. We want the process to give special help to them and to the people whom we now call NEETs—not in employment, education or training. We also want to give a better deal for adult community learning.

We have a very wide agenda on skills. We recognise that there is a need for fresh thinking on the subject, and we will provide it.

I came along to make one or two interventions, but I am pleased to have the opportunity to make a slightly longer speech. I am a co-chair of the all-party group on further education and lifelong learning, and I am glad to see my fellow co-chair, the hon. Member for Weston-super-Mare (John Penrose), in the Chamber. I used to teach in further education, and have a long-term interest in skills; I used to read and write a lot about the subject in my time as a trade union research officer. I have always had a deep concern about the poor skills of so many of our fellow countrymen and women when it comes to employment.

In recent years, the Moser report has pointed out that half the population are not functionally numerate. Indeed, 50 per cent. of the population do not understand what 50 per cent. means. We have a problem that has not been addressed at school level, let alone at training level. During the 1980s and 1990s, the National Institute of Economic and Social Research undertook lots of research comparing us with other countries. It found that in Germany, apprentices would typically have many hours of pedagogy—rigorous teaching—every week. When that was explained to those who led the training and skills industry in Britain, the response was, “Well, that wouldn’t be appropriate in the British context.” That was just a cop-out; they were not prepared to undertake that level of skills provision.

Comparisons were made between apprentices in France and Britain. It was found that apprentices in France knew basic mathematics, and when they took a very simple mathematical test they could get all the questions right in a few minutes. In Britain, a comparable group of apprentices could not do any of the sums at all. There were serious problems at a very basic level. Those problems are still there. I will say to my right hon. Friend the Minister that the Government have recognised that and are trying to deal with it, particularly at school level, but we have not got there yet. My concern is that we have not much considered the interface between the teacher or lecturer and the apprentice, schoolchild or student. We do not deal with the issue at that level.

I do not know whether the hon. Gentleman remembers the report by the Institute for Fiscal Studies and the Centre for the Economics of Education on the extent to which qualifications give a person an earnings advantage in the labour market, but its findings on level 2 national vocational qualifications were stark: they had no impact at all, although level 3 qualifications did. Does he not agree that there is a strong lesson there on how we build apprenticeships and the sort of qualifications that really count to employers?

My concern is that we have a lot of qualifications, but underneath the qualification the level of skill is often inadequate. German factory workers can typically not only do mathematics but speak a foreign language. They can handle a foreign language, and their language, very well. We are failing in that. The OECD has shown time and again that the gulf between the best educated—the highest achievers in Britain—and the lowest achievers is wider than that in almost any other country in the developed world. We have to address that problem.

There has been a lot of debate about the fact that we are facing a recession, in which there will be unemployment. There will not be jobs. It is obvious that supply-side reforms, welcome though they are, will not solve a demand-side problem. I am glad to say that last weekend, the Chancellor mentioned the great John Maynard Keynes again. I used to teach economics, and Keynes used to be highly regarded—in fact, I still regard him highly—but we have been through a period of madness in which lesser brains have dominated the economic policy agenda. About 15 years ago, I had a debate over lunch with a former deputy economic adviser to the Treasury. I asked him a simple economic question; he could not answer it and lost his temper. I suspect that Keynes would not have done that. According to last night’s Evening Standard, even Bertrand Russell found Keynes’s intelligence intimidating. I do not think that any of the monetarists intimidate me. We have to look to some of the Keynesian recipes, used in the ’30s to solve our problems. When the economy recovers, we will need people to be skilled. The modern world cannot rely on people just picking things up on the job, without being able to do mathematics or even handle their own language very well. We have to tackle those basic skills problems.

There are many small companies, and many more smaller companies today, and some apprenticeships cannot be sustained by them. They are fearful of taking on an apprentice because they fear that once the apprentice is trained, he or she will get a job with someone else who pays better. One case that I have written to Ministers about concerns those in the historic vehicle restoration business. Apprentices in that business are highly skilled, but as soon as they are trained, they can get much better paid jobs in the motor sector looking after insurance repair jobs. People in that field are very highly paid; of course, insurance companies pay well for cars to be repaired. Apprentices have to be sustained properly in such small companies. The only way to ensure that is to place a levy—based on turnover, not headcount—on all companies, so that the whole economy pays to sustain apprenticeships, particularly among small companies. I hope that I can urge my right hon. Friend the Minister to persuade his friends in other Departments that the issue is important.

I have said most of the things that I wanted to say. Many other Members want to speak—

Perhaps hon. Members came just to listen to my speech, but I guess that they do want to speak. I am grateful to have had this opportunity, and hope that some of my points will be taken on board.

I too welcome the Minister to his position. It is the first time that we have debated together. I welcome the opportunity to debate this issue, given the context: last week, the largest rise in unemployment for 17 years was announced, bringing the figure up to 1.79 million. It is likely to rise to more than 2 million by Christmas, so the issue is obviously important.

I begin by concentrating on what the hon. Member for Luton, North (Kelvin Hopkins) said. It is true that, when it comes to skills, this country has let itself down in the past. The Leitch review set us ambitious literacy and numeracy targets. In 2005, some 85 per cent. of adults were classed as numerate, and 79 per cent. as literate; we are planning to get that figure up to 95 per cent. Those are ambitious, difficult targets.

The centrepiece of the Government’s skills policy in the past has been Train to Gain. I note what the Minister said earlier about refocusing that, and moving £50 million from the Train to Gain pot and using it to deal with unemployment. The Train to Gain pot, which will be £1 billion by 2011, has been consistently underspent. A statement was issued recently, which I have not seen, to say that £350 million of that money will be refocused on small and medium employers. I would certainly welcome more information on how that will happen. It is quite clear that employers have not taken up the Train to Gain money because of the often bureaucratic and difficult process that they had to go through to access it. I welcome anything that makes that process easier.

It is true that in a period of recession—I heard what the Secretary of State said on the subject last week—we have to learn the lessons from the previous recession before deciding what to do. It should not just be a case of paying people benefit once they are unemployed, as happened in the past. We need to do more to help them to find employment and to do gainful work.

My area has a particular problem: young people of no fixed abode come to it to look for work. They are in a double bind. The situation is different now because of the lack of affordable housing in places such as Stroud. Will the hon. Gentleman accept that the problem is not just about finding someone a job? Often it is about finding them accommodation so that they can get a job.

I agree, and later I shall come to what we can do to deal with those two problems. This month, the number of jobseekers has risen from 31,800 to 929,900. I accept the point that the Minister made: people are moving in and out of those figures. Nevertheless, the large number of long-term unemployed is an issue of concern.

I want to talk a little about what the Government can and should do to get more people back into work. I want to use as an example some of the work that my local council in Rochdale has done to get people into work, because that is vital. Rochdale has set up a joint project with Oldham called J21, which is tied to the development of the large industrial development at Kingsway. Between them, members of the Kingsway recruitment team have trained 1,300 people and helped get them into work over the past two years.

In Rochdale and elsewhere, however, there has been a large increase in the number of redundancies. I do not know whether the Minister saw the announcement last week by MFI that a number of its stores would close. After the receiver looked at which stores were viable, the closure of 86 stores was announced. That announcement was made in a national newspaper—the Daily Mirror—last Friday. If employers are to issue redundancy notices by that method, it brings into question how such things are done and what is the right way of going about it. There was no warning to the employees who were affected: they read it in the newspaper. If unemployment is going to rise, we must make sure that we have mechanisms in place to deal with that. The Minister’s commitment not to close Jobcentre Plus offices in areas with high unemployment is therefore welcome.

I am glad that the hon. Gentleman mentioned redundancies. Does he agree that, particularly with the announcement of redundancies for people who are middle-aged or older in the jobs market, it is unfortunate that in the past couple of years the Government have begun to focus further education funding on training for people who are under 19 and certainly under 25? FE’s traditional role to reskill people in their 30s, 40s and 50s after involuntary redundancy has been lost, and that will impact materially on the ability of those people to retrain and to get jobs in this difficult economic climate.

I completely agree, which is why I am interested in knowing what the Minister meant when he spoke about refocusing Train to Gain. In the next few years, we will not be talking so much about upskilling as about reskilling.

In that context, I wish to raise the issue of adult apprenticeships. The Government put £25 million into that pot last year, and the figure will rise in a couple of years to £90 million. Given what we are going through, the Minister needs to look at whether that pot of money can be substantially increased. By comparison, nearly £1 billion is being spent on youth apprentices—I have no problem with that, and welcome the provision for more youth apprentices—but more adults will be unemployed, so there is a definite need to ensure that the issue is addressed.

I am running out of time, but I believe two more things must happen. We need to make sure that we achieve better links with housing and that we use different projects to do so. The Chancellor has said that projects will be brought forward, and I should like commitments to be written into those projects to—

I begin by welcoming the commitment of the Liberal Democrat spokesman, the hon. Member for Rochdale (Paul Rowen), to the Conservative policy of strengthening and increasing the number of apprenticeships. We started doing that in government, as it was Lord David Hunt who came up with modern apprenticeships schemes as a way of improving young people’s education. It is something on which the Government, to give them their due, have built, but we would like to expand it still further.

Does my hon. Friend agree that an awful lot of the Government’s claimed increase in the number of apprenticeships is, in fact, a rather creative piece of accounting, because modern apprenticeships were all level 3 and above, whereas the figures for what are now called higher apprenticeships have dropped substantially since 2001? All the increases have taken place in modern apprenticeships at level 2, which offer substantially less valuable employment opportunities.

I agree. I was going to make the point that level 2 does not really hack it, and that we need to provide apprenticeships at level 3. We must move people at level 2 to level 3 if we are to achieve gains in employability and the amount they can earn, which is increased by having better qualifications.

At the outset of my contribution, may I make a point about topical debates? I was a member of the Modernisation Committee, and I am a strong supporter of topical debates. However, they depend on the Leader of the House choosing a topic that the House wants to discuss and considers topical. The Minister should report back to the Leader of the House on today’s feeble attendance. Work and skills was a subject that Labour Members used to debate the whole time, particularly when the economy was doing better and the labour market was stronger. Today, to have literally one Government Member giving a speech, when the Leader of the House herself chose the subject, is not good enough, and it will lead to topical debates dying out if things carry on like this. The Minister may like that idea, but I do not.

I have followed the labour market a good deal over the years: I served on the Employment Committee, I was Conservative spokesman on the subject, and so on. Earlier this year, I was concerned that the quarterly survey published by the recruitment industry showed that the industry was robust in finding short-term positions for people, but that permanent positions were proving hard to fill. That is often a precursor of a recession: companies across the country are not prepared to make the commitment to the long-term employment for staff. Recent figures show that the claimant count has increased by 31,800, and the labour force survey showed an increase in unemployment of 164,000. The projections from the think-tanks are alarming. Yesterday, the chief economist of the Social Market Foundation gave evidence to the Select Committee on Work and Pensions and said that his estimate was that long-term unemployment, which is just under 150,000, would quadruple over the next couple of years to 600,000.

Recently, the Ernst &Young ITEM club produced a survey on the overall scale of unemployment, both short and long-term, and suggested that the claimant count would double. Against that background, the Government must review their policies on employability practices. I wrote a pamphlet about trying to audit the new deal in 2004 entitled “Auditing the New Deal: What Figures for the Future?”, in which I made the point—and I think that many people agreed—that providers of the new deal made quite a bit of money on the back of the general improvement in the labour market. The labour market expanded and, yes, people found jobs, but no one who looked at the issue seriously was of the view that many of those jobs were the result of someone having a new deal interview. When the Government hit their target of 250,000 young people going into employment, the National Audit Office produced a report saying that only about 8,000 of that total would not have found work anyway. Of course, 8,000 is something, but it is nothing like what was being claimed.

The Minister should accept as part of his new responsibilities that the new deal was a policy that appeared to work well when the wind was behind it, the labour market was expanding and all was set fair. Now that we are in a situation in which it appears that the opposite is going to happen and that there will be a contraction in the labour market, the Government must look again at their capacity to deal with unemployment and how they will deal with the longer-term unemployed.

It is often said that there are many vacancies in the economy. It is true that there are about 575,000 vacancies in our economy, but in 2004 there were almost 1 million. The last time we had a major recession was in 1990-91 and, in that recession, the number of vacancies halved and unemployment rose sharply. If, as seems to be the case, we are to have a major recession, all sorts of assumptions that the Government have been making about a flexible new deal must be changed.

In my pamphlet, I suggested that we needed to focus the effort on the people who had genuine barriers to employment and tailor the packages to their needs. There should be an early triage to find out what the problems are—the person may be an alcoholic, may be unable to read and write, or may have one of the other classic barriers to employment—and to offer them without delay a tailored package probably provided by the private sector or the not-for-profit sector.

I pointed to the evidence in America, which was very promising. Since then, as has been said, there have been reports about the Wisconsin experience, which has been remarkable. By means of tailored packages, the claimant count there has been reduced by 80 per cent. in three years. That is a tremendous achievement. Such focused approaches are the right way forward. Although it does not go as far as I would like—it does not have the triage and there are faults with it—the flexible new deal is a step in the right direction.

However, all the prime contractors who are waiting for the Government’s decision next February have been assuming that the labour market would be roughly what it had been. The Government are producing performance targets that the prime contractors are supposed to aim at. Those targets do not assume that we will have a quadrupling of long-term unemployment. If we do, the prime contractors will have a number of problems. First, do they have the capacity to cope with 600,000 rather than about 150,000 unemployed? That is a massively higher number. Secondly, the flexible new deal is outcome-based, so the payments are back-loaded. That means that the prime contractors are taking on substantial risk while the individuals receive advice, their tailored packages, and so on.

It is one thing to take a risk on 100,000 people; it is quite another to take a risk on 600,000. The capital needed to be able to do that would be substantial. As the Minister is starting afresh in his role, will he have a serious look at whether the model will work in the world of employment that we are entering, or whether it is necessary for the Government to think again about how they underpin the flexible new deal to ensure that the capacity exists?

It is all very well speaking about prime contractors, but others are involved. There are the subcontractors—good-hearted charities, voluntary bodies and not-for-profit providers who desperately want to help people with social and medical problems. There are the individuals themselves. Some of the most vulnerable people in our society are in that category of the long-term unemployed. For the sake of the small subcontractors—the good people who want to do good works—and the individuals and for the sake of the overall financial model, will the Minister examine that model carefully to ensure that it is robust?

The flexible new deal is a much better model than the old new deal, which was about box-ticking and taking credit for the rise in the jobs market. It would be a pity if one looked back at the improvement in what is being done and considered it a failure because the background had changed at a crucial time.

Does my hon. Friend agree that one of the factors that the Minister should consider in dealing with the risk that my hon. Friend is describing is that any contractor should have a substantial capital cushion? Contractors must have a big enough balance sheet to be able to absorb the risks of the economic cycle and to ride out the ups and downs. It may also be necessary for the Government to consider differential payments in the case of those who are hardest to help and furthest from the job market. Success in getting someone like that into work would result in a much higher payment than getting someone into work who is well skilled, does not have the sort of barriers that others might have and is easier to get into employment.

I am grateful to my hon. Friend. The next point that I had intended to make was about the winner’s curse, and the point beyond that was about the differential—

Not at all. It is good that we are thinking along the same lines.

With reference to the winner’s curse, if it is simply a matter of quoting the lowest price, there is the risk that the contractor who gets the job may not be robust enough or have enough capital to provide the service in difficult times. If the figure of 600,000 long-term unemployed is realistic and those people cannot be placed in employment because long-term unemployment is rising and the general background is poor, the financial risk could be significant. My hon. Friend made the point more succinctly.

Some of those with barriers to employment need a great deal of help. They are people with substance abuse problems, people with a history of back trouble, which can be expensive to cure, and people who have mental health problems and a range of other difficulties. It is necessary to make sure that the rewards for getting those people into work are high enough to ensure that that happens.

The evidence from Australia is that the people nearest the labour market were finding work—being pushed across the line—rather than those who were the hardest to help, where the benefit to society would be greatest and the premium should be adequate. There is a case for having a tariff for getting into work the hardest to help, and that tariff should take account of the four or five main conditions that people with barriers to employment have.

Finally, I shall say a word about skills, if I may do so without trespassing on the good will of the House. My first point is about literacy and numeracy, a topic on which I spoke recently during the Committee stage of the Education and Skills Bill. It is true that it is much more difficult to get a job if one cannot read, write and add up properly. It is at least 12 per cent. more difficult for people in that tier to get a job and their earnings are lower. Functional illiteracy is often associated with a household that is deprived, with poor health and with a household where the head of the household is an unskilled worker who is also often unable to read and write. The problem is thus generational, leading to a cycle of deprivation.

I am interested in what the hon. Gentleman is saying about children from illiterate households who cannot read. Has he seen the recent television coverage of the use of phonics to get those children reading, and what wonderful results were achieved?

That is exactly the point. I have a very good special school in my constituency, Woolgrove, which takes youngsters who one might think would never learn to read, but they do. It is because the school uses methods such as synthetic phonics. If a child with such obstacles can be taught to read using synthetic phonics, it is madness not to provide the same service to people who do not have those special barriers. Yes, let us make sure that we use synthetic phonics and teach our young people to read.

Although we welcome the fact that the Minister and his colleagues are trying to rescue those who did not learn to read at school and bring them back, it should never have got to that point. The problem should have been solved when the youngsters were seven or six, not when they are 17, 18, 25 or much older. I applaud the fact that the Government are trying to rescue the situation, but things should never have gone that far.

My second point is about level 2 qualifications. According to all the research, graduates are likely to earn 71 per cent. more than those with no qualifications; the figure is 50 per cent. more for those with two good A-levels or an apprenticeship at level 3. Level 2 qualifications, however, do not give a gain, yet a lot of the Government’s effort is going into level 2.

The Minister has a difficult job at a difficult time, but let us try to get things right. The hon. Member for Luton, North (Kelvin Hopkins) made the point that other countries are rigorous about apprenticeships and professional qualifications of that sort and that people there are taught at level 3. If, as Ministers say, an educational ladder of opportunity has to be climbed—and Leitch did say that beyond 2020 there would be very few jobs for people without qualifications—it is not good enough to teach people something; they have to get to a level that is higher than the one there used to be. The Government accept that, but level 2 is not the answer. Level 3 is what we should aim for. A topical debate on an important subject is the sort of debate that we should be having, but it is a pity that more Members have not been here.

I want to pick up on the skills aspect, about which my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) has been talking. I want to consider how the skills agenda is playing out on the ground and in practice. I shall do that from the perspective of my constituency, to the extent that it illustrates a number of broader points.

I want to illustrate what is at stake in getting the skills mix right for my constituency. It is home to a centre of world expertise in nuclear fusion technology at Culham. The centre is a place of not only cutting-edge science, but cutting-edge engineering. In January, the centre will hold an exhibition here, and I hope that Members will take the opportunity to see the skills on display. Those skills are not required only for the current project, which has a finite life; they are also required as a major part of skills export from the UK to the fusion projects throughout the world in the coming years, in which engineering expertise at Culham will play a major part for the foreseeable future.

The centre is not an isolated example; it is part of an arc of technology and engineering that stretches from my constituency into that of my hon. Friend the Member for Wantage (Mr. Vaizey), which includes Harwell, the Rutherford Appleton laboratory and the new Diamond Light Source project, from which no self-respecting medical research company will want to be more than spitting distance in future because of the enormous scientific and technological expertise that it offers.

What is at stake in getting the skills mix right is the international competitiveness of that whole arc of science and technology in an area that is genuinely world class and cutting edge. Taking forward the skills agenda on the ground is therefore causing considerable local concern, which is caused principally by the lack of flexibility in delivering the skills agenda on the ground and ensuring that it matches skills training with local requirements. The consistent complaints that I get from organisations across the board, in both the private and public sectors, is that Jobcentre Plus, the Learning and Skills Council and programmes such as Train to Gain are far too driven by top-down national policy and fail to give enough recognition to huge local variations.

Let me give an example of such a variation in the context of Train to Gain. My constituency lies in a county that has very few benefit claimants of working age; the number is half the national average and lower even than that of the rest of the south-east. Claimants for jobseeker allowances account for less than 1 per cent. Some 84 per cent. of employment is at the top end, much of it in the service sector. Some 70 per cent. of adults of working age already have a level 2 qualification, and almost 84 per cent. have a level 1 qualification. That leaves 7 per cent. with no qualification at all, and it is right that skills programmes should address that 7 per cent., who are already a major feature of a considerable amount of co-ordinated local activity from a number of organisations in the public and private sectors.

To pick up on the point made by my hon. Friend the Member for North-East Hertfordshire about children and teaching in schools, I should say that I am seeing innovative work in trying to use children who have been well taught as an influence on parents and grandparents who have had a bad experience of education, so that those parents and grandparents can be brought back to some form of education and skills training.

However, in the round, the distribution of training in my area is clearly skewed to level 1 and 2 qualifications, and not to levels 3, 4 and above, which the area needs if it is to maintain its international competitiveness in scientific and technology establishments, which are intensive in research and development. I receive complaints that the parachuting in of Train to Gain is more about achieving a uniform approach than about recognising the need for that flexibility. Further education colleges have expressed concern that the constraints on training have been too great. Initially, the colleges welcomed the prospect of those constraints being relaxed and of the £350 million announced in the recent ministerial statement. However, as time goes on they are getting more and more suspicious that that is taking their eye off the need for front-line skills, which are suffering in comparison with back-office skills.

Does my hon. Friend agree that the issue is not only about recognising the local skills needs of the employers in a particular area, important though that is? It is also about making sure that people providing training understand the skills shortfalls in the local unemployed population. Those will also vary very significantly, depending on the local community and its cultural background. The training has to be tailored to match. If we get one side of the calculation right, we have to make sure that the other side balances as well.

I thank my hon. Friend for that valid point, which illustrates again the need for flexibility and for things to be tailored. May I also congratulate him on being the first Member to have intervened on a speech that I have made since I have come to this House? [Hon. Members: “Hear, hear!”]

I return to the point about the focus on back-office skills within the refocusing of Train to Gain. I have to say that that is of no interest to businesses in my constituency, which have taken matters into their own hands, with my encouragement. Businesses in Henley have put together a scheme to draw on the expertise of a considerable number of successful entrepreneurs, chief executives and people who have run successful small and medium-sized businesses. As an act of community participation, those people are prepared to put in time, free of charge, to make sure that businesses in the area are up to scratch and maintain their competitiveness and skills.

The distinction of second intervener is one of which I am very proud.

The hon. Gentleman has been talking about his constituency, which is a fine place with lots of highly educated and skilled people. However, have not the Government a duty to try to compensate in areas without such advantages and where skills have to be driven much harder if there are to be better opportunities in future?

I thank the hon. Gentleman for his point. I agree with him, and he has illustrated my point that one size does not fit all and that things need to be much more tailored to the needs of individual areas. I do not doubt that my constituency and the area around it are full of advantages that are not shared elsewhere, but that is precisely the point that I am making in this speech.

My hon. Friend now has a hat trick of interventions.

Does my hon. Friend agree that half the vacancies nationally are hard to fill or due to skills shortage? That is a worse problem in an area such as the east or the south-east than in some of the areas that the hon. Member for Luton, North (Kelvin Hopkins) mentioned. It is not true that skills shortages are worse in the most deprived areas.

I thank my hon. Friend for making that point. As I said, it is important to ensure that skills programmes address the 7 per cent. who have no qualifications at all, particularly in an area such as the south-east, which has certain advantages and where there is a lot of top-end loading on the skills side.

The break-up of the Learning and Skills Council and the establishment of local strategic partnerships offers hope that resources can be focused on local priorities. As hon. Members have said, it is crucial that local business plays an important part of any such partnership. Personally, I think that it is useful if those partnerships are led by businesses providing practical input right from the top. However, participating businesses are concerned that they will, in any case, ultimately fall foul of Government micro-management of the whole process.

There are four main concerns. First, the market is too complex and confusing for those seeking training and for employers. Secondly, Train to Gain is poorly understood. Thirdly, there are fears that the demise of the LSC will lead to a multiplicity of quangos and further complications in the market. Fourthly, there are practical concerns about diplomas and the relationships to other legislation. The stories about building trade students not being allowed on to building sites until the age of 16 for health and safety reasons are not apocryphal. Training should not be theoretical in these circumstances; it should be practically based and experienced on site.

A number of hon. Members have mentioned the need for more apprenticeships. There is huge enthusiasm for apprenticeships, and it runs very wide. My own county council, of which I am still a member, has some 50 apprentices in fields from social care to civil engineering. Large companies in the area are enthusiastic about apprenticeships, but so too are local small and medium-sized businesses. When I recently visited Henley college, which provides training in these areas, people were effusive in their praise for the commitment of small and medium-sized enterprises to training and employment, not only in providing apprenticeships but beyond apprenticeships. I urge the Government to consider introducing further flexibility in this context.

Does the hon. Gentleman agree that a barrier to that flexibility is fixed start dates built around academic terms? Many employers need flexibility as to when apprenticeships can start.

The hon. Gentleman is right. Businesses do not work to a set timetable, and the barriers that inhibit apprenticeships must be driven out of the system.

I urge the Government to think about introducing further flexibility in the skills arena and to reassure us that in doing so they will take into account the importance of competitiveness in how these programmes are run.

I apologise for not intervening on the hon. Member for Henley (John Howell). I felt for a while that that was obligatory, so I am sorry that I was not quick enough to do so.

I thank the hon. Member for Hertsmere (Mr. Clappison) for welcoming me to my new position. I look forward to working with him and his team, in between being Minister for employment and Minister for London. I know him to be a gentleman and someone who is very studious in whatever brief he has. I also look forward to working with the hon. Member for Rochdale (Paul Rowen).

I would take three key words from this debate: practicability, simplicity and flexibility. Those three aspects underline much of what has been said in all the perfectly fair contributions. It is important to return to my little faux pas about my hon. Friend the Member for Stevenage (Barbara Follett), because my hon. Friend the Member for Luton, North (Kelvin Hopkins) is both right and wrong. Yes, of course, given the public funding and the need for money to go where we can exact the best return, we must concentrate on areas where the lack of skills is at its greatest. However, I do not accept that areas such as Henley, which we have just heard about, can almost be left alone. The regional contribution of each and every area, whatever its starting base, is hugely important for our economy.

Wherever we are going in the current economic downturn, its impact could be desperately disparate and different in various areas, and the relativity of its impact could be very important. For example, on the latest figures, the most significant increases in the claimant count were in the south-east and south-west, albeit from a low base relative to other areas—but that does not mean that we should not be doing all that we can, as flexibly as we can, for the south-east and the south-west. The lowest increase was in London—5 per cent. as opposed to about 30 per cent. in the south-east and south-west—but we know that there is a huge quantum of unemployed in London because of the nature of its labour market. The National Economic Council, the regional economic structures and the Council of Regional Ministers should be pushing back up to the national level the immediate concerns and fine-grained nuances of each and every labour market in terms of jobs lost, vacancies and skills shortages. Those points were well made, and I will try to ensure that that occurs.

As the hon. Member for Henley said, that granularity in getting closer to what is going on in localised labour markets will be one result of moving down from the Learning and Skills Council to local strategic partnerships. What local employment partnerships have done, where they have been successful—nearly 50,000 jobs have been secured through that process—is another aspect of his point about having fine-tuning and sensitivity to what is occurring in local labour markets. That needs to happen at any time, but in a period of downturn, significant or otherwise, it needs to happen all the more. I also take his points about practicality and about having greater flexibility in matters such as Train to Gain.

In response to the hon. Member for Rochdale, I point out that the announcement on the £350 million was made yesterday, principally in the other place, but my hon. Friend the Economic Secretary to the Treasury spent an hour here elaborating on it. If the hon. Gentleman reads Hansard and still needs greater detail, I will happily provide it for him. This is partly to do with a sharper focus on getting from level 2 to level 3 as well as other refocusing in terms of Train to Gain. More details on how to achieve that will be elaborated on in the coming weeks.

I do not take so seriously the comments that were rather cavalier with recent history. For the record, since 1997 long-term claimant unemployment has fallen by more than three quarters and is close to its lowest level for 30 years. Let us have the debate about nuances and trends, but not by undermining what has gone before. It is easy to assert that there are more unemployed 16 to 24-year-olds now than in 1997, but youth claimant unemployment has fallen by a quarter and long-term, and six-month-plus youth unemployment has fallen by over three quarters.

I accept that what is very important, as the hon. Member for Hertsmere said, is not necessarily the claimant count, nor even the International Labour Organisation figures, but the number of people who remain in a workless state or entirely economically inactive. We are trying to address those individuals, not least by introducing the employment and support allowance on Monday, enabling us to go through the various incapacity benefits available to individuals to replace them with one allowance, for precisely the reasons the hon. Gentleman suggests, so that no one is left behind. Those in that category who do want to work—I fully accept that there are plenty, some of whom we are not getting to as rigorously as we should—should be helped in that fashion. That will aid with regard to simplicity, as well.

The Minister was making a point about flexibility, which I think is important. Six months ago, I encountered a case in which someone wanted to train to be a driving instructor. There was a cost for the relevant course, but Jobcentre Plus said that he was not eligible. I hope that we will look at the criteria that are used, because that course would have got him a job, but he was not eligible. Will the Minister look into such cases?

If the hon. Gentleman wants to write to me about the specifics, I will certainly have a look, but he will know that the Green Paper contains proposals to increase the flexibility of job centre personnel advisers, allowing them to take better account of the specific needs of each and every customer early in the process. I take his broader point about things being done as early as possible.

There are some pilots under way that deal with hon. Members’ suggestions about bringing employment and skills together more readily. We are looking at developing further all aspects of the integrated employment and skills service for people including skills screening—I almost said silk screening; that is obviously a subset of skills screening—for new claimants, skills health checks and skills accounts, and hopefully we will be able to implement those further to bring the needs of individuals and employers and that backdrop of analysis of a local area together far more readily. Whatever the shortages, even in areas as relatively affluent as Henley, the industries described by the hon. Member for Henley are important, and we need them to be performing as expertly as possible, and with as much capacity as possible, for the wider economy.

One of the points made by the hon. Member for Henley (John Howell) concerned larger employers sustaining apprenticeships. I want to reinforce the point I made about small employers and the difficulty they have in sustaining apprenticeships. Will the Minister take back to his colleagues my suggestion that we ought to look again at a training levy system to help to subsidise smaller employers to retain and sustain apprenticeships for the future?

I shall certainly take that back, but I am sure that my hon. Friend knows the answer as well as I do. The broader point about sustainability has been well made, and it was a theme of our debate. Getting people back into work in a sustainable fashion is better than having a sort of merry-go-round, and being able to sustain apprentices in the small business sector is central to the experience and reward that individuals can get out of the process.

That is why much of the £350 million refocus will be on the small and medium sector, as everyone knows. We are trying to concentrate on small businesses—a sector that may suffer more from the lack of skills and lack of speed in reskilling the local labour market. By doing that alongside the other fiscal things we are doing, we will try to sustain those small businesses. Much of the Government’s focus over coming weeks and months will be all that I have described regarding the route from unemployment back into employment, but it will also be about wider fiscal interventions to ensure that jobs do not go in the first place, which is very much part of the equation.

I take seriously the point of the hon. Member for Hertsmere about worklessness and lack of economic activity. We take seriously the focus on small businesses, and the point about being as local as possible, using intelligence and understanding the nuances in regional and sub-regional labour markets. That all relates to the point I made in my opening remarks about geographical and sectoral concentration of jobs and skills. As with the wider fiscal picture, in this area of all areas, within the context of the progress made thus far in periods of relative prosperity, as the hon. Member for North-East Hertfordshire (Mr. Heald) said, we had better make sure that there is a flexibility to the new deal and everything else that the Jobcentre Plus network offers in periods of less than clement weather, if I can use that phrase. That will be the test. I sincerely think, based on what I have known as a constituency MP and as a Minister, that the Jobcentre Plus network is up to that test, as is the wider system, if the points about simplicity, local focus, flexibility and practicality are allowed to permeate the system during a period of economic downturn.

Does the Minister accept that the changed circumstances we are seeing are a bit of a shock to the system? It was not expected that we would necessarily be going into recession at this time. A lot of the plans for job centres are based on the idea that things were going to be ticking along as normal and that it would be possible to cut out waste and so on, and to have a little less capacity. Does he accept that we might need more capacity, not less?

I simply do not accept that characterisation. I repeat that job centres have the flexibility and contingency to meet whatever is coming in the weeks and months to come.

I commend everyone for their contributions and thank the House for the debate.

Question put and agreed to.


That the House has considered the matter of work and skills.