Employment in Wales

Ian C. Lucas Excerpts

Tuesday 27th January 2015 Westminster Hall

[Chris Ruane (Vale of Clwyd) (Lab)]

Thank you for that great introduction, Mr Hollobone. Bore da! Sut wyt ti y bore ’ma?

I will speak primarily about my constituency and north Wales, but I am sure that there will be interventions and speeches by Members from elsewhere in Wales—although not from any Government Members, because no Conservative or Liberal Democrat Back Benchers are present—[Interruption.] No, here they come. Better late than never.

I will focus on five areas: the quality of jobs in the UK and Wales; the impact of cuts on jobs and employment in Wales—not only the current cuts, but the proposed future ones highlighted by the Chancellor in his autumn statement; the rebalancing of a local economy highly dependent on the public sector; the possible impact if we pulled out of the European Union on job prospects in north Wales especially; and the impact of capital projects on jobs.

On the face of it, employment in north Wales seems healthy, but scratch below the surface and we see a different picture. Wages in the UK have decreased by £1,600 per annum over the past five years. There has been a shift from secure, long-term employment to short-term, zero-hours, part-time working.

Two years ago, the national press highlighted Denbighshire as having the highest level of zero-hours contracts in the UK, although the local authority disputed the figures. Nevertheless, the whole of the UK has suffered from the steep rise in the use of zero-hours contracts. The public sector has had a pay freeze at only 1%, which in real terms amounts to a cut, while the impact on ordinary workers of the casualised employment promoted by the Government is stark. Families cannot plan for their summer holidays, as they might usually do in January, because people do not know whether they will still be in employment in six months’ time.

[Ian Lucas (Wrexham) (Lab)]

Is my hon. Friend aware that Office for National Statistics figures indicate that, in the past year alone in Wrexham, the median wage fell by 7.4%? That is the impact of the Government’s policies on individuals in my constituency.

[Chris Ruane]

I thank my hon. Friend for his intervention —the freeze or cut in the public sector has been bad for workers and families in my constituency as well. Parents cannot even plan to pick up their children the following day or week because of zero-hours contracts, which bring no stability or security. Families do not even want to go in for mortgages, because they are not sure about employment in a year’s time, so they are forced to stay in private rented accommodation.

The net impact on families is a hit on their well-being and mental health, which is so unnecessary. Nor is it only the private sector that is extending the use of zero-hours contracts; the public sector is increasingly being hollowed out by the outsourcing of functions that councils used to do in-house to the private sector, the past masters in the use of zero-hours contracts. At the same time, Tory MPs and the press vilify public sector workers for having “gold-plated pensions”, saying they are mollycoddled and cosseted.

The real situation could not be further from the truth. I speak for the 4,500 public sector workers who work for Denbighshire county council and the 4,500 who work for ysbyty Glan Clwyd—teachers, nurses, doctors, social workers, care workers, all doing their best in difficult times. Workers in secure jobs are being forced to become self-employed and to take a hit on their hard-won rights on holiday pay, sick pay, redundancy, and maternity and paternity pay. The rise in the number of self-employed has not resulted in an army of Richard Bransons, Alan Sugars or Nicola Horlicks; it has resulted in workers being thrown from security into insecurity.

--- Later in debate ---

[Chris Ruane]

Absolutely. I agree with my hon. Friend entirely, and the point has been ably illustrated by my hon. Friend the Member for Alyn and Deeside (Mark Tami). When a person has invested tens of thousands of pounds in installing disability access into their council house, where is the sense in forcing them out of it into private sector accommodation, which must then have disability access added? The previous place will not necessarily be used by a disabled person. It makes absolutely no sense.

We have reached the point where even the CBI is telling the Government that they have got it wrong and that workers need a decent wage and job security. John Cridland said in The Observer on Sunday:

“I am not sure this would have been natural territory for us five years ago.

I have been banging on for a year about higher earnings growth. I have been doing that in part because it is a sensible part of economic rebalancing to have sustainable consumption. It is important that low-paid workers are able to play their part as active consumers”.

He also talked about

“inequality having reached a point where it is not acceptable from a moral point of view and that, in a commercial sense, it’s bad for business.”

That is the head of the CBI. He did not think that five years ago, when Labour was in power; he thinks it now, at the end of five years of Tory rule. The loss of £1,600 from each worker’s pocket has had a negative impact on consumption, demand and profits. That comes from the top.

[Ian Lucas]

Another crucial impact has been from the Tory VAT increase, which takes money directly out of consumers’ pockets—[Interruption.] I am sorry that the Government Members are so upset by my saying that, but my constituents are upset about money out of their pockets going straight to the Treasury rather than our high streets.

[Chris Ruane]

Absolutely. When Labour reduced VAT, that had a positive effect. All the economic indicators from 2008 to 2010 were going upwards; in June 2010, they started to go down. [Interruption.] The hon. Member for Aberconwy (Guto Bebb) might laugh, but he does not know his economics.

John Cridland added:

“I am particularly interested in the escalator that takes people who are unemployed or low-paid on to better-paid work. Something has gone wrong with it. There are two or three missing steps in the middle.”

The missing steps to which he refers will not be provided by zero-hours contracts, the minimum wage with no prospect of progression and cutbacks in skills and training.