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Unemployment

I totally accept my hon. Friend's point, which is the main point that I intended to make. Before doing so, I want to comment on what the hon. Member for Nottingham, South (Alan Simpson) said. It is important that we use the recession in a purposeful way to ensure that when we come out of it we have made improvements to the skills of our work force and created businesses in the green sphere so that green jobs are coming through. We should not just assume that in three years' time, or whenever the recession is finally over, the world will be the same as it is now. I agree with the hon. Gentleman that we could do far more in the green sphere. In Germany, 250,000 photovoltaic plates are being put in each year for solar energy; last year in Britain, there were only 356. There are a whole range of other green opportunities that we should take, and with which the Government should do more. The grave threat in this recession is that we will see a massive rise in long-term unemployment. The reason why that is likely is that, looking at the overall jobs market, unemployment has risen very fast in the past year. The headline figure is 1.97 million, and it is up by 438,000 year on year. At the same time, vacancies have fallen by an alarming number. Monthly vacancies are down by 200,000 compared with 2007. Of the half a million or so vacancies, more than half are in sectors where jobs are hard to fill or there are skills shortages, so the actual number of jobs available for people to apply for is tiny relative to the numbers looking. I mentioned Woolworths earlier. We have lost stores in my constituency. A constituent from Letchworth wrote to me saying, "Where's all the extra help that we believed had been promised? We need it." She said that 22 people were looking for each job in the retail sector potentially available to someone from Woolies. The position as regards vacancies is particularly worrying. The chief economist of the Social Market Foundation gave evidence to the Select Committee about how he saw the way forward given the research that he and his colleagues have been doing. They believe, based on current economic projections, that the number of long-term unemployed—people who have been out of work for more than 12 months—is likely to increase by 300 to 400 per cent. over the next three years. Let us look at what that means. There are roughly 150,000 long-term unemployed at the moment, so to go up to 600,000 would be a huge increase. Every one of those represents a tale of somebody who is reaching despair by the time they have been out of work for a year. The flexible new deal is being introduced to help people who have been out of work for a year. The original estimates of how many clients there would be were much lower than they are now. The Government have written to the Select Committee saying that they expect the figure to be 300 per cent. higher than they originally thought. That fits in with the projection of the Social Market Foundation; it is not that far off. If there is a fourfold increase in long-term unemployment, that brings back the spectre of the horrific problems that long-term unemployment has caused in the past. It is not enough for the Government to say that they are talking to the contractors involved with the flexible new deal. The process is just not viable without proper resources, which need to be adequate for a large number of extra people. I am a fan of the flexible new deal. I was one of those, along with my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), who criticised the early new deal because it was not flexible, and in my pamphlet, "Auditing The New Deal: What Figures For The Future?" in 2004, I proposed a flexible, personalised new deal using private contractors to help, and I cited the examples in America that my hon. Friend mentioned. It was well received—and I should mention my co-author, Mark Waldron, because he did a lot of the work. It set out the way forward to which the Government eventually came round, and I am pleased that the flexible new deal will go ahead. But let us not kid ourselves that we are now looking at the same proposition as introducing a flexible new deal that was intended for 150,000. It will end up having to cope, working in a detailed way, with 600,000 people. It will need a lot more resources, and it will have to be properly organised. My concern is that we are not organised adequately as a country to cope with the scale of the challenge of long-term unemployment. It is all very well to take shots at what happened in the 1980s, but the youth opportunities programme, which started in 1978, was a Labour scheme. It was already in trouble by the time the Conservatives won office in 1979, and was heavily criticised because it did not do enough for each young person. It continued to be criticised after the Government of Margaret Thatcher came in. The same is true of a range of schemes over the years; there is often criticism of them. The lesson is that the quality of such schemes is hard to maintain if they involve a large number of people, and the Government must consider that issue. If there is to be a large number of extra unemployed, we will need much greater provision in the job centres and in the flexible new deal. There is no way round that, and the Government need to come up with solid proposals to deal with it. We should use the recession to train the people of this country so that they have the skills they need. Some 5 million people in this country are functionally illiterate—unable, for example, to write to a bank and explain that they have changed address. It is a shattering thing that every year 40,000 young people leave our schools in that condition. We have a big problem, and it is sad that a lot of those young people are quite capable of learning to read and write. I remember a visit to Rainer in Sheffield, where I met a young man who had a few problems, and who wanted to be a dry liner. He had to learn to read to get his health and safety certificate. He learned to read very quickly—it took him about two months—but he had spent 11 years in our education system without managing to read and write properly. That is a staggering indictment. We should not be dealing with such problems when people are 19, but when they are seven, or six. It is important that we get literacy and numeracy right in this country. My other point about training concerns apprenticeships. The Government have made great claims about increasing the number of apprenticeships. We have never quite got the promised increase—I believe that the Prime Minister promised 320,000 places and we got 239,000—but apprenticeships are vital if we are to improve skills. I am worried about their quality, however. Traditionally, the academic standards underpinning an apprenticeship have been at level 3; it has basically been an A-level, but in a technical area. Now, most of the apprenticeships coming through are rebadged Government training schemes at a lower level. They are at level 2, and are not at A-level standard in technical subjects. The question is whether they will give people an advantage in employment. All the evidence is that the traditional level 3 apprenticeships give a great advantage, but there are fewer of those now. The level 2 apprenticeships are being used to top up the numbers. I make a plea to the Government to use this recession not just to paper over the cracks with poor-quality schemes but to get the training right for a change. We must ensure that when we come out of the recession, far more of our people can read, write and add up properly, and that young people who have been on apprenticeships genuinely have the skills that they need to do jobs in the future.