Jobs and the Unemployed

Nick Smith Excerpts

Wednesday 7th July 2010 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

I want to talk about jobs in south Wales, and the future jobs fund in particular. I do not believe the Government’s Budget will help boost employment in my constituency and in Wales. Instead, there is a great danger of the Budget reducing growth and increasing unemployment. Jobs are important in Blaenau Gwent. My constituency has the high unemployment rate of almost 12%. We used to rely on coal and steel, but those days are gone; now we need to develop a more balanced economy. We need green jobs, digital jobs and better services. We need to help those who have been unemployed back into work. We need the future jobs fund or a similar employment initiative, and, most importantly, we need it now.

Before I elaborate on my argument, however, I want to talk about an important event that took place in Blaenau Gwent last week. On Monday 28 June we commemorated the 50th anniversary of the Six Bells mining disaster. That commemoration was a tremendous event; thousands were there, including many relatives of the men killed that day. I met a Mrs Evans, a former senior nursing officer of the National Coal Board in Wales, who said that, apart from Aberfan, helping attend to the bodies taken from the pit that night was the worst evening of her career. Wayne Thomas, secretary of the south Wales National Union of Mineworkers told me that the wonderful steel and stone memorial is the biggest mines memorial in the country. I encourage Members to visit the Six Bells memorial, as it is a terrific reminder of the importance of coal and how it has sometimes left a tragic mark on our communities. It is a wonderful, evocative and powerful piece of art, and it is also a reminder that while coal is still part of the south Wales valleys, it will never again be the big employer it once was.

I had hoped that the Minister would talk today about policy plans that I would have found encouraging for Blaenau Gwent, but I have been disappointed by what I have heard. For me, the Government’s plans must include those that will deliver the programme. While Ministers have been quick to attack the future jobs fund, many important lessons have been learned from that project. That is certainly the case in Blaenau Gwent: that important initiative has been managed by our borough council and it has led to our streets being cleaner, our environment being cleaned up and our youngsters being kept out of trouble. Furthermore, the local people given work include redundant workers, those who find it hard to keep down a job and young teenage mums and dads. All those are groups that I would hope the Government would want to support back into employment and, in Blaenau Gwent, more than 500 people have, or will have, benefited from this initiative in recent months.

I must also say that I believe the Government have made a big mistake with their austerity Budget. At this difficult time, a better judgment would be to recognise that the best way to boost employment is to grow the economy, not cut it back. In south Wales, it is likely that the Government will find that the private sector is too weak to pick up the slack after Con-Dem cuts in the public sector. In the Financial Times last Wednesday it was reported that the private sector is not ready to employ the hundreds of thousands of public sector workers likely to be laid off as a result of Budget cuts. There was a study of 12 companies employing more than 375,000 people in various sectors, including household names like Morrisons, Jaguar, the Co-op and Arriva, and those companies said they had no plans to grow as the state shrinks.

Several companies have said that the financial situation is still too uncertain to consider recruiting. Experts such as Tim Leunig of the London School of Economics believe the economy is too frail for the private sector to grow and absorb jobs in the way it has in the past. That fatally undermines the Government’s argument. Mr Leunig has said:

“If the government thinks the private sector is automatically going to step into the gap left by the public sector, it is sadly mistaken.”

While there may be regional growth in the south-east, and the home counties may prosper early as we come out of recession, we need investment in Wales through the Assembly Government and local councils. We do not need a hope-and-a-prayer policy that somehow assumes the private sector will ride to the rescue, as all our experience in recent years has been that that will not happen.

I understand that the Government’s programme is not set to start until next summer. Also, it appears to include no guarantees that everyone will get work or training regardless of how hard to help they may be. Given what we know so far, it seems that this is an untested experiment on a large scale and carries considerable risk to the country and constituencies such as mine.

All this compares badly with Labour’s employment record. There are about half the number of young people signing on now than in the recessions under the Tories. Long-term youth unemployment is under a third of what it was when Labour came into office. Furthermore, because of Labour’s welfare reforms, investment in child care and family-friendly working policies, 365,000 more lone parents are in work now than in 1997. That good and important record will be undermined by the Government’s Budget.

Losing the future jobs fund is a mistake. It looks as though it will be followed by another initiative in the medium term, but in the meantime we will lose important momentum and delivery, and hundreds, if not thousands, of people will miss out. The Government should listen now to the agencies that are doing the hard yards on job delivery. The indications are that employment growth in the economy is still in the balance and that there is a real danger of much higher unemployment in the months ahead. I am grateful that the Under-Secretary of State for Wales has agreed to come to Blaenau Gwent in the coming months to talk about employment. That is generous of him, but if he is to make good on the Prime Minister’s recent fine words about this fantastic work programme, he has much to deliver on. In the meantime, some very good work and much good will is being squandered.