Unemployment in Scotland

Jim McGovern Excerpts

Wednesday 5th December 2012 Westminster Hall

[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 ---

[Jim McGovern]

My own daughter, Jillian McGovern, is one of my hon. Friend’s constituents, and she was made redundant earlier this year. Thankfully, she has managed to find a new job, with no assistance whatever from the Department for Work and Pensions. Does my hon. Friend agree that the DWP Work programme seems to be drastically unsuccessful?

[Mark Lazarowicz]

The figures clearly speak for themselves. I am glad that my hon. Friend’s daughter has found employment. Of course, one of the tragedies is that many staff in the DWP are working hard to try to make the scheme work, but are unable to do so. We all know that when there is a general backdrop of high unemployment and low economic activity, there is only so much that can be done.

Some things are being done by various levels of Government. I am pleased to say that the Edinburgh city council, through the Edinburgh Guarantee scheme, has been active not just in itself as an authority but in the private sector, encouraging the provision of real jobs and opportunities for young people. In the current year, Edinburgh city council is offering 50 new apprenticeships, 18 new training places and 50 further opportunities with council contractors. It has been encouraging private sector employers to take up that approach as well, with some success. Of course Edinburgh has a Labour-led council, which may have something to do with the success, but it certainly shows what can be done by local government, at city or district level, to respond to the current difficulties.

Clearly, a local authority can only do so much, so what we need is a change in the national picture and the national direction. We need a change of course, such as the one that my hon. Friend the Member for West Dunbartonshire referred to in her opening contribution. We also need action at Scottish level.

One of the ways in which we can provide real jobs and use the current economic downturn to provide a way out and a way forward for the future is, of course, to invest in infrastructure projects. Both the UK Government and the Scottish Government have been slow off the mark in coming up with new infrastructure projects to meet the needs of the time. I have lost count of the number of times that this Government—the UK Government—have announced new infrastructure schemes and projects, and processes and mechanisms to try to bring jobs into the sector. I accept that things are slowly happening. However, it is two and a half years in now, and we have seen hardly any new projects and hardly any new jobs on the ground as a result of the UK Government’s limited measures to promote infrastructure investment.

I also have to say that the Scottish Government have been slow off the mark. Of course, their powers are not as wide as some of their members would like, but there is a lot that they could do with their existing taxation powers and spending programmes to boost jobs and infrastructure in Scotland.

I am pleased that the Scottish Government’s Cabinet Secretary has recently presented the UK Government with a list of “shovel-ready” projects, as he described them. I think that he could have been preparing that list a bit earlier on in the scheme of things, but nevertheless it has now come forward. I know that one of the major schemes on that list is for investment of more than £100 million to develop the port of Leith in my constituency, which will be important not only for Leith—obviously—but for the whole Scottish economy. That is certainly good, and I hope that in his response to the debate the Minister will tell us that he and his colleagues in the Scotland Office—or rather, his colleague, the Secretary of State—are lobbying actively to ensure that Scotland gets its fair share of the infrastructure investments that come forward, and that those investments are put into effect as soon as possible.

That is the key point—we need action now. We do not need promises of infrastructure investment or activity two, three, four years down the line. We do not want people to be promised training places with no jobs to go into at the end of the training period. We need a change of course, and we need the measures that the Government have promised, particularly on infrastructure, to be put into effect as soon as possible, so that we see some urgency from the Government in a way that, frankly, we have not seen in the past two and a half years.

--- Later in debate ---

[David Mundell]

No, I want to deal with the issue of Jillian McGovern and address the concerns raised by the hon. Member for Dundee West (Jim McGovern) about the Department for Work and Pensions. I would be pleased to hear more about what did not happen in that regard, because I have a high regard for the DWP’s work in Scotland. Every single day in Scotland, the DWP deals with an average of 1,500 new job vacancies; conducts some 7,000 jobcentre adviser interviews; receives more than 82,000 searches for Jobcentre Plus job vacancies; and helps an average of more than 1,000 people move into work. The DWP is playing an important role, and if any Member has examples of that not working for their constituents, we want to know about them.

I have asked for a report on why Dundee city council appears at the very bottom of the report on the Work programme, and it is important to understand that, but I want to try to dispel two myths. The shadow Minister sought to perpetuate the myth that, somehow, the youth unemployment issues are a direct result of this Government’s policies. Youth unemployment is a serious issue about which we should all be concerned. As the right hon. Member for South Shields (David Miliband) has said, youth unemployment started to become a problem in this country in 2004; it is not a product of the current Government. We all have to do more to work with employers to encourage them to take on young people.

[Jim McGovern]

Will the Minister give way?

[David Mundell]

No, I want to conclude this point, because it is very important. Youth unemployment is a scourge, and we all have a part to play in dealing with it. There is a serious attitudinal problem among employers about taking on young people. They think that if they take on a young person—this is particularly the case with small and medium-sized businesses—that will create hassle and difficulty for them. We have to feed back to them that taking on a young person is a positive thing. We have to encourage employers to take a more positive attitude to bringing young people into work.