Economic Growth and Employment

Steve Rotheram Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Stephen Metcalfe]

I agree that having an unsettled work force is not healthy, which is why it falls to business men to reassure their staff. However, it is possible to unsettle a business by insisting that it employ staff when there is not necessarily a role for them and it might be difficult to afford them.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Will the hon. Gentleman give way?

[Stephen Metcalfe]

No I will not, I am afraid.

Responsible businesses have, and recognise that they have, a duty of care towards their employees and will often put their welfare before their own. They will not take decisions that would destabilise an existing business. As someone who has run my own business—and, unfortunately, had to let staff go—I know how difficult those decisions are to take and how painful they can be on both sides of the divide. Businesses do not want to take risks with the livelihood of those whom they already employ, so they may not hire additional staff unless absolutely they are sure that they are needed and affordable. Trying to downscale later could be costly and time-consuming, so they avoid the risk.

The proposals announced today might well help employers to make the decision to hire earlier, thus stimulating employment and growth, especially in small and medium-sized enterprises. If each one were to employ one additional member of staff, we would have an employment deficit. This will build on what has already been achieved in the last 18 months, with 500,000 new private sector jobs, more than 500,000 new businesses created, the manufacturing sector growing and our credit rating restored.

Labour Members would have us believe that they left us with some golden economic legacy, but nothing could be further from the truth. In the 13 years they were in power unemployment rose, workless households rose, and households where no one had ever worked more than doubled. Unfortunately, we also saw youth unemployment, which we all accept is a problem when it has risen to nearly 1 million. That is why I welcome the measures that the Government have brought forward, particularly in my own constituency, which has seen the number of apprenticeship places rise this year from 560 to 740.

The Opposition’s plan B is not credible. It just means spending more money that we do not have, because they have spent it all. It means borrowing more, and hang the consequences. It means saying, “Hide the bills, stop opening the post, don’t answer the door.” Well, that will not work. When you are in a hole you must stop digging, but we are trying to climb out of the hole that we are in. The Opposition’s solution means doing the equivalent of going to a payday lender to borrow and spend your way out of trouble. We all know what happens when people do that: they lose their credit rating, and that is a really serious problem which could cost this country many billions of pounds that it does not have.

--- Later in debate ---

[Guto Bebb (Aberconwy) (Con)]

I am grateful to have the opportunity to bring a Welsh perspective to this debate. The hon. Member for Streatham (Mr Umunna) is no longer in his place, but I must say that his speech was much more coherent than the Opposition’s motion.

When considering economic growth across the entire United Kingdom, it is important to remember that there is a Labour Government in Wales, and we can compare and contrast what is happening in Wales with the positive steps the coalition Government are taking in supporting enterprise and private sector growth. Businesses in Wales are crying out for the enterprise zone idea to be implemented in Wales, yet we are still awaiting a coherent announcement from the Welsh Assembly. We in Wales have a Labour Minister for enterprise and the economy who has stated that she regrets capitalism. It is therefore no surprise that the Institute of Directors and other organisations have stated they feel that there is no partnership with the Labour Assembly Government and that Labour rejects, rather than embraces, the private sector.

[Steve Rotheram]

Does the hon. Gentleman not understand that there is a symbiotic relationship between the public and private sectors? If we cut one, the other bleeds. What is needed at present is a transfusion for the private sector, which is part of Labour’s five-point plan.

[Guto Bebb]

If what we are seeing in Wales is an example of Labour economic thinking, I am very pleased that it is in opposition in the rest of the United Kingdom. The truth of the matter is that the Labour party in Wales has shown across the generations a failure to understand the importance of supporting enterprise.