Jobs and Growth

Sheila Gilmore Excerpts

Thursday 17th May 2012 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

In light of the earlier intervention, I thought my hon. Friend might be interested to hear figures, provided to the Work and Pensions Committee yesterday by the Department for Work and Pensions, on the issue of people who had apparently been off benefit. In March 2010, there were 18,000 young people who could have been put in that category, and there are now 4,000 in terms of training allowances. That is a difference of 14,000. As I think my hon. Friend would agree, that hardly explains the rise in youth unemployment.

[Alison McGovern]

I thank my hon. Friend for that helpful and informative intervention.

When the Chancellor talked about a growing economy, one of my hon. Friends shouted, from a sedentary position, “Not in the north-east.” We need to recognise that worklessness does not impact equally on all communities. That is why when we think about the growth we need, policy needs to be tailored properly to the economy in each and every part of the country, so that the GDP growth we all hope for represents the whole of the UK. I suppose it is entirely possible that the UK will recover, but leave behind heavily blighted areas of our country.

A study of unemployment reveals a key flaw in the Government’s thinking. They have talked about “expansionary fiscal contraction”—in other words, to achieve growth, the Government need to slash their budgets and investment will flow in from foreign shores. I do not believe that that is consistent with the Government’s other stated aim: to rebalance the economy. Finance for those parts of our economy that have strengths in manufacturing but need regeneration is necessarily long term. Government industrial strategy should shelter our industry from global headwinds, not leave us vulnerable.

Fiscal contraction at the pace we have seen has harmed blighted areas that had only recently started to recover from the impact of previous Conservative Governments’ attitude to industry. In my area, I see the impact of the withdrawal of central Government from regeneration and the stopping of regional growth via regional development agencies. The responses built into local government that were designed to target deprivation, which clusters in particular parts of our country, were stripped away in the financial settlement.

In the Budget, the Chancellor introduced measures that took money out of the pockets of people on low and middle incomes in those parts of the country where we want to rebalance. That will not help. Someone in the Treasury has to take responsibility for looking at the macro impact of all the measures that are affecting those places that stand to be the worst affected by this Government. We have had a botched Budget and then a next-to-nothing Queen’s Speech, I am sorry to say. The Government will be judged by the people in Wirral and Merseyside not merely on the GDP figures, but on the actual development we see in our city. We must take account of the differential impacts of Government measures on different parts of the country with different economies; we must not focus only on the national picture.

My question for the Government is: will they meet the test of real economic development? Only that will promote the widespread employment that people want. People will judge this Government on the basis of whether or not they see their friends and family in employment.

--- Later in debate ---

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I welcome the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) back from a potential sojourn in Birmingham as mayor—his announcement that he wanted to stand was so powerful that Birmingham, on the spot, rejected the whole idea of having a mayor. I have got to know him well over the past couple of years and he has been heavily involved in designing the policy framework for the Opposition. He talked about part-time work and, as a result of his leader’s decision, he will experience it himself. I am sorry about that, because I am sure that he would have done a very good job had he been allowed to continue—I certainly suspect that he would have done better than some of his colleagues.

Today is about the Queen’s Speech, and I want to welcome a number of Bills: the Crime and Courts Bill, the children and families Bill, the draft care and support Bill to modernise the care system, and, importantly, a pensions Bill to provide once and for all a decent single-tier state pension to reward those who save. Let me say a few words about that matter and in tribute to the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). He and I have worked very hard together and I hope that when we publish the White Paper both the House and the country will see that we are proposing a genuine and serious reform that should improve the quality of retirement for everybody in the future. We will reform the state pension system, creating a fair, simple and sustainable foundation for private saving. The main benefits of the Bill will be that it will enable individuals to take responsibility for meeting their retirement aspirations in the context of increasing longevity and create an affordable and sustainable pension system for future generations.

Let me respond to a few of the comments made by hon. Members on both sides of the House. The right hon. Member for South Shields (David Miliband), who I see in his place, made an elegant speech, as ever, in which he referred to a number of different issues. In particular, he mentioned youth unemployment, and I want to ensure that we establish the baseline on that point. The trouble was that the previous Government gerrymandered the figures on youth unemployment. When somebody had been unemployed for six months, they put them on one of their programmes—the future jobs fund or whatever—and took them off the unemployment register. They were not put back on to the register until they fell out of that programme—[Interruption.] Members might want to hear this. If we add together the figures, we see that the total number of claimants aged 18 to 24 on jobseeker’s allowance or other forms of temporary support is lower this month than it was in May 2010. Under the previous Government, during a period of growth, youth unemployment rose every year from 2006.

[Sheila Gilmore]

The Secretary of State appears to be unaware of a briefing that his own Department gave to the Select Committee on Work and Pensions yesterday, which exposed the lack of rigidity in the figures. Apparently, the correct figure shows that in March 2010 the number of people who were taken off benefit on a training allowance was 18,000. It has come down to 4,000, but will he accept that that does not explain the rise in youth unemployment?

[Mr Duncan Smith]

Labour gerrymandered the figures, and that was a long suicide note about what they tried to do to change those figures. The hon. Lady can try as much as she likes but the truth is that the previous Government set in place every single mechanism to ensure that they did not count young unemployed people.