Jobs and the Unemployed

Debate between Yvette Cooper and Naomi Long

Wednesday 7th July 2010 Commons Chamber

[Yvette Cooper]

I can say very clearly to the right hon. Gentleman that my view was always that it would be unacceptable to increase benefits in line with CPI. I wish to make that very clear, and I am sure that papers will testify to that effect. It will be unfair on people such as those who are severely disabled or on the lowest incomes, who will see the real value of their support cut by hundreds of pounds over the next few years. For the Minister to try to defend the Budget as “progressive” when it will hit people who are severely disabled and cannot work, people who are on carer’s allowance and some of the most vulnerable people in the country who may be struggling to support their families, is a distortion of the meaning of the word.

Welfare to work does not work anywhere in the country if there is no work for people to go to. That is the real tragedy of this new Government. At a time when growth is fragile and too many people are out of work, they have introduced a Budget that cuts growth and jobs. It is shocking.

Even on the assumptions of the Government’s own appointees in the Office for Budget Responsibility, this emergency Budget means that there will be more than 100,000 fewer jobs in the economy, and not just this year. There will be fewer jobs every year for the lifetime of the Parliament as a result of the Budget. The Budget cuts consumption, through the VAT hike and benefit cuts; it cuts Government spending; and it hits private and public sector jobs. The Budget will also push up the bills of unemployment. Even on the optimistic assumptions of the Office for Budget Responsibility, the taxpayer will fork out around £2 billion on unemployment over the course of this Parliament as a result of the Budget. That is £2 billion that we could have spent on the future jobs funds, school buildings or other support to help people into work.

[Naomi Long (Belfast East) (Alliance)]

Does the right hon. Lady agree that that is merely the thin end of the wedge? Many of the young people who find themselves unemployed and many of the communities where unemployment is ingrained are also more reliant on other benefits and public services such as health. The mental health and well-being implications for those communities are enormous, but they have not been factored into those calculations.

[Yvette Cooper]

The hon. Lady is right. We are having this discussion in the light of the Budget measures and the initial cuts in support for jobs, but we know that there are spending cuts to come as part of the spending review, to which the Government have added £17 billion to the amount to be cut from Departments. The consequence is that the Government’s policies will keep more people on the dole, not fewer, and more people out of work, not fewer. That is what the Budget does, and that is on an optimistic reading, because we know that the Treasury’s real assessment is worse.

The only reason why the Government think that employment will be growing at all is that they are counting on around 2.5 million net jobs being created in the private sector over the next five years. However, that is something that John Philpott of the Chartered Institute of Personnel and Development and other respected economists have said is simply unrealistic. The Government are living in cloud cuckoo land. In fact, the Financial Times survey of major private sector employers found that none was planning to increase recruitment on a large scale just because the public sector was cutting back. Arriva said:

“We are not planning a recruitment drive any time soon. Everybody is watching their costs at the moment.”

Today’s KPMG survey found that the number of new recruits is at a seven-month low, just at a time when it should be increasing. Business confidence has been hit by the Budget and the austerity approach that the Government have been pursuing.

The Government have abolished the regional development agencies, which were supporting jobs in the regions, and cut Building Schools for the Future and other capital projects that were supporting construction jobs. The Government are hitting jobs in the public sector and the private sector, all at a time when the economy is still weak. They say that this is unavoidable, but that is simply untrue. They do not need to cut £40 billion extra from the economy; they have chosen to do so, even though that will cut jobs and hurt the unemployed. The Government do not need to cut the help for the unemployed that is getting them into jobs; they have chosen to do so, even though it will increase long-term unemployment. They do not need to push up the costs of unemployment; they have chosen to do so, even though that will cost us more. They do not need to scar young people for years to come; they have chosen to do so, just as they did in the ’80s and ’90s.

Why are the Government doing that? It is because they say that they have to get the deficit down. Why are they introducing a savage Budget to cut the number of jobs in the economy? They say that that has to be done because of the scale on which they want to get the deficit down and the pace at which they want to do it. In the 1990s, the Conservatives said that unemployment was a price worth paying to get inflation down. Now they are saying that unemployment is a price worth paying to get the deficit down. However, unemployment is not a price worth paying; unemployment will stop the deficit coming down. This year’s school leavers will pay the price, our young people will pay the price, and we will all pay the price for many years to come. Unemployment is not a price worth paying. It is time that the Government ditched the failed ideology of the 1980s and the 1930s, and supported jobs for the future. That is what our party will do, and I commend the motion to the House.