Business and the Economy

Baroness Primarolo Excerpts

Monday 14th May 2012 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

This Government have no vision: no vision for a better future for our country; no vision to deliver economic growth; and certainly no vision to create jobs. We saw that in the Budget, and we certainly saw it in the Queen’s Speech last week. With some 3 million people unemployed, including 1 million young people, that isn’t good enough. We are wasting talent, drive and ambition simply because the Prime Minister and Chancellor cannot admit that their plans are not working. It is not good enough for the people in my constituency, who are losing their jobs left, right and centre, while at the same time the Government are giving tax breaks of over £40,000 a year to millionaires. It is not good enough for the millions of people across the country who are working so hard to make ends meet and need a Government who will stand up and work for them. Instead, they have a Government who seem happy to leave them behind and to cast aside their hopes and aspirations.

We are now officially back in recession—something many knew was coming and about which the Labour party has been warning the Government for two years. It is the double-dip recession the Government promised would not happen. Under Labour, the country had started to move out of recession, and progress was being made in creating jobs through programmes such as the future jobs fund and apprenticeships with job guarantees. Now youth unemployment alone is up 7.7% on last year, to more than 1 million. That equates to an extra 73,000 young people who want to work but cannot find the jobs they so desperately need. Also, more than 700,000 public sector jobs will be lost by 2017, with little or no sign that the private sector will be able to absorb those people.

These are tough times to be unemployed. With rising energy and food prices and the benefit changes coming this year, this Government are hurting families, young people, pensioners and public servants—to name just a few—and penalising or demonising those who cannot find work in a labour market that this Conservative-led Government are doing nothing to grow.

That is particularly apparent in places such as my constituency, which has high levels of deprivation, including one of the highest levels of child poverty in the country. The consequences of the Government’s failure on the economy are much more keenly felt in such places. Unemployment in Bethnal Green and Bow stands at almost 12%, which is well above the national average, and youth unemployment is over 9%. I frequently meet parents who are astounded that their university-educated children cannot find jobs, so I echo the point made by my hon. Friend the Member for Huddersfield (Mr Sheerman) about rising graduate unemployment. It is scandalous that even though they have such qualifications, this Government are doing nothing to support them into work.

When I speak to local business owners—the businesses that are at the heart of our local economy and employ thousands of people—they tell me how hard it is to make ends meet given the Government’s VAT rises, which have stifled their potential. In my constituency, the VAT increases are hitting sectors such as technology, the creative industries and restaurants particularly hard. The Government’s failure to do anything substantial to enable them to borrow is also hurting them hard. We need a plan to support small businesses; I echo the comments made by many Opposition Members about the need to support small businesses in order to encourage and enable the economy to grow. SMEs will be a vital part of that story.

We also need programmes to help people into work—programmes that help them develop their skills and thus enable them to compete in today’s labour market. The massive difference such programmes can make in constituencies such as mine is illustrated by the work of, for example, Job Ready hosted by Futureversity, Skillsmatch, the East London Business Alliance, the Adab Trust and City Gateway, a charity in my constituency. Such groups are working very hard, but they are suffering as a result of the impact on charities of the Budget’s tax measures. We must support organisations that develop soft skills and provide training for young people to get into work, but such organisations are being hit hard by this Government’s measures.

My constituents need this Government to step up and take action to address the very real, everyday problems they face. We need to create real jobs for young people, not enforced work programmes that do not offer any chance of employment at the end. Labour promised to introduce a tax on bank bonuses to deliver these jobs—real jobs, with real wages for our young people, who are trying so hard to find work.

This Government have no vision to create jobs and to foster economic growth. Now is the time we need a Government with the vision and aspiration to take radical and ambitious actions, yet that is precisely what is lacking. We need a Government to work for the majority of this country, not a small minority—not the 1% who will gain from tax breaks. I hope this—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Time is up. I call Esther McVey.

--- Later in debate ---

[Duncan Hames (Chippenham) (LD)]

I generally support the hon. Gentleman’s observations on House of Lords reform, but does he agree that one lesson of constitutional reform is that we should not allow the best to be the enemy of the good, and that we should not take an all-or-nothing attitude?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I remind Members that they are not supposed to face the back of the Chamber? They are supposed to address the Chamber, and particularly the Chair.

[Martin Vickers]

I take note of what my hon. Friend the Member for Chippenham (Duncan Hames) says and agree with much of it.

As I said, the Queen’s Speech provides an essential framework for the narrative that the Government must put forward. I spoke on Friday to the regeneration director of North East Lincolnshire council, who said that he was reasonably optimistic about the future. I think that is partly due to the fact that the Government have shown confidence in the area by creating enterprise zones, reducing tolls on the Humber bridge, which will bring £150 million into the area, and only last week giving the go-ahead to pre-construction work on the A160 into Immingham docks. That is vital if we are to develop the area for the green economy and the offshore energy industry. The director made the interesting point that the area is not looking for Government grants, but it does need some Government investment in vital infrastructure projects such as those.

I add a caveat about regional pay, which I know my neighbour, my hon. Friend the Member for Brigg and Goole (Andrew Percy), spoke about in his contribution to the debate a few days ago. By coincidence, I was visiting the manager of a Jobcentre Plus on Friday morning at just the moment when my telephone rang, and it was a journalist wanting a comment about regional pay. I have reservations about it, and as the jobcentre manager pointed out to me, organisations in both the public and private sector have to pay premium salaries to attract specialists to the low-pay economy of northern Lincolnshire. I have had experience of that as a councillor.

I conclude by commending the report published today by the all-party group on small business. It highlights the desperate need to create enthusiasm for entrepreneurship among our young people. We go a long way towards that in the Gracious Speech, which I commend to the House.