Jobs and Growth

Shabana Mahmood Excerpts

Thursday 17th May 2012 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

Given that the economy is in recession, with the first double dip for 37 years, that long-term unemployment is at its highest since 1996 and that 1 million young people are out of work, it is shocking that the Queen’s Speech contains no measures to deal with those problems and, therefore, utterly fails to address the crisis that millions face.

I wish to focus my remarks on unemployment and, in particular, on youth unemployment and the Government’s failure to understand that there is an unemployment emergency in our country. We have had a Budget and a Queen’s Speech that have failed to deliver on jobs and desperately needed economic growth. Not only is that complacent; the Government do not seem to understand that every day they waste in failing to take comprehensive action to get our economy moving again, and our people into work, represents a tragic waste of talent, aspiration and confidence for more and more of our citizens.

My constituency has the highest rate of unemployment in the country, at 21.6%, and youth unemployment is at 11.2%—that is, 2,200 young people looking for work. From March last year to March this year, there was an 84% increase in the number of young jobseeker’s allowance claimants out of work for more than six months, and a shocking 91% increase in the number of unemployed young people out of work for one year or longer. Youth unemployment alone is set to cost Birmingham as a city £400 million in the coming decade.

Behind each statistic is a young person, bruised and battered by their experiences of job hunting under this Government and terrified that they will be part of the lost generation. They tell me that they have worked hard, overcoming difficult social and family circumstances to get qualifications, only to find that none of it matters. It is depressingly normal for young people in my constituency to tell me that they might as well not have bothered, that their effort has been wasted and that they do not know where to turn.

A climate of fear is already brewing among young people still at school, who despair that their chances of getting on have been kicked away by the cuts to education maintenance allowance and the trebling of tuition fees. They watch their older siblings getting into debt and sending off CV after CV with no luck and no hope, and fear that they will end up in the same boat.

Yet the Government do nothing but create more damage. They cut the future jobs fund, which was making a real difference in my constituency, as soon as they came into office, saying that, at £6,500 per job created, it was simply too expensive. Last week, the National Audit Office told us that the Government’s flagship regional growth fund will create 41,000 jobs, not the 500,000 that the Government originally claimed. The NAO also said that most of these jobs would have been created in any event and that each of them will cost us £33,000, with a cost, in some cases, of as much as £106,000 per net additional job. So the Government got rid of something that was making a real difference, saying that it was too expensive, and brought in something that is even more expensive but is not making the difference they said it would. That proves that they are not only out of touch and complacent but incompetent.

Unlike Labour’s proposal for a real jobs guarantee, the Government’s youth contract does not guarantee a job; it is merely a subsidy to an employer who is hiring a young person which covers only half their wages and does not create a new job. Labour’s plan for a real jobs guarantee would go much further, guaranteeing a job after 12 months of unemployment and covering the full wages for the employer.

In failing to deal with youth unemployment, the Government are storing up problems for the future, because if we allow the young unemployed of today to become a lost generation, they will be the long-term workless of tomorrow. As I have seen in my own constituency, which already suffers from long-term worklessness, getting back into work people who have been out of work for significant periods, or who have never been in work, is a significant challenge that costs huge sums. Problems that have been a generation in the making will take at least that long to fix, so it is far better, on every measure, to stop us getting to that point in the first place.

The young unemployed in my constituency and across our country were looking for a change of course and a sense of hope, but I am afraid that in this Queen’s Speech there is neither change nor hope—just a confirmation that this Government do not listen, do not care, and do not have a clue.