Opportunities for the Next Generation

John Hemming Excerpts

Tuesday 13th September 2011 Commons Chamber

[Mr Willetts]

The crucial difference between our economy and those that the hon. Gentleman listed is that our economy has the benefit of a credible package for bringing down the public deficit, as a result of which the markets have retained confidence in us. It is because of this Government’s economic policies that we are not facing the same risks.

[John Hemming (Birmingham, Yardley) (LD)]

Does it not surprise the Minister, as it surprises me, that the Opposition seem to be unconcerned about the rate of interest paid and the fact that, as a deficit goes up, the rate of interest goes up as well?

[Mr Willetts]

That is a very important point; indeed, I understand that with its latest debt issue the Bank of England has secured historically low—almost unprecedentedly low—interest rates, which is further evidence of the confidence that people have in our seriousness about tackling the deficit that we inherited from the previous Government.

I now want to make progress on some of the specific points in the motion that the shadow Secretary of State put before us. First, let me focus briefly on youth unemployment and those not in education, employment or training. Youth unemployment is a serious problem; it does need to be tackled, and of course we regret the fact that it now stands at 949,000, having been at 924,000 when we took office. However, as we have heard, when Labour took office it was at 664,000, and the rise in youth unemployment began long before the economic crisis hit.

The really serious question that parties on both sides of the House need to address is why, even during Labour’s boom years, was youth unemployment already starting to rise. That tells us that it is a deep-seated trend, which tells us that something has gone seriously wrong with our education and training system—it was not meeting employers’ needs.

--- Later in debate ---

[John Hemming (Birmingham, Yardley) (LD)]

Sometimes, I think that there is a tendency in politics to focus too much on trying to avoid tripping over the hurdles in front of us. We do not look at the horizon and see where we are going in the long term. Rather than focusing on the minute issues about the immediate policy and the motion—I oppose the motion and support Government policy—I should like to consider the longer-term issues.

It was rather sad to hear the hon. Member for Islwyn (Chris Evans) criticise factory work. For my constituents, we try to maintain work at Jaguar Land Rover. Those skilled jobs give people an opportunity in life. My view of work is that people should work to live, not live to work. If people have skilled jobs or have gone to sixth form or university, they can find a house to live in, bring up a family and go on a few holidays. They have some stability in their lives. That is a positive thing to have, and it should not be downgraded as something that society should not aim to have. The hon. Member for Strangford (Jim Shannon) made the valid point that jobs in Tesco are important. I am pleased that a Tesco will soon open in Yardley and provide people with additional jobs.

Within all this, we need security. Young people need such opportunities in the first instance. Let us put aside party politics for a moment and look at what has happened over the past 20 or 30 years. Technology has improved things in one sense—obviously, we can do a lot more with fewer people—but we do not need so many people to do what we do. The hon. Member for West Bromwich West (Mr Bailey) said that there are perhaps 1 million jobs short in the west midlands. Obviously, some people are now in education who would previously have been in work. Considering 50% growth is a thought experiment; it will not suddenly magic up massive employment. We need to consider what is happening in other countries. Rather than focusing on a relatively small number of people working many hours a week, trying to put everything together so that they can afford to buy a property, perhaps our long-term aim should be that people need not necessarily work so many hours and that the work is shared out.

We have had disadvantages with the benefits system. People have been discouraged from working part time. If they work part time, they do not qualify for benefits such as tax credits and the like. I hope that the universal credit system will enable people to say, “Actually, by balancing out work and life, I don’t necessarily have to work full time.” We could then share out the work and have greater numbers of people contributing to society and fewer people being described as NEETs. I do not like using acronyms to describe people. Perhaps people’s finances might not be so good, but if more people were in work but not necessarily working so many hours, they would have a better quality of life.

[Sheila Gilmore]

If people work fewer than 16 hours, they do not get support from tax credits. Under the universal credit system, a ceiling will be placed on people’s incomes. They will not get out of poverty as a result of those proposals.

[John Hemming]

I am trying to move on from just being party political about the next few minutes’ policies. If we want to design a society—okay, I do not believe in centralised state management—we should consider our objectives. If our society is to be one in which a greater proportion of people participate in its operation, we do not need to discourage people from working only two days a week, which is what the hon. Lady was referring to. That issue needs to be looked at.

We cannot just solve things with economic growth. In practice, there are limits to the resources available for growth. As colleagues might be aware, I chair the all-party group on peak oil and gas. Putting aside climate change, there are constraints on the availability of fossil fuels and limits to the extent to which we can increase consumption. When we look at obesity in society—perhaps I am a good example—we should consider whether we need to increase consumption.

There is a wider view. We need to look critically at what we are doing in the long term. In the short term, we have to deal with the deficit; there is no question about that. If we do not, interest rates will go up, and we will end up in a situation similar to that of Greece, or various other countries that face serious financial problems. However, in the long term, our objective has to be a society in which everybody participates; in which we work to live, rather than live to work; and in which we try to involve everyone. We cannot do it with a command-economy approach, but we need to support people in doing what they can and working part time, rather than penalising them for that.

I think that I have, in less than six minutes, managed to make my point, so I leave the Floor to other hon. Members.

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a great pleasure to follow the hon. Member for Birmingham, Yardley (John Hemming), but in general, we have heard a rag-bag of rubbish from Government Members today. Let us think about the big picture: accelerating globalisation; climate change; the ageing of western populations; and the emergence of developing markets, particularly in China and India, that are driving up energy prices, which makes green technologies economical.

In Europe, there is a sovereign debt crisis in the aftermath of a financial crisis, but the UK, after 13 years of Labour Government, is in a pretty strong position. As I pointed out earlier, Iceland, Ireland, Italy, Portugal and Spain are in a much worse position than Britain. Why? It is because Labour had created 2 million extra jobs since 1997. Those people are working, paying tax, and making their way.

Of course, we have a deficit, two thirds of which, as the Institute for Fiscal Studies acknowledged, was created by the bankers. The other third was due to the fact that, in the recession, we invested more than we earned, but there is no apology for that. Yesterday, the Government attempted to say, “Oh well, we’ll sort out the banking crisis,” but their remedy would take eight years. They also acknowledged that they would bail out Lehman Brothers and others, so that was no real solution.

The big choice is in deciding what the balance should be between growth and cuts to get the deficit down, and there is also the issue of timing. We have not heard much about what a growth strategy would look like. We have seen what a cuts strategy looks like; we are living that awful nightmare. What we need in a growth strategy is a strategy for indigenous growth, in which we invest in education, skills, apprenticeships, economic clusters, and an entrepreneurial culture; we have heard some reference to that. We need to build up trade links, which have been savaged by the Government’s disinvestment in regional development agencies, which means that UK Trade & Investment cannot market the UK abroad effectively and get companies to invest in Britain. We need to invest in infrastructure and, in particular, in housing, as is mentioned in the motion, to crank up the economy once again.

We need inward investment, resulting from the effective marketing of Britain—something that has been cut to the bone. We need to create economic conditions of stability and certainty, not just in Britain but across Europe and globally, to give business the confidence to invest. We need to spot the obvious fact that the emerging opportunities are in future markets, not least in China and India. What is the verdict on the Government’s efforts so far? Pretty poor, frankly. Small business is starved of cash from banks. The news of massive cuts in public services means that consumers are saving instead of consuming, so companies are not investing in new jobs. In construction, things are almost as dead as a door-nail.

On education and skills, Government Front Benchers deny that it is possible to send students to university for £3,000, yet in Wales that is precisely what is happening. A student from Wales will leave university with a debt of £10,000, but in England, it will be £30,000. If there are three children in a family, that is £100,000 in England, versus £30,000 in Wales.

[John Hemming]

Does the hon. Gentleman accept that Wales gets a lot more money per capita through the Barnett formula?