Unemployment in Scotland

Iain McKenzie Excerpts

Wednesday 5th December 2012 Westminster Hall

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Thank you very much, Ms Dorries. It is a pleasure to serve under you this morning.

I begin by congratulating my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing this debate. I think that many of us had suspected that we would have seen the full ranks of the Scottish National party here in Westminster Hall this morning. Instead, they sent the normal token gesture in—the hon. Member for Na h-Eileanan an Iar (Mr MacNeil)—and he has fled the scene of the crime already. That is no help whatsoever.

All too often we hear from the SNP about “shovel-ready” projects; indeed, they have been mentioned again in Westminster Hall this morning. I can tell everyone here today that there are hundreds of young people in my constituency who would desperately love to get on the end of a shovel and be gainfully employed, because that is the thing that they really want to do and the inability do it causes deep depression in households and communities, which is something that, as a nation, we can ill afford. When I say “a nation”, I do not just mean Scotland; I mean the entire UK. Young people desperately want to be out there being gainfully employed.

In about three hours’ time, we will have heard the bulk of what the Chancellor has had to say today. I do not hold out many hopes, but I am open to persuasion and I am ready to be surprised as he makes his autumn statement. However, my area is a rural area. I will mention figures this morning and I apologise to the Minister before I start mentioning them, because those figures are for Dumfries and Galloway; they are figures not only for my constituency and my backyard but for part of his backyard as well. The reality is that although the unemployment figures in our area are desperately high, he and I both know that our local economy is based around small and medium-sized enterprises, and there are enough SMEs that if all of them took on one extra person we would just about wipe out unemployment in my local area.

The difficulty is that our two largest employers are the local authority and the local health board, and the impact of the cuts that we have seen in the last few years, both under the coalition Government in Westminster and under the SNP Government in Edinburgh, is really breathtaking. It is not a surprise to those of us here in Westminster Hall today, but it may well be to those outwith here, that we actually saw cuts happening in Scotland in our local area in the public sector at least two years before there was any cut in block grant to the Scottish Government. So it was all happening under the guise of this great nationalist Government, and quite frankly it was destroying the base for jobs and any sort of growth in my local area.

In October 2010, there were 2,691 jobseeker’s allowance claimants in Dumfries and Galloway; in October 2011, there were 3,042; and in October 2012 the figure had grown to 3,205. As for the long-term unemployed, there are now just over 900 people who are long-term unemployed in Dumfries and Galloway, which is the highest level since 1999. Those long-term unemployed people, many of whom are young people aged between 18 and 25, find themselves in a desperate plight.

Again, it is unfortunate that the sole SNP Member who was present earlier—the hon. Member for Na h-Eileanan an Iar—has now left, because we even had a situation earlier in the year when one of our local regional list MSPs, a lady by the name of Joan McAlpine, decided to have a jobs summit. [Interruption.] A sharp intake of breath—no further comments please. She decided to hold a jobs summit and she introduced to the local community the Minister responsible for youth unemployment, a lady called Angela Constance. We have heard nothing since. That “summit” was a talking shop and I regret to say that I had to force my way in to see what was actually going on. It was all window dressing, with nothing to show for it.

I know that colleagues have already mentioned the future jobs fund and how some people have said that it was not working. In fact, the Prime Minister himself said that it was

“expensive, badly targeted and did not work.”—[Official Report, 19 January 2011; Vol. 521, c. 832.]

So, at a very early stage of this coalition Government, the decision was made to scrap the future jobs fund. That left many of us somewhat bewildered and confused, because not that many months beforehand officials in the Department for Work and Pensions were saying that it was a good programme and it was working.

I apologise to colleagues if I am about to divulge information that they are already aware of, but only last month the DWP published a document entitled, “Impacts and Costs and Benefits of the Future Jobs Fund”. It said:

“Under the baseline assumptions, the FJF programme is estimated to result in a net benefit to participants.”

That was estimated at approximately £4,000 per participant. In addition, the net benefit to employers was estimated at approximately £6,850 per participant; the net cost to the Exchequer was estimated at approximately £3,100 per participant; and the net benefit to society was estimated at approximately £7,750 per participant. I am no economist—quite frankly, I am not an expert in anything—but I would have thought that those figures showed some sign of a good return for the investment that was being put in.

I visited a number of young people who were working on a future jobs fund programme, along with my hon. Friend the Member for Glasgow North (Ann McKechin) who is sitting beside me now and who was a Minister at the time. We jointly visited a group of young people and they were delighted at the opportunity that they were being given to work. Suddenly, however, the new Government deemed that the future jobs fund was a failure.

I could go on at length, but I will not because I know that there is another colleague, my hon. Friend the Member for Inverclyde (Mr McKenzie), who wants to speak. However, we have seen the cuts in the numbers of nurses and midwives in our areas, and the cut in police support staff in our areas, and quite frankly that is down to a combination of the coalition Government and the SNP. So, if we are talking about crime, they are partners in crime in what has happened in my area.

It is not that Labour does not have an answer. I am sure that my right hon. Friend the Member for Morley and Outwood (Ed Balls), the shadow Chancellor, will make his point this morning, and it is about the 4G mobile spectrum and the £3 billion that can come from that, and it is also about tax on bankers’ bonuses. Those are not just warm words: this money can be used constructively, to do something for our country and for the unemployed. On the back of some of that, we could have 100,000 jobs for young people and bring forward investment.

The country has been here before. When the Labour party came to power in 1997, we gave a commitment to the people of this country that we would use a windfall levy on the privatised utilities to create the new deal; we carried that commitment through, and it worked for the benefit of unemployed people. I just hope the Chancellor will listen a little today to the shadow Chancellor and to some of the views expressed in this debate.

[Mr Iain McKenzie (Inverclyde) (Lab)]

rose—

[Nadine Dorries (in the Chair)]

Order. Mr McKenzie, I will call the Opposition Front-Bench spokesman at 10.40 am, so if you take just 10 minutes, that would be great.

[Mr Iain McKenzie (Inverclyde) (Lab)]

Thank you, Ms Dorries. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing this important debate.

I would love to be here debating employment levels in Scotland, but, unfortunately, we are here to debate Scotland’s unemployment figures, which are, quite frankly, a national disgrace. It seems that when the Conservatives get into power, they look on unemployment as a price worth paying, and as something that has to exist to balance employment. We know, however, that it does not have to exist.

The Scottish unemployment rate is above the UK average, and Scotland is a black spot of unemployment on the UK map. What a message that sends to the rest of the UK and beyond, especially when we are trying to attract business and inward investment to Scotland.

Why are these things happening? The UK Government and the Scottish Government are failing the people of Scotland. One is preoccupied with austerity and cuts, while the other is preoccupied with the constitution and a desire to march into a dreamland of independence, although what Scots people have at the moment is a nightmare of unemployment.

Youth unemployment is at crisis levels. What message does that send to our young people, who need work and who want to work? They now find that their only opportunity of finding work is probably to leave Scotland, and our numbers are diminishing across communities.

I want to spend a bit of time contrasting those issues with what has been happening in my constituency. Inverclyde is a speck of light on the dark map of unemployment that is Scotland. Believe it or not, Inverclyde has actually managed to reduce its unemployment numbers. There are several reasons for that, which I will go into later, but it is also thanks to Labour—a Labour MP, a Labour MSP and a Labour-led council—which has focused on, and been delivering, jobs for the people of Inverclyde.

Two years ago, the council took the brave decision to go it alone and fund the future jobs fund, which the Government cut when they came to power. That will be increasingly difficult as the council’s budget is squeezed, and this year’s settlement for local government looks bleak indeed. In the past, Inverclyde was the second-best performer across the UK on the future jobs fund, with a success rate that saw 90% of people going into jobs. In terms of young people not in education, employment or training, we have achieved single figures, and we would hope to achieve zero this year, although, as I said, it looks as though local government funding will, unfortunately, mean that that target is out of our reach.

We hear much about Government contracts with jobs and apprenticeships written into them, but that is nothing new in Inverclyde, where we have had such things for many years. We set ourselves an ambitious school estates reprovision programme, and we wrote into the contracts the need to provide for local labour and a number of apprenticeships if those contracts were to be won, and that was very successful. By 2014, our school-building programme will mean that across Inverclyde all schools will be new or refurbished, and that will bring many jobs.

Just last week, I brought together 40 employers, the jobcentre and unemployed people in Inverclyde at a jobs fair. Our target is to ask employers to give the best possible start to someone in Inverclyde in the new year, by giving them a job.

Along with the local MSP, I have been highlighting our area’s ability to play a part in renewable energy and wind turbine construction. We have the skills and the infrastructure, but, unfortunately, we do not have the backing of the Scottish Government, who have been extremely unhelpful, cutting our regeneration projects to zero next year, which will eliminate any progress on our waterfront development. They have also given only a small amount of support to our schools programme—just £5 million, as opposed to the £80 million we were given when Labour was in power in Scotland, which allowed us to create many jobs and regenerate Inverclyde.

In the 2011 by-election, the First Minister and many others visited Inverclyde, telling us that good times were around the corner and that jobs were there for us—if we just voted a particular way, the jobs would emerge. The First Minister promised us so much, but absolutely nothing has materialised—evidently, we did not vote the way he wished. Two hundred Scots are losing their jobs every day. We are facing an unemployment emergency, and the lack of action by either Government is resulting in increasing unemployment levels, which look to be the worst for many years.

Many of my hon. Friends have mentioned how drastically ineffectual the Work programme is and that it has had no impact whatever on unemployment levels. Its lack of success in my constituency is such that it has placed only 1% of people in employment. Goodness me, I could have done that myself over a weekend and saved the Government a fortune. That was a saving that could have been made.

Labour Members believe we can create jobs using a tax on bankers’ bonuses and a windfall from 4G. We can put people to work and give young people hope again; if the Government really want to create jobs, they can. Our constituents need and want work, and young people need hope for the future. We should not let another generation be sacrificed to unemployment.