Employment in Wales

Jessica Morden Excerpts

Tuesday 27th January 2015 Westminster Hall

[Owen Smith (Pontypridd) (Lab)]

It is a great pleasure to serve under your chairmanship for the first or second time, Mr Hollobone. I congratulate my great and hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing this vital debate and on the clarity and passion with which he laid out his case.

This has been a very good debate so far. It has been slightly ill-tempered on occasion, but we have heard an excellent speech from my hon. Friend the Member for Islwyn (Chris Evans) and excellent interventions from my hon. Friends the Members for Caerphilly (Wayne David), for Clwyd South (Susan Elan Jones), for Wrexham (Ian Lucas) and for Alyn and Deeside (Mark Tami). We have also heard equally passionate, albeit slightly misguided, speeches from the hon. Members for Carmarthen West and South Pembrokeshire (Simon Hart), for Aberconwy (Guto Bebb) and for Arfon (Hywel Williams).

I wanted to respond personally to this debate, not only because it was secured by my hon. Friend the Member for Vale of Clwyd but because work and employment are at the heart of our debate in this Parliament, our politics and our economy. The success of working people, what they do with their time and how they exchange their finite time for reward, are, of course, at the heart of not only our economy in Wales but all economies.

Our growth, productivity and dynamism are reliant not on innovation, entrepreneurialism or capital investment—all words that one often hears from Ministers of all Governments—but on the sweat from people’s brows. Hard work and hard graft underpin our economy, and they are key to a successful and stable society. More than an economic driver, work is the key to people’s dignity, security and, indeed, identity. In Wales we know that more than in many other parts of the UK. In Wales, whether it has been colliers and quarrymen, women working in service or people working in steelworks or on the land, our work has been how we have defined ourselves.

[Jessica Morden (Newport East) (Lab)]

Does my hon. Friend agree that what has been ignored by Conservative Members throughout this debate—yes, there is a welcome rise in the number of people in work—is the huge rise in the number of people in temporary employment and the lack of full-time jobs? Underemployment affects 70,000 people in Wales, and a similar number are on zero-hours contracts. The Conservative party is ignoring just how precarious the employment situation is for many people who do not have a guaranteed income.

[Owen Smith]

I agree. That has been the yawning hole at the heart of what we have heard so far from Conservative Members, and I suspect it will not be filled by the Minister. In the past, our work has defined us in Wales, and work is in danger of defining us once more as a low-wage, low-security economy. That is becoming the reality of the world of work for people in Wales, which frankly is not good enough.

I do not expect the Minister to recognise that picture, and I am sure he will talk to us in a moment about the recovery and the extra jobs that his Government have created, but unfortunately the facts do not bear out his arguments or the arguments of the hon. Member for Aberconwy because the statistics are relatively clear. Despite all the rhetoric, the truth is that in May 2010, when the last Labour Government left office, there were in total 1,471,000 economically active people in Wales. Today, on the latest numbers, there are 1,471,000 economically active people in Wales. That is the reality. We have not seen a surge in new jobs in Wales; we have seen a displacement of jobs, often from the public sector to the private sector and absolutely from more secure, more stable, better paying jobs to worse jobs.

The other statistics are even more damning. In Wales, according to the Office for National Statistics labour force survey, the number of economically inactive people has gone up from 989,000 to 1,039,000; the economic activity rate has gone down as a percentage; the employment rate has remained absolutely static at 54.4%; and the economic inactivity rate has gone up from 40.2% to 41.4%, which is in part a reflection of the offsetting effects of public sector job losses in Wales over the period. Some 351,000 people were employed in the public sector at the beginning of the Government’s term; the figure is now 315,000. That is a reduction of 36,000, part of the 1 million public sector jobs that have been lost.

That is the truth of the headline statistics, but let us look a little deeper at the nature of the jobs that people are currently enjoying. There are perhaps more jobs in the private sector, but the truth is that productivity in Wales and in Britain is down; corporate and personal tax receipts in Wales and in Britain are down; investment in Wales and in Britain is down; and consumption in Wales has flatlined.

My hon. Friend the Member for Vale of Clwyd made the point earlier in relation to the respected leader of the CBI, John Cridland, who says that, if we have a low-wage economy with increasing numbers of people who are unable to pay for white goods or even basic services, we will have lower consumption, less productivity and less growth in Britain. Those are the basic economic facts in Wales, and the reason for that is simple: the Conservative party set out to create and—let us give it its due—has succeeded in creating a low-wage, low-security economy in Wales and in the rest of the UK. That has been the Conservative party’s objective—greater flexibility but, unfortunately, at the expense of working people.

It is a reality that wages are down on average by £1,600 per family over this Parliament. It is also a reality that Wales already has the lowest disposable incomes of any part of the UK—just £14,623 versus an average in England of £17,066. The Conservatives have succeeded in overseeing a shift in the nature of our employment from a relatively secure, better paid work force to a less secure, worse paid work force. The facts do not lie. Total temporary employment across Wales has increased by 28%, and in the same period the number of people on permanent contracts in Wales has decreased by 25,000, more than 2%.

There is a direct transfer of people from being full-time employees to effectively being part-time employees. Some of those people are calculated and recorded as FTEs, but that is because of the nature of their zero-hours contracts. There are 300,000 people in Wales on less than a living wage, and far too many of those people—more than 40,000—are currently on zero-hours contracts, which have been the great explosion and change in our economy. That shift from permanent, properly contracted work, in which people have rights to maternity pay, paternity pay and sick leave, towards a low-wage, insecure, zero-hours-driven culture is unparalleled in any other period of modern economic history.

I will give one illustration, involving a young woman in my constituency whom I met a fortnight ago. She is 17, just about to turn 18, and she works in a local pizza restaurant. She goes in to work at 10 o’clock, when she is expected to be there. She has no guarantee of how many hours she will work that day: it might be six, eight or two. The nature of her contract is such that she can be laid off by the company for a period of its choosing during her working day if demand in the pizza restaurant drops below a certain level. She cannot afford to go home and wait for the company to call her to bring her back in, so she sits in the back room of the pizza restaurant for up to four or five hours in the middle of the day, waiting for the volume of customers to pick up later in the evening so she can be taken on.

It is an utter scandal that that sort of practice is going on in Britain—and not just occasionally; it is becoming the norm, just as minimum-wage jobs in Britain are becoming the norm, not the exception. The minimum wage in this country is becoming a ceiling on wages, not a safety net. Governments of all colours must recognise that, and the fact that we must do something about it.