Business and the Economy

John Hemming Excerpts

Monday 14th May 2012 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

I start by repeating something that I raised in an intervention with the Secretary of State at the outset. He repeated the oft-made claim about the number of private sector jobs that are being created in order to prove that the Government’s policy is working. In about January 2011, after just over six months in government, the Prime Minister told us that 500,000 new private sector jobs had been created by his Government. After another few months, he said that in the first year of his Government they had created 500,000 jobs. Now the Secretary of State tells us that in two years they have created 600,000 jobs. Presumably, if the 500,000 figure was correct in the first place, only 100,000 have been created in the last 18 months. At that rate of job creation, we will expect the next 18 months to give us about another 20,000 jobs. They cannot keep repeating the same jobs. The key fact here is that that 500,000, the Prime Minister’s original boast, was largely the result of the economic stimuli applied by the outgoing Labour Government. In other words, this Government have done virtually nothing to create private sector jobs, despite all their claims—claims that were repeated again today—that the public sector was crowding out the private sector and that was the problem.

I am not, on the whole, the kind of person who goes in for the Armageddon-like language that one sometimes hears on the left. In fact, I am usually irritated by it; language such as, “We are all going to hell in a handbasket” and “People will be walking in the streets without shoes.” Actually, I am beginning to wonder. At my surgery on Friday, two people came who had both been recently sanctioned as a result of disputed issues about non-attendance at the Work programme. Neither qualified for hardship payments because they do not have dependants. The only thing their local citizens advice bureau could tell them to do in the short term was to go to a food bank.

I did some research on food banks. The Trussell Trust, which many talk about as being a wonderful charity, on its website says that in 2011-12 food banks fed 128,687 people nationwide—100% more than in the previous year. It has more than 200 food banks nationally and it hopes to have one in every town. I do not think I am overly naive, but in my lifetime I thought that this sort of thing was history. I represented an area as a councillor for 16 years, which included a district that ticked all the deprivation indices boxes, and I do not recall a constituent telling me that they had had to resort to a food bank. The only food provision that I was aware of in Edinburgh then was some vans for the street homeless, but not for people who had simply found themselves unemployed.

It must give us food for thought that one of the most rapidly growing charities in our country is one providing food banks. That is not a criticism of the charity or those who volunteer for it; I am sure that they are doing an important job, which is obviously necessary. But what should make us angry is that there is a need for that.

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

Will the hon. Lady accept that the Trussell Trust was set up with food banks in the first Blair Government?

[Sheila Gilmore]

I am not saying it was not set up then. I am giving its own information that in the year 2011-12, it increased the number of people it was helping by 100%.

One of those constituents has been sanctioned for six months. Unless she succeeds in an appeal shortly, she will not get jobseeker’s allowance until November this year. She has very little family support for circumstances in her life. Do any of us sitting here have any concept of what it is like to feel that they will have no income for that length of time? I do not think that we have any concept of what that must feel like. I have also to ask, as she does seem to have certain health and personal problems, what has happened to all the boasts about the Work programme. The Work programme was going to be so personalised. Edinburgh MPs were taken in by one of the providers and told that they would have health professionals and counsellors who would help people with complex needs. I am afraid that it does not appear to have helped that particular constituent. Someone like that is collateral damage from a Government who frequently talk as though the problem that faces this country is that there are too many people on out-of-work benefits, as if their obduracy or the fact that benefits are somehow too high is causing the economy to flatline.

Only this weekend a Scots business man, Tom Hunter, was widely quoted as saying that Scots were addicted to welfare. He had just returned from China, where the economy is booming, and explained that the biggest worry there is that people in China might suddenly decide that they wanted high levels of welfare. I find that fairly incredible. I cannot really picture the situation—Tom Hunter and, presumably, a Chinese business man discussing how the biggest threat to China’s economy is welfare—but that is what he tells us.

Apparently, it is not just workers who are not working hard enough; now their employers are not working hard enough either. We know that some of those employers are sitting on capital, but why do they not want to invest it? For those running businesses, surely the major reason why they do not want to invest their capital and earn more money is that there is no demand for their products or services. If there is no demand, we have a big problem. Simon Jenkins, writing in The Guardian on 9 May, stated:

“Europe’s collective response to the 2008 credit crunch ranks with the treaty of Versailles and German reparations among the great follies of history… Those who warned at the time that the coalition risked double-dip recession by over-suppressing demand have been proved right.”

What is the solution? Simon Jenkins, like the Opposition, thinks that the British economy needs three things: demand, demand and demand. It needs cash in pockets and cash in tills. It needs the old Keynesian salve: money in circulation. That is what our plan is about: cutting VAT, removing the cuts to tax credits in order to put money back in people’s pockets, reducing the rate of VAT on home improvements, and all those housing proposals that my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) explained so eloquently. If we put that investment into housing, we would not only give badly needed homes to the people who need them, but create the jobs that would boost demand in local economies. That is what we need to do, and there is no excuse for not doing it. In Edinburgh we have the land and the planning consents; we just need the funding.