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Long-term Unemployment

Volume 497: debated on Monday 19 October 2009

Long-term unemployment is lower than in 1997, much lower than it was during the recession of the 1990s, and much lower still than in the recession of the 1980s. Despite increases in unemployment, the numbers on key out-of-work benefits have fallen by about 450,000 since 1997. However, we are not complacent. The tailored support offered by the flexible new deal is the right strategic response to the challenge of long-term unemployment. The future jobs fund and the young person’s guarantee are the right measures for long-term youth unemployment.

I thank the Minister for that response. It is crucial that we ensure that the long-term unemployed have the right support, assistance and training to be able to access the jobs market again. Given that the practice in previous downturns was to encourage people into inactive benefits, what assurances can my right hon. Friend give the House that the number of people on such benefits does not increase in this downturn?

I thank my hon. Friend for the opportunity to remind the House that when the Opposition were in power they shifted people from unemployment on to incapacity benefit, whereas in just the last year, if we exclude students, inactivity as a proportion of the working-age population is down 0.2 of a percentage point over the past year at 15.3 per cent., which is testament to the efforts of the staff working in Jobcentre Plus, who do the work capability assessments, move people off incapacity benefit on to jobseeker’s allowance and then, crucially, into work.

That was a very helpful question from the hon. Member for Denton and Reddish (Andrew Gwynne). There are 2.5 million people on incapacity benefit. Under the Government’s invest to save proposals, for almost the whole of the next Parliament, if they were returned to office, only about 10 per cent. of those people could expect any help. Why do the Government not follow our approach, rip up the Treasury rules and start to help all those people from day one?

As the hon. Gentleman knows, both his party and my party are going in the same direction of travel, but he wants to go at a rate that there is simply not the capacity in the system to be able to deliver. He would have to hire 1,500 doctors from somewhere. I do not know where he is going to get them from—perhaps his cuts in the NHS will be so severe that they will be made redundant by the Health Secretary.

During the 1940s, 1950s and 1960s, Britain maintained a policy of long-term full employment, not unemployment, following the prescriptions of the great John Maynard Keynes. May I suggest to my right hon. Friend that we return to those prescriptions, fully embrace the wisdom of Keynes and abandon neo-liberalism once and for all?

My hon. Friend, who is a wise student of these things, will have noticed that the slightly unorthodox approach that my right hon. Friend the Prime Minister co-ordinated at the G20 London summit was much more Keynesian in character. As a result, as I said earlier, the ILO has assessed that the effect on unemployment across the G20 is a reduction of between 7 million and 11 million—with 0.5 million here in the UK—thanks to the policies adopted by the Prime Minister.