Jobs and Business

Gordon Birtwistle Excerpts

Friday 10th May 2013 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

Before I start, I should just say that I understand that my hon. Friend the Member for Hartlepool (Mr Wright) and the Secretary of State for Business, Innovation and Skills, shared a birthday yesterday. I just want to wish them a belated happy birthday so as to start on a positive note before moving on to the Government’s record since the previous Queen’s Speech. It is right for us to take stock, to look at where we are now and where we were last year, before considering Her Majesty’s Gracious Speech.

When we convened to debate the speech last year, unemployment had soared beyond 2.6 million, we were in a double-dip recession, and the Government were borrowing £150 billion more than they forecast to pay for the cost of their failed economic plan. The Secretary of State’s answer to that state of affairs was to bring forward an enterprise Bill that started with some sensible measures, but ended up becoming a Christmas tree of a Bill. It contained measures to water down the statutory remit of the Equality and Human Rights Commission, to trample over people’s rights at work, to overturn health and safety protections that have existed for more than 100 years, and to abolish—this came rather late in the Bill’s progress—the Agricultural Wages Board that protects agricultural workers. That was all done in the name of growth, without a scintilla of evidence to show how doing so would create jobs and boost enterprise.

The right hon. Gentleman then went on to co-sponsor the Growth and Infrastructure Bill. That did not even feature in last year’s Queen’s Speech, but sought, among other things, to establish a shares for rights scheme where, in return for being given shares in their employer’s company, employees would be required to sacrifice their rights at work. That was described by the Government’s own side as having all the hallmarks of being thought up by somebody in the bath. Again, no evidence was produced to show that the measure would produce growth.

There is an irony in all this. Last year, the Business Secretary had gone around saying that he did not think much of the Prime Minister’s employment law adviser, the Conservative donor Adrian Beecroft, and his proposals to run a coach and horses through people’s rights at work, which, by Mr Beecroft’s own admission, had no evidence base whatever. There is clearly a thin line between love and hate, because the Secretary of State did Mr Beecroft proud in the last parliamentary Session. That is not to say that his coalition partners should be absolved of the blame—they were all in it together, to coin a phrase. Notwithstanding the fact that what they were doing was wrong in principle, I fail to understand the politics of it. Let us take the Conservative party, a party that has not won a general election since 1992. We are told that it has a strategy of gaining 40 seats and retaining 40 of their most marginal seats at the next general election, yet 70% of those 40 seats it wishes to retain have significant numbers of agricultural workers. In fact, 10 of the constituencies most adversely affected by the abolition of the Agricultural Wages Board are Conservative marginals, including Lancaster and Fleetwood, Weaver Vale, Hastings and Rye, Sherwood, and Morecambe and Lunesdale. At the general election, we will remind every single voter in those seats of the Conservative party’s betrayal of them.

What has happened to the economy since the Government’s first two Queen’s Speeches? The Secretary of State made various international comparisons in his contribution. Since October 2010, the UK economy has grown by just 1.1% compared with the 6% forecast made by the Office for Budget Responsibility, and 3% growth in Germany and 4.3% growth in the US during the same period. Unemployment is stuck around the 2.5 million mark. A large number of those in work are working part time when they want full-time work, and people have faced an average pay cut of £1,700. Let us not forget that that was all being done in the name of reducing borrowing. We now have a situation where the Government are borrowing £245 billion more than they planned—the equivalent of the health and education budgets combined, and then some.

The Secretary of State is an economist. The reason why this strategy is failing was put very well to me, when I sat on the Treasury Committee, by a former member of the Monetary Policy Committee, Adam Posen. He highlighted the problem of the Government’s strategy. What they were attempting to embark on was an experiment. It was the most extreme consolidation embarked on by any Government in the western world at this point in a country’s recovery from the economic heart attack to which the Secretary of State referred. That is why their policy has failed.

[Gordon Birtwistle (Burnley) (LD)]

The hon. Gentleman says that the German and US economies have done well and have not faded like our economy. Does he accept that those two countries supported their manufacturing sector while the Labour party, when it was in charge, ran our manufacturing sector down from 22% to 9% of GDP?

[Mr Umunna]

I certainly accept that we want to grow our manufacturing sector, but the Secretary of State has conceded that, for example, the things we did in the automotive industry by setting up the Automotive Council have helped to increase the output of that sector. So I do not agree that we did nothing to boost manufacturing in this country.

My right hon. Friend the shadow Work and Pensions Secretary will talk later about the failure of the Government’s schemes to get the unemployed back to work.

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[Mr Umunna]

I completely agree with my hon. Friend. Some things I support, such as the start-up loan scheme, could be of real benefit to our different diverse communities, particularly to young people and young entrepreneurs seeking to set up businesses. The problem up to now—I appreciate that James Caan is doing fantastic work on this—is that there has not been enough awareness of it. I have offered to help him raise such awareness in our different diverse communities.

[Gordon Birtwistle]

Does the hon. Gentleman agree that the destruction or non-acceptance of careers advice in schools—by both the previous Government and, I have to say, the present Government—is not helping young people to get into apprenticeships or further education? Does he agree that if we got professional careers advice back in our schools, more young people would be interested in doing apprenticeships rather than going to university to study subjects that in some cases will not lead to any job?

[Mr Umunna]

That is an extraordinary intervention from the hon. Gentleman, given the huge cuts that this Government have made to information, advice and guidance, including to careers advice. I remind the hon. Gentleman that it is his Government—and he voted for it—who have cut and destroyed Connexions. I know from experience in Lambeth in my constituency that Connexions made a massive difference.

Let me move on to infrastructure. Good infrastructure, of course, is at the heart of an industrial strategy and crucial to creating the right business climate. That is why we asked the chairman of the Olympic Delivery Authority, Sir John Armitt, to crack this issue for us.

In the Queen’s Speech, after three years of dither and delay, we have finally seen some movement on transport infrastructure in the form of the HS2 Bill. I think I speak for many business people when I say that people would like to see this Government move on aviation, too. The Government should bring forward the date for Sir Howard Davies’ review of aviation and ensure that his report is produced before the general election. We need no more dither and delay on that issue either.

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[Gordon Birtwistle (Burnley) (LD)]

It is a pleasure to make a contribution to the debate on the Gracious Speech, which was delivered earlier in the week. I want to talk about the economy, particularly in relation to apprenticeships and trainees.

I intervened on the shadow Secretary of State about rebalancing the economy, and he accepted that we have to do that. He did not comment when I asked him why the previous Government reduced the 22% of GDP that came from manufacturing to 9%, and how they managed to do that. Rebalancing our economy is vital to get this country out of the financial mess we are in, because we cannot rely on the City and the service sector to pull us out. We came into government three years ago with the manufacturing sector representing, as I said, 9% of GDP. Thankfully, that proportion is now growing.

Unfortunately, we do not have enough people in this country to do the jobs that the manufacturing sector is going to need. It is anticipated that over the next 20 years the civil aerospace sector will be ordering $7 trillion to $9 trillion-worth of new aeroplanes. Many of the parts and engines for those aeroplanes are manufactured in the UK. That will almost double the aerospace industry in the UK, but as things stand we will not have the skills to deliver those products to the industry. That is a big problem.

[Mark Hendrick (Preston) (Lab/Co-op)]

The hon. Gentleman will know that Barnoldswick, which is not very far from his constituency, has a major manufacturer of aerospace blades for Rolls-Royce engines. Why do not Rolls-Royce and other similar companies working in the aerospace sector take on and train more apprentices to meet the demand he is talking about?

[Gordon Birtwistle]

I can tell the hon. Gentleman that I was pleased to visit the Rolls-Royce training facility in Derby only a couple of weeks ago, and I was delighted to see the millions of pounds of investment being put into it. Rolls-Royce has picked up the story and is getting on with it.

There has been a lack of apprenticeships and training, certainly in engineering, in which I have been involved all my life, for the past 20 years. We cannot have someone who is an apprentice today assembling aeroplane engines tomorrow. It is a long process. The Government have started that process with the apprenticeships scheme, and over the next few years we will be able to deliver on this. It is very difficult to train apprentices to become skilled people who can deliver what is needed for $9 trillion-worth of aeroplanes over the next 20 years, but we must get on with it. Thankfully, we have made a start, although we are not moving fast enough.

We quickly need to resolve the situation with the national aerospace supply chain centre, which has been agreed by the Government but for some reason is stuck in the Whitehall mandarins division. Having been here for three years, my view of what goes on behind the scenes with the mandarins is that it seems like “Yes, Prime Minister”. I watched that series on television and thought, “No, it can’t be like that”, but actually it is. We come here and listen to all the statements about what we are doing, and then it is still being done 12 months down the line. Setting up the national aerospace supply chain centre must be a priority, and I hope that it is located at the Samlesbury site of BAE Systems. I hope that the proposed national skills centre will be set up at the same site. That centre will train 600 apprentices a year for the aerospace industry, for United Utilities, and for the shale gas industry—another industry coming through in the north-west that will need skilled people.

[Bob Stewart]

Many people who learn trades in the armed forces have a problem translating their qualifications into civilian life. We could do more to equate armed forces qualifications from places such as Cosford with those that are required in the aerospace industry, because there are people who could easily move into that industry.

[Gordon Birtwistle]

My hon. Friend makes an excellent point. I was about to move on to the oil industry, to which former members of the armed forces make a substantial contribution. I was on an oil rig in the North sea about 12 months ago and quite a number of ex-military personnel were working there. The medical officer was an ex-Army officer and some of the cooks in the restaurants were ex-Army personnel. It is good to see that they are making such a contribution.

The oil industry, which is more or less a forgotten industry, contributes billions of pounds to economy. One national oil company is about to invest $11 billion in the North sea. The site is about 100 km off the coast of Scotland, but every bit of kit is being provided from overseas. That is an outrageous scandal. That kit should be produced in the UK. Unfortunately, we do not have the companies to do that any more because we have let them disappear over the past 20 years. The previous Government let them disappear without batting an eyelid because they thought that the financial sector could bail us out of anything.

[Mr Kevan Jones]

The hon. Gentleman is speaking complete and utter 100% rubbish. If he goes to the north-east of England or to Scotland, he will see first-rate British companies that are providing not only hardware for the oil industry, but vital support.

[Gordon Birtwistle]

Exactly; once the kit has been provided, the support comes from those companies. No company on the north coast of Scotland can build a 17,000-tonne jacket or a topside that weighs more than 45,000 tonnes for the North sea. Those pieces of kit are being built in Spain and South Korea.

[Mr Jones]

If the hon. Gentleman goes to the technology park at Walker in Newcastle, he will see that 80% of the world’s under-sea umbilical cable is built by two companies in the north-east. That is a success story not just for the north-east, but for UK plc. I am sorry, but his notion that there is no productivity in this country for the oil and gas sector is complete rubbish.

[Gordon Birtwistle]

I refer the hon. Gentleman to what I said earlier about major structures. I agree that sub-sea equipment is built here. I used to own an engineering company that still builds sub-sea equipment. However, we can no longer build major structures.

[Mr Jones]

That’s not where the money is!

[Gordon Birtwistle]

I do not want to have that debate across the House, Mr Deputy Speaker.

I will move on to trainees and apprenticeships, and the national shortage of skilled people for the jobs of the future. I was told yesterday that of the £106 million budget for the National Careers Service—bear in mind that 1 million young people are out of work— £84.5 million is spent on people over 25, £15 million on prisoners and £5 million on offering careers advice to young people. I think that that is the wrong way round. We should be spending at least half the money on getting young people into the jobs of the future and a little less on people over 25 years old and prisoners. I was shocked to hear that we spend three times more money on careers advice for prisoners than on careers advice for young people who are leaving school. That is outrageous and I hope that the Government will look at it. We need to increase the number of apprenticeships and traineeships to provide people with the skills and the jobs that will be required for this country’s economy in the future.

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[Mark Hendrick]

We do not need caveats. The Labour Government will not take responsibility for the housing market in the US. The Minister says that we blamed international factors, but the current Government try to blame the eurozone for the current deficit, which is absolutely ludicrous. The policies they introduced when they came to power in 2010 were such that a second dip was likely. We told them a second dip was likely, and that is what happened. We have nearly had a third dip.

The 1 million jobs in the private sector that the Government keep bragging about are low-paid jobs, many are part time, and they are doing nothing to contribute to growth in this country. As we can see, growth is flatlining.

The Government talk about the growth of more than 100,000 apprenticeships. The hon. Member for Burnley was perfectly correct on the excellent apprenticeships offered by companies such as BAE Systems, Rolls-Royce and many other good companies up and down the country. When I was an apprentice—I am sure he was an apprentice in his day—apprenticeships generally took three or four years, and apprentices had to gather lots of skills and relevant qualifications. Some of the so-called apprenticeships that the Government label as such are weak and involve very little in the way of qualifications. Some apprenticeships are in things such as cake decoration or hairdressing. We need hard skills in high-tech, high added-value industries to get this country back in growth and back to being a power in the industrial world, but they are not the skills involved in what the Government label the 100,000-plus apprenticeships.

[Gordon Birtwistle]

Yes, I was an apprentice engineer, and apprentices then did three or four years, but I have friends who are apprentice hairdressers and a relation who was an apprentice baker. It is wrong to decry the skills available. It might not take three or four years to learn them because of technology, but people work hard for those skills and deliver a service with them afterwards.

[Mark Hendrick]

I would go along with that, but we are not comparing like with like. I am saying that an apprenticeship over four years that leads to a highly skilled job with well respected qualifications is very different from what is on offer. In the past, those positions have not traditionally been called apprenticeships.

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[Mark Hendrick]

The 3 million figure comes from the European Commission and many other respected and independent bodies. [Interruption.] The hon. Gentleman, from a sedentary position, wishes to challenge that figure. Can he give me a figure and substantiate it? Voting no in the referendum will have a serious impact. We can argue about whether it will affect hundreds of thousands of jobs or up to 1 million jobs, but it will have a serious impact on employment and our ability to trade.

Many people are saying that due to globalisation we are trading more with countries such as China and India. That is welcome, but is no substitute for the market we have on our doorstep—the EU. Any future trade with the EU, should we choose to leave, will be conducted on terms dictated by the remaining members of the EU, not a British Government. That will have a big impact on jobs and a bigger impact on the prosperity of this country.

[Gordon Birtwistle]

I am grateful to the hon. Gentleman for giving way; he is being very generous. Does he agree with the protestations of some Members that if we pull out of Europe Mercedes will still be delighted to deal with us? My concern is whether the people of Germany will still be delighted to deal with Jaguar Land Rover when we are no longer a member and tariff barriers are introduced.