Job Insecurity

Sheila Gilmore Excerpts

Wednesday 5th February 2014 Commons Chamber

[Vince Cable]

The hon. Lady is right, and it is one of the major casualties of the banking crisis that SME lending dried up. We are taking action on that through the business bank and in other ways. Restoring credit to the SMEs through the banking sector is a critical objective and it is a constraint on growth.

The shadow Minister’s conclusion was a good issue to embark on, and I just wish that he had spent more than two minutes and the last line of the motion on it. There is a real issue about how the recovery will be sustained. There are deep problems, including the lack of trained people and the rebuilding of supply chains. I would love to have a long debate with him about the industrial strategy, how we extend it, and what a Labour Government would do to reinforce it. I do not know whether the shadow Chancellor will come up with some more money, but I would be delighted to hear that it would have that kind of support. But the shadow Minister dismissed it as an afterthought in the last two minutes of a half hour speech, and I was, frankly, rather disappointed by that.

The shadow Minister chose to focus on jobs, and they are of course central. I want to address the issues of employment and employment conditions—

[Sheila Gilmore (Edinburgh East) (Lab)]

I thank the Secretary of State for giving way before he moves on to the next section of his speech, because I would like him to correct the possible misinterpretation of the IFS report that he has given. While matters might be beginning to turn round sooner than it thought last year, its general conclusion was that

“there is little reason to expect a strong recovery in living standards over the next few years…real earnings are not expected to return to their 2009-10 levels until 2018-19.”

[Vince Cable]

That is correct. I was merely referring to the point at which things start to turn around and improve. The IFS, like everyone else, underestimated the strength and speed of the recovery. Of course, its forecasts, like everyone else’s, may have to be revised upwards.

I have been responding to debates from my current position for the best part of four years, and I have seen the Opposition’s jobs argument go through four or five iterations. When we first started, the argument from the Opposition was that the attempt to deal with the fiscal crisis would result in mass unemployment. That now looks positively silly today, but if they go back to their speeches in 2010, that was their prediction. We now have the highest level of employment ever—30 million. We have 1.3 million more people in employment than in 2010. The jobless—unemployed—total has fallen not just in relative terms, but in absolute terms by 650,000 to 7.1 %. Of course, there are regional variations. I accept that there are particularly serious problems in the north-east, which is the only part of the UK that has double-digit unemployment.

It is worth contrasting the overall picture with some other countries that had a far less serious experience of the financial crisis than we did. Sweden has 8% unemployment. The unemployment rate in Canada, which everybody thinks is a wonderful economy—we recruited our central banker from there—is higher than in the UK. In the eurozone, even including Germany and Austria, it is 12%. Our unemployment position is significantly better than that of most other western countries.

--- Later in debate ---

[Justin Tomlinson (North Swindon) (Con)]

It is a real pleasure to participate in this debate, which is covering some important areas. Like my hon. Friend the Member for Ipswich (Ben Gummer), I think that there are all too many missed opportunities in the Opposition motion on this important subject.

The reality is that we are 1.6 million private sector jobs up since the general election. Let us contrast that with the scandalous situation in which the number of workless households more than trebled under the previous Government. It became the norm for future generations just to accept that they would never have the opportunity to work. I have talked in previous debates about how the fact that the school I went to was at the bottom of the league tables and that I had seen generations of people robbed of an opportunity is what got me involved in politics and in supporting the Conservative party.

In my constituency, unemployment has fallen by 34% and youth unemployment by 30%. Let us remember that no Labour Government have ever left office with lower unemployment, which is their real legacy.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Justin Tomlinson]

I will not, because time is limited and other speakers would have their time cut.

The number of apprentices has now doubled to 1.5 million, which is really worth while. Partly driving that improvement has been our support for businesses through new employee incentives, such as the extension of business rate relief, the cut in corporation tax, start-up business loans and the enterprise allowance—all measures that I have supported and that the Opposition have voted against.

The national minimum wage is incredibly important. I spoke about it in the Opposition day debate a few weeks ago. I am a big supporter of the national minimum wage. I support the fact that fines will be increased and that they will quite rightly be targeted on a per worker basis. I want more to be done and for us to be proactive in focusing not just on businesses, but actual decision makers within them, because members of staff are being exploited. In some cases, it is borderline slavery. That is rife in many parts of our economy—the restaurant trade, the night-time economy—and much more could be done. The figures show that people have got away with it all too often, not only recently but in the long term.

I know that the shadow Secretary of State did not want to discuss his personal situation, but when I ran a business, employed people and got them to contribute positively to society, I always made sure that I paid a fair wage. I incentivised my staff and they shared in the business as it did well, because they were more productive—a win-win situation.

The Government have done much to help keep money in the pockets of hard-working people. The income tax threshold has been raised, and 2.4 million of the lowest earners now pay no income tax at all, while 25 million people have had a tax cut. I have gently encouraged the Chancellor of the Exchequer to state any changes, positive or negative, on payslips so that people realise when and why they get more or less money. That would help to create further security.

The Government have reversed Labour’s trend of continuing to put up fuel duty. There were 12 disgraceful rises in just 13 years, but we cancelled the next six proposed increases. We even cut fuel duty, and since then we have continued to freeze it. That is important because fuel is the single most important tangible cost—the one thing which the public can say exactly how much it costs—so keeping its cost down will help to improve confidence. We have also cut the beer duty, which has been much welcomed, and the triple lock for pensions has meant the biggest ever cash rise for pensioners on fixed incomes.

Council tax has now been frozen in most councils, predominantly Conservative ones, for four years in a row. I pay tribute to my local authority, which in the next couple of weeks will set its fourth council tax freeze, in stark contrast to when Labour ran the council and put it up by a disgraceful 42% in just three years. Fear not: they were booted out of office on the back of that. It is right that the Government have encouraged and incentivised councils to freeze council tax.

Finally, in respect of youth unemployment, we need to encourage young people to consider becoming young entrepreneurs. I welcome the fact that 400,000 new businesses have been created since the general election. However, more young people need to understand that they do not just have to go to university or do an apprenticeship, because they might have the ability to set up their own business. Young people have the enthusiasm, energy and risk-taking ability to do so. I did a business degree at university. Of the 350 students on the course, I was the only one who went on to run my own business because entrepreneurial flair and risk-taking were taught out of us. Obviously, I was not paying enough attention. I therefore welcome organisations, such as Outset in Swindon, that provide mentoring for young people so that they can use their enthusiasm, having been inspired by TV programmes such as “Dragons’ Den” and “The Apprentice”, to become the next generation of wealth creators and provide further employment opportunities.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am pleased to follow the hon. Member for North Swindon (Justin Tomlinson), because I want to counter some of the myths that have been perpetuated. It is constantly stated that Labour Governments always leave office with unemployment higher than when they came to office. That is not true. Between 1945 and 1951, unemployment fell under a Labour Government. For much of the 1950s and 1960s, the position was very stable. Let us contrast that with the 18 years of Conservative Government between 1979 and—[Interruption.] Government Members can brush it aside if they wish, but for 13 of those 18 years, unemployment was higher than 10%. When the Conservative Government left office in 1997, unemployment was brought down by the Labour Government and it fell in every year until the financial crash.

[Andrew Percy]

It’s somebody else’s fault.

[Sheila Gilmore]

It would be very strange to place the blame for a world financial crash on the Government of one country.

The other myth that has been perpetuated is that pensioners have this Government to thank for the largest cash rise in pensions ever because they introduced the triple lock. It did not happen because of the triple lock; it happened because inflation was so high in that year, which was largely due to the increase in VAT. If Members care to remember, it was said that that was never going to happen. The rate of inflation is the reason why the cash rise in pensions had to be so high. For pensioners, it was merely an inflationary cash rise. It had nothing whatever to do with the triple lock. If nothing had changed in the policy, the rise would have been exactly the same.

I want to touch on what all this means for a lot of people. We hear a lot about all the private sector jobs that have been created. However, nearly 500,000 of those private sector jobs are in the health and social care field, and most of those are funded by the public sector. They are private sector jobs only because they have been outsourced. For far too many of those employees, the working conditions have worsened. Earlier, a Government Member sought to intervene to say that Labour councils have outsourced contracts. I know of Labour councils that have outsourced contracts. My council has such contracts because it inherited them from the previous Liberal Democrat council.

Private firms are operating social care services on the basis of zero-hours contracts. People who work in the social care sector, much like the McDonald’s workers who have been discussed, wait at home to see how many hours they will get each week. Not only is that bad for the employee who never knows how much she will earn from one week to the next, but it is absolutely atrocious for the person for whom the care is being provided. It is no wonder that people do not know who their carer will be on any given day when the work is organised in that fashion.

The Government cannot escape responsibility for that situation. Why are councils finding themselves in that position? In Scotland it is largely because we have now had the council tax freeze, which has been mentioned, for six or seven years. It is not properly funded; local councils are strapped for cash, and as a result they are looking for experience in how to provide services. If a care service is outsourced, for example, it provides very poor employment circumstances for people.

Another problem that people encounter when on such contracts is how they organise child care. How can they do that if they never know when they will be able to work? One couple I spoke to at the weekend told me that they had to give up the possibility of both working, because they could not organise child care around their work contracts. That has knock-on consequences not just on their working conditions, but also on other aspects of their working life. These real issues are happening in all our constituencies, and we need to change that.