Jobs and Growth

Chris White Excerpts

Thursday 17th May 2012 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

I am grateful for the opportunity to speak in this important debate. All too often, when we talk about the economy we speak in terms of GDP figures, confidence indices and the like, and they are very important, but we should always remember that this is about people’s lives and aspirations.

Employment in Warwick and Leamington has held up well over the past few years. In May 2010, 2,002 people were claiming jobseeker’s allowance. In March 2012, that had fallen to 1,646. Warwick and Leamington has climbed nearly 100 places and has gone from having the 414th highest level of unemployment among constituencies in the UK to having the 507th. I believe that that is a tribute to the inventiveness of our local businesses, the hard work of our local jobcentres and the determination of local residents to find work. However, while there is reason for optimism, we must also be aware of the challenges.

The number of those claiming JSA over the past 12 months has risen from 265 to 310 and although that figure has fluctuated, it makes it clear that we need to continue to build an economy that can create long-term and sustainable jobs, particularly for our young people. It will not be surprising to Members to learn that, as the co-chair of the associate parliamentary manufacturing group, I believe that manufacturing is the key to creating that sustainable labour market.

Although we all agree that there needs to be economic growth, we do not wish to achieve that through just any type of growth. We should not think of our situation merely as a short-term problem that needs short-term solutions, whether that involves stimulating demand or supporting the supply side.

Manufacturing is best placed to support the objective of increased employment for a number of reasons. First, manufacturing is strongest in those areas where private sector employment has been weakest. In the midlands, the north, Scotland and Wales, manufacturing occupies a bigger part of the economy than in London and the south-east. If we can increase manufacturing growth, it is likely that employment gains will be better spread across the country and we will tackle those parts that have traditionally suffered from structural unemployment.

Secondly, the nature of manufacturing is changing. It requires greater skills and higher levels of education. The UK Commission for Employment and Skills estimates that by 2017 the percentage of manufacturing jobs in high-end occupations—mostly degree-level employment—will rise from 27% today to 37%. That means there will be about as many people in high-end occupations in manufacturing as there will be in low-end occupations.

Thirdly, work within manufacturing is often higher paid than that in services. Average weekly earnings, including bonuses, in the manufacturing sector were £532 compared with £449 in the services sector. Finally, manufacturing jobs have a significant spillover effect into other parts of the economy. They enable the creation of services and other sectors around those jobs and help to provide pillars on which other parts of the economy can build. That increase in manufacturing employment presupposes manufacturing growth, and while I do not have the time to consider that in this speech, it is something to which I hope to return in the near future.

If we want to prepare our work force, and particularly our young people, for work in manufacturing, we need to ensure that we take steps now to support that aim. One of the best ways that we can do that is to support apprenticeships. However, we must ensure that they are the advanced and higher levels of apprenticeships so that we meet the increase in the number of higher level positions. According to the latest data, there were 200,300 apprenticeship achievements in 2010-11. However, only 1,000 were higher level apprenticeships. The number of advanced level apprenticeships completed was around 33% of the total and we need to ensure that, as we increase the total number of apprenticeships, that figure is not diluted.

The best way to support jobs and growth, however, is to give more support to our small and medium-sized manufacturers so that they can take on new employees. More grants should be given to small and medium-sized enterprises and manufacturers to train the new staff they hire, particularly those who have been long-term unemployed or who are aged between 18 and 25. Unlike larger businesses, SMEs often are not able to rely on the economies of scale that can reduce training costs. This presents a significant barrier not only to increasing employment but also to growth. I hope that the Government will look at ways of increasing the support we can give to SMEs in this regard with greater financial incentives for those higher-end qualifications that will become more important in the years ahead.

I believe that any long-term improvement in our economy has to be built on manufacturing if it is to be sustainable and create the kind of jobs we need to diversify our labour market. Increasing our manufacturing sector and reskilling our labour force will not be quick or cheap but that does not make it any less necessary. Although we face times of public stringency, we should not defer investment. That will only mean that we have to wait longer for the rebalancing to happen. I am confident that if both sides of the House can work together, support the manufacturing agenda and provide the long-term political buy-in that the industry wants in order to make long-term investment decisions, we can achieve the outcomes that we all want.