The Economy

Debate between Alison McGovern and Richard Graham

Wednesday 22nd June 2011 Commons Chamber

[Richard Graham (Gloucester) (Con)]

It is a pleasure to follow the hon. Member for Chesterfield (Toby Perkins). He, I and all of us in the House agree that the goal now is to increase growth in the country. The challenges are, first, the revisionist history we have heard today, and secondly the road through which we achieve that growth.

Today’s debate started with the shadow Chancellor talking about the lessons of history and highlighting the need for an economic plan that works. Let me begin with a quick analysis of recent history, because we know that those who do not learn from their errors and from history are destined only to repeat them. The shadow Chancellor was the man who, with his then boss, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), had the clear economic goal of abolishing boom and bust. Thirteen years later and after the worst bust of all time, the right hon. Member for South Shields (David Miliband), as the Chancellor mentioned today, rightly came to the conclusion that it was wrong ever to pretend in a capitalist country that anyone could abolish the economic cycle.

It was a pity that the right hon. Gentleman did not arrive at that conclusion many years earlier, but he has learned an important lesson from recent history. Have the shadow Chancellor and other Labour Members done the same? Have they accepted that the heart of the shadow Chancellor’s last great plan was rotten to the core, was mission impossible, and so ended inevitably in tears? I do not think that Labour Members understand that they and their economic spokesmen will simply not be credible until they accept that key fact.

[Alison McGovern]

If the hon. Gentleman thinks that the previous Government’s economic policy over a decade lacked credibility, why have the current Government accepted, though amended, the golden rule on investment over the economic cycle?

[Richard Graham]

First, the hon. Lady is inaccurate, and secondly no Government Member believes that we can abolish boom and bust.

The details of the shadow Chancellor’s plan were no more successful than his goal. The golden rule on Government spending to which the hon. Lady referred was continually fudged under the previous Government, most spectacularly through the £300 billion of off-balance sheet financing—private finance initiatives—which was almost as bad as anything done by the investment banks. Does the shadow Chancellor accept the accusation by the right hon. Member for South Shields that this was a fundamentally dishonest way of measuring the golden rule? Even the right hon. Member for Kirkcaldy and Cowdenbeath has recognised that the tripartite system of regulating finance did not work. Does the shadow Chancellor accept that too?

These dry details, on things such as PFI and the tripartite system of regulation, do not resonate with our constituents, but their consequences will—the hospitals that have to cut services to patients because of the interest being paid on their PFI financing, and banks not lending enough to individuals and businesses in our constituencies because of bad decision making by themselves, inept regulation and inadequate Government oversight. The consequences of living beyond our means are the essential link between the shadow Chancellor’s policies, and our inheritance and this Government’s efforts to forge a better economic future.

We come to the crucial part of today’s motion: how are we doing, one year on? Opposition Members have piled in like a choir singing the hymn “Abide With Me”—“Gloom and despair in all around I see”. They all seem to have enormous confidence that the economy is failing, that the coalition will not plan, and that the coalition plan would not and could not work anyway, leaving them to talk down our country and their own constituencies. I wonder whether any of them are doing anything to help. Where were they, for example, when I led a debate on apprenticeships and small businesses two weeks ago? Not a single Opposition Member was there. We all need to do our bit to support business growth in our constituencies. We know today that not everything is perfect, but the evidence suggests the following facts. Unemployment is down slightly on a year ago. The savings ratio has improved and business growth—

National Apprenticeship Scheme

Debate between Alison McGovern and Richard Graham

Wednesday 21st July 2010 Westminster Hall

[Richard Graham (Gloucester) (Con)]

I am grateful to Mr Speaker for enabling me to re-secure this debate. I am also grateful to him and many others for their kind reminders about its starting time, which, together with the help of three alarm clocks and several telephone calls from my wife in Gloucester, have ensured that this parliamentary apprentice has already rehearsed his speech in this Chamber this morning. I am sorry that the shadow Minister for apprenticeships, the hon. Member for Cardiff West (Kevin Brennan), is unable to be with us, but if he has any difficulties with a faulty printer, I am available to offer assistance.

It is important to hold this debate on apprenticeships, and I am grateful that the Minister, who knows the subject so well, is here to respond. It is telling that the majority of Members here are Conservatives. One irony of the past 13 years is that the previous Government could have done so much more to promote the importance and perception of apprenticeships. I have not found a single secondary school in my constituency that has made presentations on apprenticeships to its pupils, but they all worked assiduously on the previous Government’s drive to get 50% of students into university—a target that was never achieved and which has thankfully now been dropped. That took place when the previous Government allowed manufacturing to decline at its fastest pace ever and youth unemployment to grow to its highest ever. Those sad facts are not unrelated.

Let us be clear about what is at stake. Without apprentices, our national and local capability to do and make things, and our ability to stem the decline in manufacturing and retain, if not improve, our status as the world’s sixth greatest manufacturer will simply not produce results. Only 10 years ago, Gloucestershire manufactured 24% of its GDP; today, the figure is 16%. That is not because our service sectors have grown, but because manufacturing has shrunk faster than anything else. That is not acceptable. The situation must be turned around, and apprentices are the key, just as they are to reducing the 18%—almost one in five—of our 16 to 24-year-olds who are neither learning nor earning. If ever there was a time to support apprenticeships, not only in the manufacturing and construction sectors, it is now.

It is true that the previous Government did some rebranding and restructuring work on apprenticeships, and put some taxpayers’ money behind that.

[Alison McGovern (Wirral South) (Lab)]

The hon. Gentleman makes some interesting points about the previous Government’s work, but is he aware that in the borough of Wirral between 1997 and 2008, the number of apprenticeships rose from 90 to 2,000? His characterisation of the past decade as one of no growth is, certainly in my area, a mischaracterisation.

[Richard Graham]

I thank the hon. Lady for her intervention. I recognise what she says. If she waits a second, I will cover that specific point.

The previous Government put some taxpayers’ money behind their restructuring and promised to create 500,000 apprenticeships. I appreciate that, but it is also true that they missed that target, like so many others, by a very wide margin—about 50%. The restructuring broadly fitted the epitaph for his party given by the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), who said that a day without a new initiative was a day wasted for new Labour. The idea of the restructuring was more important than the outcome. I will touch on that later.

I have a suspicion that the shadow Minister here today, the hon. Member for Wrexham (Ian Lucas), might try to distract us by referring to the decision by the Department for Work and Pensions not to extend the future jobs fund and to redeploy the cash as part of the Work programme. However, we are not talking about future jobs; in Gloucester, we are talking about placements in the public sector or quangos, which have kept people out of the unemployment statistics for six months and provided some useful skills, but which have not led to job offers. That is different from an employment contract for a serious three-year apprenticeship, which is what business wants.

It therefore falls to the coalition Government to recognise and restore the vital role of apprenticeships for future business growth in many sectors, increase the number of apprenticeships so that our record youth unemployment can be reduced and implement an expanded Government programme of apprenticeships in a much leaner, more flexible and user-friendly way.

--- Later in debate ---

[Richard Graham]

My hon. Friend began by asking whether I could do something about the problem of girls; on the whole, I would encourage them. He makes a valid point, as always, and I am also grateful to my hon. Friend the Member for Wirral West (Esther McVey) for pointing out the need for more apprenticeships in her constituency. I hope that many will benefit from the expansion of apprenticeships that the Minister has announced, which I shall encourage him to continue with in due course.

If Alan Sugar did much to bring the word “apprentice” to our TV screens, ours must be the Government who bring apprentices into many more large, medium and even small companies. There are different programmes of help for the young, emerging from three different Departments under the coalition Government: the Work programme from the Department for Work and Pensions, the national citizen scheme from the Cabinet Office, and apprenticeships through the Department for Business, Innovation and Skills. Those will require some cross-departmental co-ordination, perhaps through the new Cabinet Committee on social justice. The Minister may want to offer his thoughts on that co-ordination later, but today I shall focus on apprenticeships.

[Alison McGovern]

Business confidence is crucial for expanding apprenticeships and we are in a difficult and uncertain time, especially given the alterations to business support through the regional development agencies. What would the hon. Gentleman suggest to the Government to keep business confidence high in a period of uncertainty, and how could the Government fill the gap in work on skills at a regional level, as we move—perhaps—towards local economic partnerships, maybe in two years’ time?

[Richard Graham]

The hon. Lady asks what I would do to boost business confidence. My feeling, as a former businessman, is that business confidence depends above all on a stable macro-economic situation. That is precisely what the coalition Government are pledged to restore, and I believe that they made significant steps forward with that in the emergency Budget a few weeks ago. Business confidence depends on that, and I believe that it is growing. That is reflected in several indicators, not least falling unemployment, at the moment.