Unemployment (North-east)

Bridget Phillipson Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Wright]

I absolutely agree with my hon. Friend, and I will go on to mention some job losses that her constituency is facing. The region still, and by a considerable margin, has the highest unemployment rate in the country at 11.3%. The figures published today show that unemployment has increased by 8,000 in the past quarter, to 145,000 in the north-east. The number of people claiming jobseeker’s allowance has increased by 900 on the previous month. In Hartlepool, the number of people unemployed stands at 4,612, a rate of 11.6% and the 30th highest of all the UK constituencies. That jobless figure of 4,612 is more than 10% higher—503 higher—than it was a year ago.

Today’s statistics also show that the number of people who are economically active in the north-east has gone down, from 75.4% to 75.2%, as has the proportion of the adult population in employment, from 66.6% to 66.5%, whereas the national rate for England is 70.8%. On unemployment and economic prospects, the gap between the north-east and the rest of the country is getting wider and should be a huge cause of concern for the Government. From their actions—or rather, the lack of them—and from the priorities we have seen today in their not sending a Minister, I do not get the sense that that is the case at all.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does he share my concern about the rising level of female worklessness in the north-east? Many women have been forced out of work because of Government cuts and cuts to tax credits. My concern is that the evidence shows that stronger economic growth is associated with higher levels of female employment—growth that we desperately need in the north-east and in the wider economy.

[Mr Wright]

My hon. Friend is absolutely right. She has been a strong champion in this regard, both in this House and beforehand, standing up to make sure that women have the rights they require to fulfil a vital economic role. In our region we certainly need female, and part-time, workers.

I want to mention the loss of jobs in recent months. Between June 2010 and December 2011, the latest period for which figures are available, the north-east lost 7,000 manufacturing jobs and 84,000 construction jobs. According to statistics obtained by the TUC, in the north-east nine jobseekers are chasing each job vacancy. In contrast, in Oxfordshire there are just 1.8 jobseekers for every vacancy. It is therefore more than five times more difficult to find work in my constituency than in Oxfordshire. It is not that the people do not want to find employment or are workshy. There are no jobs to fill.

I could mention statistics until I am blue—or red—in the face. Many people will gain some comfort from statistics, large numbers or percentages. However, behind every statistic lies a human story of a person who is made redundant and is worried about how they will pay the bills and put food on the table, or of someone rejected after making their umpteenth job application and fast losing hope and sense of self-worth, or of a parent worried about how their son or daughter will get a job or career without any experience.

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[Grahame M. Morris]

Absolutely. My hon. Friend makes an excellent point much more forcefully and directly than I could, and I completely agree with her.

It is up to this Government to learn lessons from those things that worked in terms of regeneration and growth and saw our region prosper in sectors such as exports over the past decade. I find it quite offensive when members of the governing coalition denigrate Labour’s efforts over the past decade, as if that Government produced no overall success.

I did not intend to quote statistics, but I shall put a couple on the record. Based on gross value added per head, the rate of growth in the north-east went from being the lowest of all regions during the 1990s to the second highest during the past decade. Let me also put to bed another myth propagated by the Tory party which claims that our public sector was squeezing out the private sector. That is just not true. As other hon. Members have indicated, in our view the public and private sectors are not mutually exclusive but mutually supportive. Between 2003 and 2008, private sector employment rose by 9.2% in our region, while at the same time public sector employment grew by only 4.1%. Between 1999 and 2007, the number of businesses in the north-east rose by 18.7%—a huge increase that compares favourably with London’s business growth of about 19.6% over the same period.

[Bridget Phillipson]

May I give one example from my constituency to illustrate the link between public sector investment and private sector job creation? A local electrical company, Alex Scullion Electrical Contractors, carried out a lot of work with contracts to renovate social housing, apply the decent homes standard and build new social housing through labour investment. Now, however, times are difficult because that investment has dried up. That company played an important role in securing private sector jobs and supporting apprentices, and there are clear linkages between money that the Government spend and the creation of jobs in the private sector.

[Grahame M. Morris]

Absolutely. That is a terrific point and there are many similar examples. In my constituency, Carillion was involved in infrastructure projects including Building Schools for the Future and hospital building programmes. I did not mention it earlier but that company has announced 130 redundancies.

There is no doubt that the north-east was hard hit by the global downturn of 2008, but the policies of this Government are entrenching a north-south divide. To quote a Nobel prize-winning economist, Paul Krugman:

“The urge to declare our unemployment problem ‘structural’—a supply-side problem of some kind, not solvable by the ‘simplistic Keynesian’ notion of just increasing demand—has been quite something to behold. It’s rapidly entering the category of a zombie idea, which just keeps shambling forward no matter how many times it has been killed.”

The problem is that demand has been depressed. We need to stimulate demand in the economy. Quite simply, communities and areas such as mine throughout the region cannot pull themselves out of the mire without Government support. Targeted support and intervention are what we need.