The Minister of State, Department for Work and Pensions (Chris Grayling)
I pay tribute to the hon. Member for Jarrow (Mr Hepburn) for his success in securing the debate and for the eloquent way in which he has referred to what was undoubtedly an important moment in the history of this country. Looking back over the course of the past 150 to 200 years, there have been different groups of individuals and different moments at which the social history of this country has been changed—events such as the actions of the Tolpuddle martyrs and the rise of the Chartist movement. I would classify the Jarrow marchers as being very much part of that tradition. They undoubtedly had an impact on the way that this country thinks. It may not have been an immediate impact, but it has been lasting. It put the hon. Gentleman’s town on the map internationally as a place from which people rightly draw inspiration. I pay tribute to him and to the people of Jarrow on the occasion of the 75th anniversary of the march.
Of course, the hon. Gentleman is right to say that we live in a different world today. Although we live in tough times, the stark, bleak environment in which many of those people lived is not the world in which people live today. We have a welfare state that we all agree is an essential part of providing a safety net for those who fall on tough times, including those who lose their jobs. I absolutely agree with him that it is a tough thing, in any circumstances, to lose one’s job. Unemployment is a difficult process for any individual to go through.
Grahame M. Morris (Easington) (Lab)
Does the Minister agree that, as in the 1930s, we need a realistic plan for jobs and growth?
Chris Grayling
We face a different challenge from that of the 1930s, but I accept that we need a plan for jobs and growth. If the hon. Gentleman will give me a moment to continue my remarks, I will go on to talk about what we are doing about jobs and growth.
I very much accept the principle that unemployment represents a real challenge and difficulty for individuals. It is, and rightly should be, at the top of the agenda of any Government at any time, but particularly at a time such as this when we are feeling the chill winds of a very difficult international economic situation and dealing with some of the biggest financial challenges seen in the peacetime history of this country. At the same time, we must not and will not forget the real human impact of unemployment, and we will do everything we can to tackle it.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I, too, commend my hon. Friend the Member for Jarrow (Mr Hepburn) for securing this debate. The Minister says that these times are different from the 1930s. Does he agree that the impact of the current recession is particularly hard felt in the north-east, where youth unemployment has increased by 18% in the past year? Does he have some hope to offer, particularly for the north-east?
Chris Grayling
Absolutely I do. If the hon. Lady listens to the interviews I give at the time of the monthly unemployment figures, she will know that I always look to the north-east first. It represents the biggest employment challenge in the UK, and it is, should be and will be a priority for this Government. I welcome today’s announcements by my right hon. Friend the Deputy Prime Minister about investment in manufacturing and research and development in the north-east through the regional growth fund. Ironically, given the comments of the hon. Member for Jarrow about what took place back in the 1930s at the time of the march, the disappearance of such a large section of the private sector in the town of Jarrow makes it of paramount importance to us that we work in every way we possibly can to rebuild, re-energise and re-dynamise the manufacturing sector in the north-east. It is from that part of our economy that the future prosperity of the north-east will come.
Ian Swales (Redcar) (LD)
I congratulate the hon. Member for Jarrow (Mr Hepburn) on this fascinating debate and on his superb speech. Will the Minister join me in welcoming the fact that the regional growth fund that he mentioned allocated the largest proportion of its funds to the north-east region?
Chris Grayling
I do indeed. That is an indicator of the priority that this Government place on the north-east. It is a part of the country that, as we all accept, faces real challenges, and we want to do everything we can to help. Moving slightly down the country geographically, I was particularly gratified when the steel plant in Redcar was rescued and put back on the straight and narrow. I am delighted that steelworkers in Redcar are moving back into employment. That is the kind of change that I want to see in the north-east—a resurgence of the manufacturing sector.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I thank my hon. Friend the Member for Jarrow (Mr Hepburn) for securing this debate. Ellen Wilkinson, who was involved in the march and who was the MP for Middlesbrough East before being the MP for Jarrow, remarked at the time that the private sector investment that brought Jarrow back to its full manufacturing glory happened because there was public-led investment first.
Chris Grayling
I hope that today’s announcements of public funding to provide grant support to manufacturing, research and development, and infrastructure investment not only in the north-east, but in other parts of the country, will play their part in achieving the goal that we all share of growth in the private sector and unemployment coming down in the north-east.
Phil Wilson (Sedgefield) (Lab)
I commend my hon. Friend the Member for Jarrow (Mr Hepburn) for securing this debate. Is it not true that the regional growth fund is only a third of what it used to be under the regional development agencies?
Chris Grayling
I am not sure what the hon. Gentleman means by it being a third of what it used to be, because this is a new initiative. We are targeting money specifically at investment in manufacturing and research and development. I must say that some of the examples from the regional development agencies were pretty poor. I have seen examples from the north-west of misjudged investments and strategies. I believe that targeting grant support specifically on projects that will create jobs in the short term in the north-east and elsewhere is the right thing to do.
Chris Grayling
I will give way one more time and then I must make some progress.
Grahame M. Morris
I must congratulate my hon. Friend the Member for Jarrow (Mr Hepburn) on securing this important debate. There are important parallels with what is happening today. Is it not a travesty that we do not, in effect, have a regional policy? The abolition of RDAs has taken us back not to the 1980s, but to the 1960s. The regional growth fund is a complete misnomer because any part of the United Kingdom, even wealthy areas in the south and south-east, can bid for its support. We do not have regional policy now, so we are left to the vagaries of God and good nature.
Chris Grayling
I disagree with the hon. Gentleman, because I think that the creation of the local enterprise partnerships gives a much better and more localised focus to economic developments. It avoids the situation whereby, for example, a regional development agency in the north-west is trying to form a judgment on whether it should focus on the two great cities of Liverpool and Manchester, rather than having the decisions about those cities taken in Greater Manchester and on Merseyside. A localised focus for regional development is the right approach.
Ian Lucas (Wrexham) (Lab)
First, I congratulate my hon. Friend the Member for Jarrow (Mr Hepburn) on securing this debate. Secondly, I would like to bring the Minister back to the north-east. The north-east had an excellent regional development agency. When I was privileged to serve as a business Minister in the last Labour Government, I saw examples of One North East’s work with Nissan and Hitachi, which secured massive investment in the north-east. The regional growth fund has taken responsibility away from the north-east and given it to a centralised system run from the south-east. That is entirely inappropriate.
Chris Grayling
Having looked at the list of investments that are being made today, I cannot agree with the hon. Gentleman. It is a matter of great pleasure to hon. Members such as me and my hon. Friend the Member for Redcar (Ian Swales) to see the north-east receiving such a large proportion of the fund. That is right and proper, because what I want to see above all else is jobs being created and unemployment coming down in the north-east. That is a goal that we all share.
Chris Grayling
I will just make a bit of progress and then I will give way.
The hon. Member for Easington (Grahame M. Morris) asked me about the economic strategy and he made a fair point. In my view, we have to focus on jobs, growth and high-quality back-to-work support for the unemployed. I appreciate that this is a point of difference between us, but it is my view that a central part of rebuilding economic prosperity in this country is dealing with the deficit that Labour Members left behind. The reason why I say that is straightforward: if we were not dealing with the deficit and if we were not seen to be bringing our public finances under control—
Chris Grayling
Let me finish. If we were not doing those things, we would be facing the economic uncertainties that we see right now in other European countries. Does anybody seriously believe that if we were in that economic position, we would be seeing private sector organisations willing to invest and create jobs? Private sector jobs have been created in this country over the past 12 months. Had we not set about dealing with the deficit, unemployment today would be higher, not lower.
Mr Hepburn
It is fascinating that when the Prime Minister is in the Chamber and has the Tories sitting behind him, all he has to do is talk about how Labour left them the debt and they all howl, but when he goes away and talks to audiences who are more distinguished or more educated in finance, such as the IMF and Europe, he starts talking about the world crisis. The fact is that after the second world war, we had a bigger proportion of debt than we have now, yet we built the welfare state and a full employment economy. We did not have the whinges from the Tories that we have now, which are merely excuses for their policies.
Chris Grayling
Obviously, the hon. Gentleman and I are not going to agree on that point, but he simply has to look around at the rest of Europe to see the consequences of over-borrowing, unsustainable debt and large budget deficits. This Government have set about the task of dealing with that problem, which is the path to economic stability.
Alongside that, we of course need measures that are designed to support the growth of business. That is why we have cut corporation tax and why we are providing additional incentives through corporation tax for investment in intellectual property. It is also why we have modernised and reintroduced the enterprise zone model in a number of places in the north-east, which is a further positive step for the area. We are seeking to deregulate in areas such as health and safety and employment law not because we want the wrong thing for employees in this country, but because the evidence is that a more flexible labour market is a better way of creating an environment in which jobs are created.
Grahame M. Morris
The message from Government Members is that this economic crisis is built on debt, but the point of view of some of us is that the debt crisis results from a financial crash that was not made here in Britain. However, whether the economic crisis is because of famine, war, debt, corruption or ineptitude, surely we require some kind of growth strategy. Your argument that we cannot possibly get out of the debt crisis by incurring more debt simply does not hold water. Whatever the cause, we must get growths and jobs, especially in my area.
Mr Speaker
Order. I am grateful to the hon. Gentleman, but I would just point out that I am not offering any argument at all.
Chris Grayling
I am afraid that the hon. Gentleman has to understand that it is unsustainable for a country to borrow £1 in every £4 that it spends, which was the situation when the previous Government left office. If you did that with your household income, Mr Speaker, you would rapidly discover that you were in severe financial difficulties. Britain is no different. We must get our financial position under control, or we will see unemployment rise higher than it would otherwise.
Alongside the need to pursue a strategy of getting the finances in order and of targeting support at enterprise through enterprise zones, tax reductions and the changes that we have set out today, we must provide much better support for the long-term unemployed to get them back into the workplace. The introduction of the Work programme, which across this country today provides specialised back-to-work support for the long-term unemployed—[Interruption.] From a sedentary position, the hon. Member for Wrexham (Ian Lucas) calls out, “No jobs.” The truth is that each week, even in difficult economic times, Jobcentre Plus is taking in around 90,000 vacancies. They are estimated typically to be only around half the total number of vacancies in the economy. Therefore, over the next 12 months, in Britain as a whole, the best part of 10 million people will move into new jobs. My goal, and the goal of the Work programme, is to ensure that as many of those jobs as possible go to the long-term unemployed. I do not want those people left on the sidelines, and I do not want them struggling for years on benefits, unable to get back into work.
The hon. Member for Jarrow mentioned the work capability assessment, which was introduced by the Labour Government. We have improved that with a view to ensuring that it is a more reflective process, and that we take into account the very real needs of the most severely disabled. Crucially, our improvements are also about helping people with disabilities to get back into the workplace. That is an essential part of turning their lives around and an essential part of a smart social policy for this country, which is essential.
My message to the hon. Gentleman is this: we understand the challenge that unemployment represents. His town has made a great contribution to raising the importance of unemployment for Governments of all persuasions over the past 75 years. He should take credit for the work that his town did then and has done since. We will do everything we can to ensure that, in 2011, we have a smart strategy to deal with unemployment, to help people not just in Jarrow, but right across the country.
Question put and agreed to.