Unemployment in Scotland

Graeme Morrice Excerpts

Wednesday 5th December 2012 Westminster Hall

[Graeme Morrice (Livingston) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries, and it is good to see you back out of the jungle. I welcome the opportunity to speak in this important debate, and I congratulate my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing it.

This debate is being held on the day that the Chancellor of the Exchequer delivers his autumn statement, which will highlight the true scale of his poor performance in the period of high unemployment, weak growth, rising borrowing and declining wages that is gripping the nation. Even the outgoing Governor of the Bank of England has warned that the UK faces a

“rather unappealing combination of a subdued recovery, with inflation remaining above target for a while”.

The latest quarterly inflation report indicates that the UK could be stuck in a low-growth environment, with economic problems in the eurozone and the rest of the world continuing to have an impact.

The Ernst and Young ITEM Club report published on Monday states that Scotland’s overall output decline of 4% over the past four years puts it on a par with the troubled Spanish economy, and that Scotland’s economy is unlikely fully to recover until 2016. This year will be the third out of five in which the Scottish economy has shrunk. The report also predicts growth of just 0.7% next year, which was “well below normal” and lower than the expected UK figure. It estimates that 60,000 jobs will be shed in the Scottish public sector between the start of the 2008 financial crisis and the end of its forecast in 2015.

[Lindsay Roy (Glenrothes) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries.

Is my hon. Friend aware that the local government in Fife is investing £5 million in creating modern apprenticeships, which is an extension of the jobs fund?

[Graeme Morrice]

Yes, and I welcome that initiative by Labour-led Fife council. Others that have been mentioned—initiated by Labour-led local authorities in Scotland—are clearly to be welcomed.

The matters I was referring to represent yet more miserable news for Scotland, and underline the need to address business growth and harness the job-creation potential of our small and medium-sized businesses as a top priority. It is a cause of concern that the Scottish unemployment rate is 8.1%, which is higher than that of the UK. Some 218,000 people are now out of work in Scotland. The UK and Scottish Governments must share responsibility for those continually disappointing figures. As a result of their decisions, this is a really bad time for families who are worried about their jobs and their children’s futures, and are struggling with higher food prices and energy bills.

In my constituency, long-term unemployment rose by 380% in the past year, which is the worst figure since the general election. That is truly depressing news for young people and women, and for the 1,700 workers who are losing their jobs at the Hall’s of Broxburn meat processing plant and for the 50 employees at Vion’s headquarters in Livingston. People in Scotland are not only falling victim to the failed policies of this bungling Tory-led and Lib Dem coalition in Westminster, but are suffering from the Scottish National party’s inaction and incompetence in Holyrood. I notice that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) has just left.

The coalition Government are running out of excuses. Their flagship welfare-to-work programme has failed to get people into proper jobs. Under the Work programme, firms and charities are paid to find jobs for the long-term unemployed, but as my hon. Friend the Member for West Dunbartonshire said, only 3.8%—four in every 100— of Scottish people on the programme succeeded in gaining a job for six months or more, which is well below target.

[Jim McGovern (Dundee West) (Lab)]

It gives me no pleasure to say that the Dundee city council area has the worst record for creating jobs under the Work programme. The figure currently stands at 1.4%. We obviously have the separatists in power in Edinburgh and in Dundee. When can we expect them to stop saying that the big bad boy in Westminster did it and ran away?

[Graeme Morrice]

Indeed. I certainly concur with my hon. Friend’s comment. I will be coming to that same point shortly. Let me emphasise again that the Work programme is a miserable failure because the Government are not taking seriously their responsibility to create jobs, and what they have done has been exposed as worse than doing nothing.

The figures show that 101,000 young people are out of work in Scotland and, at 23.5%, the proportion is higher than in the UK. That means that close to half of all unemployed people in Scotland are between the ages of 16 and 24. If we deprive such a substantial number of young people of the benefits of work, we will once again pay the price for many generations to come. They are David Cameron’s lost generation. With such high levels of youth unemployment, education and training are crucial to enhancing young people’s skills and improving their chances of finding a job. Many young people I speak to in my constituency express the view that Government, and decision makers more generally, have abandoned them.

The default position of Alex Salmond and the SNP Government at Holyrood is to blame the situation on the London parties, and that is now wearing thin. It would be a tragedy for Scotland, and for the UK as a whole, if the devastating impact of the economic slump on hard-working people, families and communities is made worse by the unholy trinity of David Cameron, George Osborne and Alex Salmond failing dismally to do anything meaningful on jobs for Scots.

In contrast, Labour has a clear, coherent five-point plan for growth and jobs to help struggling families and support small businesses. Increasing employment will only come from business growth, so both Governments must boost capital investment, and the UK Government must incentivise business lending, to enable firms to create more jobs. The Government can start to address the matter in Scotland, and across the UK, by using the £3 billion windfall generated from the sale of the 4G mobile phone spectrum.

I look forward to hearing what the Minister has to offer at the end of this debate. The Government must take responsibility and come forward with an action plan to tackle unemployment and give Scotland’s people the opportunities that they need to thrive.

--- Later in debate ---

[David Mundell]

There was a black hole because, for a significant period of time, the previous Government were spending more than they brought in. That is the reality, and the hon. Gentleman cannot pretend otherwise. Today we have heard various versions of the plan Labour now has to turn the economy around, but the core of that plan remains more spending, more borrowing and more debt—exactly the same prescription that brought the country to its current state.

[Graeme Morrice]

Is it not the case that the current Government are borrowing far in excess of what they are spending? Indeed, based on their original projections, they are borrowing substantially more than they anticipated.

[Nadine Dorries (in the Chair)]

Order. We are getting into a debate on the economy, rather than on unemployment in Scotland. Can we keep to the subject of the debate?