Unemployment (North-east)

Helen Goodman Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Wright]

I am sure that we will see a “Focus” leaflet in due course saying that everything in the garden is rosy and that the Liberal Democrats are fighting hard. The reality—my hon. Friend is right—is that where they can make a difference by going through the right Division Lobby, they are failing to stand up for the north-east and for the people who need jobs and investment in our area.

The Government’s determination to depress demand before the economy has had a chance to recover from the global financial crisis is wrong. The effects of such a policy are a double-dip recession made in Downing street and an increase in unemployment. The Federation of Small Businesses in the north-east told me that the ability of small business to offer jobs is suffering directly because of falling sales, as the public sector reduces investment, confidence collapses and firms sit on cash. It is clear, as businesses recognise, that the Government’s policies are making matters worse. Does the Whip not understand that? Can he not see that if the Government pursued a more active role on jobs and growth, there would be more people in work, paying taxes, more companies paying corporation tax, a reduced benefits bill and the deficit being paid down faster. By sticking to an economic plan that is not working—that is clear to all and sundry—the Government must borrow £150 billion more than originally anticipated.

[Helen Goodman (Bishop Auckland) (Lab)]

We have commented on the position of Liberal Democrat Members from the north-east, but has my hon. Friend noticed that Tory Members from the north-east have not even come to the debate?

[Mr Wright]

I am grateful to my hon. Friend for highlighting that point. I had noticed that the hon. Members for Stockton South (James Wharton) and for Hexham (Guy Opperman) have not bothered to turn up for the debate, which shows the importance that they attach to economic enterprise, growth, jobs and unemployment.

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[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to see you in the Chair, Mrs Brooke.

I congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing this extremely important debate. I am beginning to think that this Government have adopted a Marxist attitude to the unemployed. They are the reserve army to be marched on to the pitch at a moment that is convenient and off at a moment that is inconvenient. They seem to subscribe to the lump-of-labour theory: this is the lumpen proletariat, there to be used and abused. What that demonstrates is a moral failure and an economic failure.

It is a moral failure because no account is taken of the individuals who are unemployed—the level of unhappiness, the level of stress, the level of anxiety. A young man came to my surgery recently. He used to hold down perfectly good jobs. He has now been unemployed for 12 months. He is being driven crazy—literally crazy. He is suffering from mental illness. He shouts at everybody—he shouts at my staff; he shouts at the jobcentre staff—and who can blame him? He is 30, living at home on £56 a week and the vacancy to worker ratio is 1:9. He does not have a realistic chance of getting a job.

It is an economic failure because we are wasting people and wasting people’s skills. One of the worst things is the constant denigration of unemployed people—not just cutting benefits, but treating unemployed people as though they are workshy. Nothing could be further from the truth. In my constituency, 2,920 people are on jobseeker’s allowance, but the statistics show that there are 6,400 people who want a job. That tells us that there is a huge need and a mismatch.

We have to ask ourselves: who are the people who are unemployed? They are not a great lump. Not only are they individuals, but they fall into particular categories. One thousand of them are young people; they do not have experience, so it is very difficult for them to get jobs that require experience. Five hundred of them are over 50; where are they supposed to gain new skills when we see the increases in tuition fees and the cuts to adult education? There has also been a massive increase in the number of women who are unemployed—up by 25% in the past year.

That has come about because the Government are putting cuts before everything else. When they do that, it leads not just to spin-off problems for the private sector, but to a complete skills mismatch. Someone who has been working in the public sector in a service job cannot simply be shoved into a manufacturing job and the assumption made that they can do it. Of course they are not qualified to do it.

We need a strategic approach from the Government in both skills and finance, as my hon. Friend the Member for North Durham (Mr Jones) said. When we had a regional development agency, we had not only a strategy, but a source of finance. I think we need some new sources of finance. When we have a Labour Government again, it would be fantastic if we had an RDA that did not just provide grant financing, which is what we had under the previous Government; there should also be some loan financing. Then, small firms like the one described by my hon. Friend could be confident of getting reasonable treatment.

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[Stephen Crabb]

I dispute that. The Government are trying to move away from the one-size-fits-all policies of the previous Administration. We are looking at locally and regionally tailored solutions, where appropriate.

Several hon. Members mentioned today’s labour market figures. I am not as gloomy as the shadow Minister about them. There are reasons for a measure of optimism. Nationally, employment is up by more than 400,000 since 2010. Private sector employment has gone up by 843,000, since 2010, and it has gone up again in the past month. In the past 12 months, in the north-east region, employment overall has gone up by 10,000 and private sector employment has increased by 17,000, which more than offsets the drop in public sector employment. That counters the point that the Opposition made about the drop in public sector employment being a driver of overall unemployment in the north-east region.

Those are encouraging signs, but we recognise that unemployment remains too high. It is true that unemployment in the north-east remains higher than in other parts of the country. Several Members have referred to the fact that it has the highest unemployment figures of all the UK regions.

Long-term unemployment affects only a minority of people, but it is a particular concern because it brings with it the risk of detachment from the labour market and people losing the hope of finding work again or finding that the skills that they had are diminished or outdated.

In the north-east, more than 24,000 people have been claiming unemployment benefits for more than 12 months. That figure is much lower than it was 25 years ago—the hon. Member for Hartlepool referred to the 1980s—but it is still too high, and we are not complacent.

One of the groups that has been hardest hit during the last two years of recession is young people. We have seen encouraging signs recently that youth unemployment might be starting to come down. Excluding unemployed students, it fell by 23,000, to just over 700,000 in the most recent quarter. That still leaves almost 50,000 16 to 24-year-olds unemployed in the north-east, so there is clearly much more to be done.

In April, we announced an additional £1 billion package of support for young people through the youth contract. Very few Opposition Members mentioned the action that is taking place and the fact that, in the past year, some 7,000 young people have benefited from the work experience scheme in the north-east. Nor did they mention the fact that there are 30,000 additional apprenticeships in the north-east, more than 1,000 of which are in the constituency of Hartlepool. It is not surprising that they do not want to talk about it. As Labour Members elsewhere have mentioned, one of the big failings of the previous Labour Administration was that they did not recognise fully the importance of apprenticeships and the link between high-value apprenticeships and upskilling in the economy.

[Helen Goodman]

Surely, the hon. Gentleman is aware that the number of apprenticeships increased tenfold under the Labour Government.

[Stephen Crabb]

In the last 12 months, 67% more apprenticeships were created than in the last year of the previous Labour Government.