Amendment of the Law

Alex Cunningham Excerpts

Tuesday 29th March 2011 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

Like others, my speech will focus on people. The number of unemployed claimants in my constituency is now 3,812, which is 9.2%. In the north-east of England, despite the progress made over the past 12 years in diversifying our industrial and business base, we still have the highest rate of unemployment in the whole country, at 10.2%. Even more worrying is the fact that 23% of our 16 to 24-year-olds are out of work. It is against that backdrop that I want to speak today.

The worst of the cuts are yet to come. Thousands of public and private sector workers are set to lose their jobs, and the cuts are being front-loaded, leaving local authorities with no choice but to make quick savings by making staff redundant. My own very efficient local authority, Stockton borough council, is faced with having to make savings of £29 million over the next four years. The Chancellor is effectively throwing hundreds of thousands of people out of work, but he is passing the axe to the local authorities and leaving them to do the chopping.

Let us not forget that recent analysis published by the TUC found that there were almost 10 applicants for every vacancy in Labour-held constituencies. The figure in Tory constituencies was 4.5, and in Liberal Democrat areas, it was 6.1. That is because the cuts are hitting the poorest communities the hardest. Recent research into the impact of the cuts reveals that all but two of the 20 worst-hit councils are in the bottom 20% most deprived council areas in England. It cannot be fair that low and middle-income neighbourhoods should carry the heaviest burden because of the Government’s choices.

We are told that there is no alternative, but there is a choice being made by the Government to cut far too fast. Under Labour, the economy was heading in the right direction. It was growing at 1.2% when Labour left office. In the last quarter of 2010, however, it had shrunk by 0.6%. So, under this Tory-led Government, growth has gone down last year and this year, and it will go down next year. The Chancellor blames the poor economic performance on the wrong type of snow, yet Germany and the US suffered from similar Arctic conditions last winter and their growth figures are not so grim.

Inflation is up, and unemployment is up. It is becoming increasingly clear that the Tory-led Government’s plan for the economy is, yes, hurting but not working. Yet we are repeatedly told that there is no plan B. What we have instead is a real-life economic experiment, and the disgraceful thing is that it is completely politically motivated. The coalition hopes to get the worst of the pain out of the way before the next general election. What an irresponsible way to deal with our economy, and with people’s jobs and lives.

What is the Government’s response to this bleak outlook? We have had the announcement of the local enterprise partnerships, but with no money. The Budget announced 21 enterprise zones, including one in the Tees valley. I hope that both those projects flourish and create much-needed new jobs, but the reality is that their funding is a fraction of the funding that was available for regional growth through the now abolished regional development agencies.

What are the Government doing to address the fact that almost 1 million 16 to 24-year-olds are out of work today, the vast majority of whom are desperate for a job to kick-start their adult lives? The budget announced just 40,000 two-month work experience placements a year, and an extra 12,500 apprenticeships a year. That will not deal with the tip of the iceberg. I fear that there will be a lost generation, which will cost this country a great deal, economically and socially, in the years to come if we do not tackle the problem head on. The Government’s Work programme also gives me cause for concern. Every person who receives incapacity benefits is to get a medical reassessment, and huge numbers face being moved on to the jobseeker’s allowance, losing a third of their payments, if they are found to be fit enough to work. Many of them might not be.

As a member of the Work and Pensions Select Committee, I recently visited Burnley, where we spoke to people who had been part of a pilot for these assessments, and some of the stories we heard were very worrying. The test has been severely criticised by groups such as Citizens Advice and some argue that it is not fit for purpose. I look forward to the Committee’s further inquiry into that matter.

Clearly, the proof will be in the pudding, but even if these people are moved on to jobseeker’s allowance and are able to get the comprehensive support they will need to make them job-ready, they then face finding work in a tough environment, competing against people who might recently have been made redundant and against all those young people for fewer and fewer jobs. This will be tough enough in Tory constituencies, never mind those like my own in Stockton North and throughout the north-east. The Government need to think again about providing realistic incentives to create jobs and help people back to work, while still protecting the most vulnerable.

The real spending cuts are only just starting to hit people. My real fear is that we are facing a jobless recovery. This would be a disaster for Teesside and the north-east, which, as I have already said, suffers from the highest unemployment rate in the whole country. The Government must do much better.