Unemployment in Scotland

Anas Sarwar Excerpts

Wednesday 5th December 2012 Westminster Hall

[Gemma Doyle]

I think that the hon. Gentleman will find that we are discussing unemployment in Scotland. I am setting out very clearly what the Scottish Government whom he supports are failing to do. We need to get the economy back on track. There is no black-and-white answer, but the Scottish Government are failing desperately the people of Scotland. If more of the hon. Gentleman’s colleagues were interested, perhaps they would have turned up this morning.

The hon. Gentleman does not have to listen just to me. The Scottish Chambers of Commerce is also very concerned and has called on the Scottish Government to use the levers at their disposal to stimulate business growth, because they clearly are not doing so at the moment.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing the debate. She is making a very positive and passionate case. On the point made by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) about the unemployment statistics in Scotland, my hon. Friend is right to say that unemployment has fallen across the UK but risen by 7,000 in the last quarter in Scotland. One reason for that is the number of people who are leaving school and not going into employment or to university or college as a direct result of the thousands of college places cut by the SNP Government.

[Gemma Doyle]

My hon. Friend is spot-on. I have met 17-year-olds in my constituency who were due to start a college course and thought that they had their future mapped out, but whose course was cut at a day’s notice because of cuts to Clydebank college. My hon. Friend is absolutely right.

My constituents have been particularly badly let down by the Scottish Government. Despite having one of the most challenging job markets in the whole UK, the Scottish Government have chosen to ignore us. In the initial plans to set up enterprise zones in Scotland, West Dunbartonshire did not even merit inclusion in the initial considerations. After snubbing our area, the Finance Secretary refused to meet me and local representatives to discuss his decision. In March this year, when West Dunbartonshire had the highest youth unemployment in Scotland, we were excluded from any support from the Scottish Government’s youth unemployment strategy fund.

There is no logic, no help, no jobs—only politics. The Scottish Government talk only of the limitations of the current constitutional settlement. Let us imagine the position if there were another devolved nation in the UK, one that could lead the way and would grab and use every power that it had to help its young people and wring every drop of help out of the levers of power that it had. It just so happens that, in Wales, Labour’s Welsh Government are doing exactly that through Jobs Growth Wales. That scheme is providing jobs—not work experience or training—for unemployed 16 to 24-year-olds, paying them the national minimum wage for a minimum of 25 hours a week and getting 4,000 young people a year back to work. I am told that most of those jobs are in the private sector. The scheme requires the positions to be new, not replacements—helping Welsh businesses to grow even in this tough economic climate.

If that is good enough for young people in Wales, it should be good enough for young people in Scotland. However, the Scottish Government have one priority, which they are pursuing relentlessly. I wish that it were job creation, and I hope that they will look very carefully at the Welsh scheme. At the moment, however, they are pushing everything else aside to pursue separation, in the hope that the people of Scotland will take a risk and cross their fingers that the grass will be greener on the other side.

Only last week, someone from Scottish civic society told me that their fear is that the Scottish Government are standing back deliberately, letting things get worse and worse, all to boost the fading chances that people will back their flawed plans for separation come 2014. At the heart of the SNP is a mistruth, the often repeated mantra that separating from the rest of the UK will mean that all of Scotland’s problems will be solved.

I want to roll back the years slightly to 1968, when Mick McGahey, the National Union of Mineworkers Scotland Area president, argued at the Scottish Trades Union Congress for a Scottish Parliament but against separation. He said that his members had more in common with the London dockers, the Durham miners and the Sheffield engineers than they had ever had with the “barons and landlord traitors”, as he called them, of Scotland. That is still true today, because someone unemployed in West Dunbartonshire has more in common with someone unemployed in the west midlands than with the speculators who caused the economic collapse, even the Scottish ones.

The workers movement has always been an international one. Constitutional wrangling will do nothing for the 218,000 Scots who want a job. In fact, it may harm business confidence. Last month, Rupert Soames, chief executive officer of Aggreko, which is one of Scotland’s six FTSE 100 companies, the largest temporary power generator company in the world and based in Dumbarton, said that the disadvantages of separation were

“large, serious and…likely to arise”

and would create

“a great deal of business disruption”.

Most worryingly, he said that business leaders were unwilling to speak out because

“over the past couple of years, anyone who has dared open their mouths on the subject with views that are contrary to those of the SNP have brought down on themselves rains of bile and ire, which is really very unpleasant.”

He said that a lot of the language was very intimidatory. What a damning indictment of Scotland’s Government. I am sure that the bile and ire will be raining down on me on Twitter later. In fact, I saw the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) on his phone, so perhaps he has already been at it. We need the voice of business in this debate. We need them to be the job and wealth creators. We need a frank discussion, for the 218,000 families dealing with unemployment and for every person in Scotland.

I am told that during a recent conference, the Deputy First Minister, who walked away from Scotland’s health service to lead the nationalists’ referendum strategy, was asked about plans for welfare provision in a separate Scotland. He reportedly said that it would take four or five years to work out the details. Scots do not button up the back; we are not going to vote for a blank sheet of paper. No answers on welfare, no attempt to drive down unemployment and no real dialogue with business—only an obsession with separation. We should not be in a situation where almost a quarter of a million people are out of work without any proper provision to help them back into jobs. It just is not good enough.

I want us to debate employment, not unemployment, and celebrate our world-leading sectors of energy, food and drink—particularly whisky—tourism, life sciences, electronics, defence and aerospace, and manufacturing. Right now, Scots are caught in a toxic storm of the Tory-led Government’s cuts and the Scottish Government’s refusal to help. It is time for them both to step up to the plate, put aside their obsessions and ideologies, and help the people of Scotland back into work.

--- Later in debate ---

[Gordon Banks (Ochil and South Perthshire) (Lab)]

I welcome you to the Chair, Ms Dorries. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing the debate and on tackling head-on the vital issue of unemployment in Scotland.

We have heard throughout the debate that the people of Scotland are being failed by two Governments, in Westminster and in Holyrood. The coalition can barely keep itself together, never mind effectively govern the country, and the SNP is entirely consumed by the independence referendum, which means that it is not tackling the real problems Scots face in their everyday lives. With 218,000 Scots unemployed, few issues are more important for both Governments to tackle, or indeed more important for the people of Scotland, but our priority does not, sadly, appear to be the priority of either Government.

The coalition’s ill-fated Work programme, which we have heard about this morning, has got only four out of every 100 Scots back to work. That figure is really startling and lays bare the Government’s complete failure to get to grips with the unemployment crisis. It is also alarming that the Scottish unemployment rate is 8.1%, which is higher than the 7.8% UK average. As a result of the bleak economic outlook, underemployment has also been on the increase. This Government simply cannot get Britain working, and as a result they cannot get its economy growing again.

Youth unemployment is a particular concern. It is another statistic that is higher in Scotland than in the UK as a whole, at 23.5% compared with 21.7%, with nearly half of all unemployed Scots being aged 16 to 24—a tragic proportion, of which the Minister should be ashamed. If action is not taken soon to tackle that, those young people will become, as one of my hon. Friends has said, Cameron’s lost generation, and Scotland will be less able to take full advantage of opportunities that come our way in the future, which would be a total and utter disgrace.

Long-term unemployment also contributes to an ever-increasing welfare spend. Some 38,395 people in Scotland have been claiming jobseeker’s allowance for longer than six months, which is in contrast to fewer than 8,000 in 2008. Even more worryingly, the number of Scots claiming JSA for at least 12 months has grown by 198% since 2008.

Something has gone seriously wrong with the Government’s unemployment strategy, and they plainly have no ideas about how to bring jobs and growth to Scotland. The failure of the Work programme has contributed to an increase in welfare spend of about £20 billion more than expected. The priorities are all wrong, as can be seen in the Chancellor casting 100,000 16 to 24-year-old Scots on to the dole, while giving a tax cut to millionaires.

To try to tackle that £20 billion overspend in the welfare budget, significant changes will come into force shortly, and they will have a devastating impact on Scotland. It has been calculated that, due to the welfare changes, £114.8 million will be removed from the Scottish economy in Glasgow alone, and £6 million will be removed from the economy of Clackmannanshire, which is Scotland’s smallest county and is in my constituency. I have no doubt that that cash grab will affect local economies, and it will, according to the Fraser of Allander Institute, lead to a further 2,000 or so job losses and—guess what?—an even greater demand for welfare.

To kick-start the economy and create jobs, the Government should, as has been said, take on board Labour’s proposal to put revenues from the 4G spectrum auction to good use. Scottish Labour at Holyrood would use any Barnett consequentials from the growth spending on key investment priorities, such as house building, which I feel extremely strongly about. With nearly 40 years’ experience in the construction industry, I am dismayed to see the stagnation from which the industry is suffering, but that is no surprise when the Government are cutting capital investment by 21% by 2014.

The Government seem to be failing to grasp that with every £1 invested in construction the economy benefits by £3—those numbers have been confirmed by independent economic research. The promise of a threefold return should be incentive enough for the Government to invest in the industry. There are few better ways to kick-start economic growth than with a national house-building scheme and support for construction. There are few better ways to deliver skills in great numbers than through investment in the construction industry, and there are few better ways to impact positively on our high streets than through investment in housing and construction.

I want to pick up on some of the points that have been made this morning. That there are no Scotland Office Ministers on key Cabinet Committees that focus on growth, such as the Growth Implementation Committee, is indeed a great worry for Scotland and, I imagine, a great embarrassment to the current residents of the Scotland Office. I share the opinion expressed by my hon. Friends that the scrapping of the future jobs fund, which has been recognised by the Centre for Economic and Social Inclusion for its achievements, was a mistake, and there is a stark contrast between that recognition and the failure of the current programmes.

My hon. Friend the Member for West Dunbartonshire talked about how the Scottish National party has cut more than 30,000 public sector jobs, but I want to take this opportunity to make the Chamber aware of remarks made by Keith Brown, the Transport Minister in the Scottish Parliament, who, when pressed recently in a debate with me on what would happen to UK civil service jobs in an independent Scotland, said:

“I was waiting for the day when someone from Labour came forward with a positive reason for independence and perhaps we’ve just heard it—a reduction in the number of civil servants in Scotland”.

I am afraid that if that lot have their way there will be many more public service job losses in Scotland.

We have heard what Labour is doing where Labour is in power. We have heard about what Labour is doing in West Dunbartonshire, in Fife, in Edinburgh, in Inverclyde and in Wales, and all those efforts are to be applauded. I also want to draw attention to the Glasgow Guarantee made by Scottish Labour in power in Glasgow city council, which has resulted in a 4.4% fall in the number of young people claiming JSA in the past two years. The real point here is to compare that achievement with that of the Minister and his Government colleagues, which is a 6.9% rise over the same period.

My hon. Friend the Member for West Dunbartonshire referred to what I can only liken to attempted bullying by the Scottish Government in respect of separation, and I think we all agree that such activity is reprehensible. Indeed, over the past few days Mr Salmond has been defending the right to free speech in the press while at the same time appearing hellbent on stifling it in the Scottish business world.

Many issues are hitting Scotland hard at this time, with 218,000 people out of work, a Work programme that does not work, a rising welfare bill, welfare cuts that will increase the demands on welfare, a lack of growth in the economy, 16 to 24-year-olds being condemned to a future on the dole, a growth in underemployment, rising energy costs, a fixation in the Scottish Government with separation, and a lack of investment from Holyrood in further education for our young people.

[Anas Sarwar]

My hon. Friend mentioned the fixation with independence. Is he aware of figures out this week that show that corporation tax in the Republic of Ireland is 12.5%, with unemployment at 15%, and in Northern Ireland the figures are 24% and 8% respectively? Does that not show that the SNP’s policy of cutting corporation tax is incoherent and does not guarantee jobs?

[Gordon Banks]

I agree wholeheartedly with my hon. Friend. There is a lot that the SNP says in Holyrood that does not bear true when put under the microscope.

The Governments in Holyrood and Westminster are not focusing on policies to address unemployment. They are too distracted with their own agendas of cuts and separation. That is why one in 10 Scots are working fewer hours than they would wish to, which is contributing to a rise in in-work poverty. It is why unemployment has increased by 3.3% since 2008, and it is why 80,000 people in Scotland have been unemployed for more than 12 months. It is also why, in the past year, long-term unemployment has risen by 3% in the UK but by 11% in Scotland, and it is why economic inactivity among disabled people stands at more than 49% in Scotland. That nearly half of all unemployed Scottish workers are aged 16 to 24 is a damning statistic, but neither the coalition nor Alex Salmond seems to be focusing on that as a major issue.

In light of those extremely worrying trends, the Governments in Westminster and Holyrood need to take positive action, and I want to make a brief remark about shovel-ready projects. We are all in favour of moving such projects into job creation, but if we do that in Scotland in the way that the Forth road bridge project was handled, with all the contracts being given to overseas companies, keeping people in work in Spain, Poland, Switzerland and Germany rather than in Scotland, there is something fundamentally wrong with the procurement process, as we have heard this morning.

I urge the Chancellor to get a grip of his welfare policies and to understand their impact on our economy, and to get a work programme that does what it says on the tin. The priorities of both Governments need to change from the narrow agenda of cuts and separation, and to focus on the real tragedies occurring in our cities, towns and villages. It is the Scottish people who can deliver growth into the Scottish economy if the Governments of Holyrood and Westminster provide them with the right tools and opportunities. To do anything less demonstrates that the priorities of the Governments are not those of the Scottish people.