Youth Unemployment and Bank Bonuses

Charlie Elphicke Excerpts

Monday 23rd January 2012 Commons Chamber

[Rachel Reeves]

In the hon. Lady’s constituency, long-term youth unemployment has gone up by 25% in the past few months. I do not know what she says to her constituents—“There’s loads of jobs out there. Just go and get one”? More people are chasing jobs than there are jobs available. That is because the Government are pushing more and more people out of work. I am sorry that the hon. Lady does not know the numbers for her constituency, but we know.

[Charlie Elphicke (Dover) (Con)]

The hon. Lady talked about the scarring effect of the fast-buck culture. Will she condemn the right hon. Member for South Shields (David Miliband) for taking a consultancy with private equity?

--- Later in debate ---

[Geraint Davies (Swansea West) (Lab/Co-op)]

At the centre of this debate is the question of what the optimum balance should be between growth and cuts, and in what time scale we should bring down the deficit. I contend that the debate should not be some sort of auction about who will cut what when; it should be about who has the most creative, realistic growth strategy, predicated on what has happened in the past. Let us look at the Labour party’s record, to which people have referred. Post-1997, we created 2 million more jobs. We replaced interest rates of 10% to 15% with very low rates, thanks to the independence of the Bank of England. With those jobs and those taxpayers, we doubled our investment in the health service and reduced debt. We have a fine record to build on.

In 2008, as we all know, there was a financial tsunami, generated by sub-prime debt in the United States. Our then Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), got together with Barack Obama to ensure that we delivered a fiscal stimulus, and that there was not a depression. We had a shallow recession, and then fragile growth. Then the Tories arrived, and immediately announced 500,000 job cuts. Consumer confidence and demand were thrown out with the bathwater. Immediately, people in the public sector thought that they were going to lose their jobs, and would not spend money. People in the private sector stopped taking on employees, and we ended up with the deficit rising. The deficit forecast is now £158 billion above what it was; when Labour came in, the deficit forecast was falling. The question is what we should do to bring back confidence.

[Charlie Elphicke]

Will the hon. Gentleman explain whether he agrees with the shadow Chancellor, who said the other day,

“we are going to have keep all these cuts”?

[Geraint Davies]

I am not opposing having to make savings and cuts. I am saying that the key is growth. As a business man in Swansea said to me, “It would be no good laying off my workers and selling my tools if I was making a loss; I would need to grow my sales while making savings.” That is the focus. That is why there is a five-point plan focused on national insurance for the building industry, on VAT for extra consumption, and on taxing banker bonuses to generate jobs and infrastructure growth.

In addition, we need a credible growth strategy focused on the growth opportunities in the global economy, namely the emerging consumer markets in India, China and south America. What are we doing to re-engineer our financial markets, our modern manufacturing, and our services, so that they are tailored to those markets? What will we do about getting capital opportunities from surplus-rich countries such as China, or oil-rich countries, so that they invest in our infrastructure? What are we doing to skill ourselves up for future markets? Those questions do not seem to be being asked or answered tonight.

In Swansea, I am talking with prospective manufacturers from India about linking up with the university and providing a manufacturing base to build on the cutting-edge life science research taking place there. I am talking with possible investors about investing in manufacturing facilities. There are companies such as Tata near Swansea, which are already investing in the modern manufacturing of steel, which will have six layers and can create its own energy and heat, so there are new global opportunities. This debate has been completely focused on who will cut most, when. That is going nowhere. We cannot cut ourselves out of this economic problem. We have to grow, invest and reposition our industry.