Unemployment

Sheila Gilmore Excerpts

Wednesday 14th December 2011 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

The report issued by the Office for Budget Responsibility at the time of the autumn statement made it clear that the boom was greater and the recession sharper and deeper than had previously been thought. It also stated that the recovery in 2009 was stronger than had previously been thought, and that it was brought to an abrupt halt in the second half of 2010. Perhaps the Minister would like to reflect on what happened in 2010 to change things.

[Chris Grayling]

What the hon. Lady has missed is that the OBR said at the time of the autumn statement that the structural deficit—not the cyclical deficit—that we inherited from the previous Government was much worse than it had previously believed. That means that the economic legacy that we inherited was much worse than we had previously believed. It is therefore a much bigger task to overcome that and to get the economy growing again, to get jobs being created again and to get Britain moving.

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[Dr Whiteford]

Not at the moment, thank you.

It has been evident in Scotland over the past year that the growth of private sector employment has outweighed falls in public sector employment. We now have the highest share of private sector employment that we have had since the advent of devolution. [Interruption.] Although unemployment has fallen across the piece in the past year, it shows that the Scottish Government’s decision to boost investment in the public sector and in infrastructure as far as possible has been a way of offsetting the problems of investment that have been apparent in other parts of the UK—[Interruption.] If the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) wants to make an intervention, I am happy to accept it. If not, perhaps he could stop heckling.

If we are serious about tackling unemployment, we need to accept that the cuts introduced by the Government are biting very hard indeed across the whole UK, and that the announcements in the Chancellor’s autumn statement do not go far enough. Crucially, they will not address the immediate challenges of high levels of unemployment and a high benefits bill. I am not sure how we will pay for that in the current circumstances.

[Sheila Gilmore]

Will the hon. Lady give way?

[Dr Whiteford]

I will not at the moment, thanks. Time is pressing.

In Scotland we are experiencing 32% real-terms cuts to the capital budgets and even after the announcements in the autumn statement, the Scottish capital budget will still be cut by £3 billion over the spending period. More importantly, 70% of the new consequentials announced in the autumn statement will not be available until the year after next. Waiting until 2013 will not deal with the problem that we need to tackle now. What we need is investment in infrastructure.

Much has already been said today about youth unemployment. For those of us who came of age in the 1980s there is a horrible sense of déjà vu. I was one of those who had to put up with the 1980s and see the problems at first hand. When I hear young people in my constituency bemoaning to me the prospects that they are now facing, I have great empathy. It was exactly the same in the 1980s, when we were all told that unemployment was a price worth paying, and a whole generation was relegated to the scrapheap. We are still living with the legacy of that and dealing with the social consequences of it. It was not just about economics. It was about our society and the prospects of a whole generation.

Across the UK we have seen diverse approaches to tackling youth unemployment. It is far too high everywhere, but, as we have heard today, there has been a range of approaches in the devolved Administrations. In Scotland there have been 25,000 apprenticeships, a significantly higher number than before. It even exceeds what the UK Government are doing. University and college places have been maintained. Efforts have been made to ensure that apprenticeships that fall through because companies have gone under as a result of the recession are continuing and those young people are getting back into work. The Opportunities for All initiative is making sure that every young person aged 16 to 19 will get a work or training opportunity.

I hope Ministers will take the opportunity to sit down with Finance Ministers across the devolved Administrations and look specifically at how we can tackle youth unemployment. There are different approaches and there are good ideas coming from different parts of the UK. It is such an urgent problem and such a challenge with such serious long-term consequences that I hope the Minister will take action. We were told in the 1980s that unemployment was a price worth paying. It was not a price worth paying. It is never a price worth paying. It must be the Government’s top priority.

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[Sheila Gilmore (Edinburgh East) (Lab)]

There has been some dispute about whether the coalition Government are the greenest Administration, but they are definitely good at recycling. In particular, the Prime Minister has recycled figures about private sector jobs in the past year and a half. Today, he said that the Leader of the Opposition was recycling jokes, yet he recycles the figure of half a million private sector jobs. Initially, it was half a million in the Government’s first six months; then, it was half a million in the year since they came to power, and now it is half a million since the election. The problem is that it is exactly the same half a million jobs. Half were created in the first quarter of the financial year that started in 2010. What caused that—the actions of the Government? I think not. It was the stimulus provided by the previous Government, whom the coalition Government are so fond of rubbishing. They do that consistently. After that burst of jobs, almost nothing has happened. The promise that if we squeezed the public sector, the private sector would rise up, take the strain and create jobs is not being fulfilled. Until we and our constituents see signs of that, we will simply not believe the Government.

As well as job figures, the Government are recycling ideas. Part of their approach since the election has been to suggest that unemployment is somehow a problem of individuals—of their not being willing, skilled enough or having the financial incentive to work because the benefits system is so generous. I was fascinated to come across a quotation from Sir John Anderson, who was head of the then Prime Minister’s Secretariat in 1930. At a time when people were worried about unemployment, he said:

“Unemployment statistics give an exaggerated view of the magnitude of the problem”.

Why? Because

“a large number of people really abused the Unemployment Insurance Scheme”.

I do not think that many would say that unemployment in the 1930s was caused by people abusing an extremely low amount of benefit. It shows that nothing changes. The Conservative party has always said that at times of high employment. Increasingly, its coalition partners are also saying it. It was said in the 1930s and it was not true then; it is said now and it is still untrue.

That is not to say that training is not important, but it is not new, either. In Edinburgh, the city council considered employment in the first decade of this century. We had historically low unemployment at that stage, but a residual number of people were out of work, some for a long time. We considered training schemes and specialised job academies. For example, we had a health care academy and a social care academy, and we know that taking action is not always easy. The trouble with the Government is that they think they are at ground zero with many things. They imply that we did nothing and that they have sprung into life to make things better.

Yes, we need to train people properly, but training is not a job. The Work programme does not of itself create jobs. We must be absolutely clear about that.

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[The Minister of State, Department for Work and Pensions (Steve Webb)]

It is important in the few minutes remaining to put on the record some of the facts about the current situation, because there is a danger that the tenor of what we have heard from the Labour party might talk down the British economy and lead to an unnecessary depressing of confidence at a time when we need realism, not talking down the hard-working people in our economy.

Let me give an example. One would hardly believe from today’s debate that since the general election, the number of people in work in this country has risen by a quarter of a million. In fact, the number of people in private sector jobs has risen by more than half a million.

[Sheila Gilmore]

Will the Minister give way?

[Steve Webb]

In a second. So when it is said that the private sector is not expanding, that is simply not right. People say that there are no jobs, but there are half a million additional private sector jobs. The hon. Lady made the point that that is looking over the whole period, so I will take her at her word. Let us look at the last month. In it, the number of people in work has risen by 38,000. Of course, we can all choose different time periods—Labour Members used the last quarter, for example—but my point is that selective use of statistics, such as that made by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), creates a highly misleading impression and talks down the British economy in a way that is in nobody’s interests.