Budget Resolutions and Economic Situation

Debate between Alison McGovern and Andrew Gwynne

Wednesday 20th March 2013 Commons Chamber

[Alison McGovern]

Of course I have. I thank my hon. Friend for flagging up the issue of the changes made to tax credits, which mean that people now have to work for 24 hours, rather than 16 hours. That alteration has added insult to injury and disintegrated work incentives.

All Ministers need to do is look at their own labour force survey, which shows that between 2008 and 2012 under-employment went up from just over 2 million to just over 3 million. Do Ministers read the labour force survey? They should do so if not. Spare capacity in our economy is causing real problems. Not only does it hold back our economic development, but it causes real unhappiness.

Hon. Members may remember the Prime Minister talking about a general well-being index when he came into office, but I dread to think what its results would be given people’s misery at not being able to get all the hours they want at work in order to put food on the table for their family.

On the subject of unhappiness, I must mention youth unemployment. Just under 500,000 young people are claiming the dole. Treasury Ministers need to speak to people at the Department for Work and Pensions and find out what on earth is going on. They cancelled the successful future jobs fund in favour of the failed Work programme; the Government’s claims about apprenticeships are, as has been said, simply a rebadging exercise; and the DWP itself knows that its policies are failing. I have asked questions about the Department’s business planning projections, which show that the number of people under 24 to whom it will have to pay the dole before the end of this Parliament is going to increase. That is a disaster for our country. We need a better policy to help young people get into the labour market.

In the time remaining, I want to say what I think that policy should be. We have hammered local authorities despite the fact that it is basic economics to understand that unemployment forms in clusters. Specific localities face significant unemployment, especially among young people, who want a place in the labour market.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Is my hon. Friend as concerned as I am that the areas that will be hardest hit by local government cuts are those that tend to have the highest levels of unemployment?

[Alison McGovern]

That is precisely my concern. In fact, there is a correlation between the level of unemployment in a particular local authority area and the extreme nature of the cut it faces—the more people out of work, the bigger the cut. That makes no sense at all when we all know that some of the most successful back-to-work programmes have been led not by central Government, but by local authorities, which understand much better than Whitehall the barriers that people face in getting into work.

I cannot emphasise enough how the hammering of local authorities has impeded our ability to get young people into work. That is especially true of Merseyside. The biggest barrier to the economic development of Merseyside and the Liverpool city region is the skill level. We need a positive, proactive, local approach to improve people’s skills and help them get back to work. We heard nothing from the Chancellor about that problem in his Budget.

If the Chancellor were here, I would ask him whether he realises the damage that he is doing. I hope that the Exchequer Secretary will pass on that question. Constituent after constituent comes to my surgery despondent about their chances of getting a decent job. They want desperately to work more hours, but are not able to get them. I ask Ministers to come with me to Jobcentre Plus in Bromborough and meet the people there who are depressed and despondent. I ask Ministers to think about whether they could have done better today. They are already adopting some of Labour’s five-point plan. Could they not adopt some of our other policies too? I think that they could have done better today. My constituents deserve a lot better.

Local Government Financing

Debate between Alison McGovern and Andrew Gwynne

Tuesday 29th June 2010 Commons Chamber

[Alison McGovern]

I am glad that the hon. Gentleman asked me that, because there has been a misapprehension that Labour had no plans when we were in government, and that we did not set any of them out. That is all very convenient, but the proposals were in our March Budget. There was a great deal of discussion about efficiencies, about what we would have done with the future jobs fund and the working neighbourhoods fund, and about how we would have looked at those funding programmes. All the detail is in our March Budget. My problem with the proposals in last week’s Budget is not that we have to make cuts or that we have to reduce the deficit; it is the timing.

I want to talk about place shaping, and about the things that make Wirral a great place to live. I have spoken before about the importance of sport, the arts and culture to who we are in Wirral. The cutting of the free swimming programme will not help the Oval sports centre in my constituency to be successful. The cutting of free school meals will not help Grove Street primary school to carry on its great work on increasing food sustainability and nutrition. Getting rid of the libraries modernisation fund will certainly not help Wirral to bring our libraries up to the standard that my constituents expect.

The cuts could, of course, help to reduce the deficit—I do not disagree with that at all—and there are certain efficiencies that we might need to look at. My argument is that we are talking about marginal amounts. Cutting the libraries modernisation fund will not have a massive impact on reducing the deficit. The thing that will reduce the deficit is getting people back into employment. If we cut the deficit at the expense of all the things that people have come to rely on, we shall see a hollowing-out of town centres, and the retreat of the Government from supporting people in the things that they want to do in their lives. I do not think that that would be worth while. The impact of the cuts on employment and on the things in our communities that we hold dear will be very grave in Wirral.

It is worth mentioning the differential impact of the cuts. Wirral will be hit a lot harder than those in nearby Cheshire, or in Oxfordshire, who will not feel the same impact at all. For the past 13 years, the Labour Government made great strides towards resetting the economy. People no longer had to leave Merseyside to get a job. We have done great work on that, and it needed to continue. I fear that this withdrawal of the state from our area will result in our sliding back into the problems we had before. The Government’s proposals represent a withdrawal of activist government.

The Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), has spoken about removing layers of government, as though it were possible simply to cut away pieces of the work being done by regional development agencies or local authorities, and to hand the money over to someone else, in the expectation that the work would still be done. My experience of local authorities might be limited, but I believe that to be unrealistic. The regeneration practices that local authorities have developed should be prized and used, and their proactive work with RDAs should not be overturned overnight in order to remove a layer of government. That is phraseology for the sake of it, and I do not think that it will help our country to develop economically.

[Andrew Gwynne]

My hon. Friend is making an excellent case for regional development agencies. One of the important roles of the RDAs was to put in place regional programmes of investment for major transport schemes. Does she think a region such as the north-west would be able to put together a major programme of transport improvements if it were left to the individual local authorities from Cumbria down to Crewe?

[Alison McGovern]

It would not be able to do it. Travel-to-work distances are a problem in Wirral—compared with, say, south-east England—and we simply do not have adequate connectivity to centres of employment such as Manchester, Warrington and the north Wales coast. The RDA was doing fantastic work in addressing that connectivity problem, working hand in hand with local authorities. I do not think that the Government fully understand those practices.

Certain ideologies in the Government are driving the cuts. The first is that less government is better. Conservative and Liberal Democrat Members might say that, but I believe—please forgive the truism—that better government is better. This is not the time for the state to withdraw entirely. Secondly, the Government believe that pure deficit reduction is all that matters, and that reducing the deficit will itself drive growth if we demonstrate to the City and the markets that we are being tough. I do not think that there is any evidence for that. I am a great believer in evidence-based policy making, and I would like to see some evidence for that.