Unemployment (North-east)

Tom Blenkinsop Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Wright]

My hon. Friend is right. I will come to the terrible issue of youth unemployment in a moment. Let me just mention further unwanted, gloomy news on the jobs front in recent months.

The closure of the Rio Tinto Alcan plant, with the loss of 515 jobs directly and the threat to 3,000 jobs in the supply chain, is a major blow to the economy of south-east Northumberland. My hon. Friend the Member for Blyth Valley (Mr Campbell) is in attendance and I have spoken to my hon. Friend the Member for Wansbeck (Ian Lavery) today, who wanted to attend, but is hoping to catch Mr Speaker’s eye in the debate on Remploy.

The closure of the BAe factory on Scotswood road in the constituency of my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) brings to an end a century of remarkable industrial innovation on the banks of the Tyne. The factory was started by that astonishing, underrated Victorian entrepreneur, William Armstrong. However, far from looking to the past, the closure undermines the vital links between British military capability and manufacturing and industrial capacity.

The growth in long-term unemployment and youth unemployment is of particular concern. I have mentioned that to hon. Friends. The north-east has far too often been permanently scarred by people being on the dole for many months and years, or by young people leaving school or college unable to find work. That was so in the 1980s, when the closure of the steelworks, shipyards and coal mines left an unwanted and enduring legacy of poor health, lower life expectancy, poverty and family breakdown, making it more difficult for the economy to bounce back into prosperity once the recovery starts.

The longer a person is out of work, the easier it is for them to lose skills and experience, and the more difficult it is to get back into work. That is especially true when more and more people have more recently lost their jobs, and therefore have more recent experience in the job market.

In Hartlepool, the number of people who have been claiming JSA for more than 12 months has risen in the past year by more than 245%. One in four young men under the age of 24 are out of work in Hartlepool. Such figures are not sustainable economically, socially or ethically. I fear that we are repeating the policies and mistakes of the 1980s and that there will, once again, be a lost generation of young people unable to fulfil their massive potential, believing that the only way they can get a proper career is by leaving the north-east altogether.

We have had good news. Only this week a new retailer announced the creation of 150 jobs in Hartlepool, but overall the job situation is gloomy and set to get worse. The Centre for Economics and Business Research forecasts that unemployment in the north-east will rise to 12% this year and to 13% by 2016, largely as a result of further and deeper public sector redundancies.

Government policy is making the unemployment situation in the north-east much worse. The Government’s insistence that public sector redundancies are necessary and that private sector employment will somehow bloom in the face of these cuts is naive and economically ignorant at best, or is cynically and deliberately driven for ideological and political purposes. If Ministers—or Whips—genuinely believe that the public and private sectors are separate and distinct entities, and never the twain shall meet, that shows a profound misunderstanding of how the modern economy works.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My hon. Friend makes a compelling argument. In my area of the north-east, in Teesside and East Cleveland, three areas worry me: cuts in Army, Navy and Royal Air Force troop numbers—mine is a big recruitment area for them—the three-year zenith in the contraction of manufacturing, which affects the north-east more than other regions, and public sector cuts.

As my hon. Friend just mentioned, the Government’s ideological view that there is a private sector and a public sector goes against every piece of economics since Galbraith in the 1960s and undermines any economic recovery that we have desperately fought for.

[Mr Wright]

My hon. Friend is right. I know that he remembers Galbraith in the ’60s.

Some 84,000 jobs have been lost in the construction industry, in part due to stopping the schools building programme, road schemes and social housing, which were all socially and economically necessary, because they boost productivity, efficiency and economic capability in the long term and, in the short term, in the worst and most severe global financial crisis ever, help to provide skills and capacity in the construction sector.

The Government fail to accept the basic economic point that, for every £1 of public money spent on construction activities, almost £3 of private sector money is generated back into the local economy, in terms of jobs, the supply chain and construction.