Budget Resolutions and Economic Situation

Part of Amendment of the Law – in the House of Commons at 3:37 pm on 22 March 2007.

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Photo of Kevan Jones Kevan Jones Labour, North Durham 3:37, 22 March 2007

There are a record number of jobs in the economy. There is a hard core that we have to tackle; I have it in my constituency. It will take time and effort to get to people who have been written off and consigned to incapacity benefit, for example. I agree with the hon. Member for Sevenoaks that that is a challenge that we cannot ignore. In an ever-developing world, it is important to get record levels of employment higher and to ensure that we get the most out of the individuals in our economy.

Youth unemployment used to be a scourge in many areas. My constituency is not an inner-city constituency; I have often described it as a rural constituency with urban problems. It has pockets of high deprivation in former mining communities whose economic reason for existence has gone. Since 1997, youth unemployment in my constituency is down by more than 90 per cent.—I will return to the issue of 16 and 17-year-olds who are out of education and unemployed, which was tackled in the Budget—and long-term unemployment is down by more than 65 per cent.

The Government have achieved that not by waving a magic wand but by trying to reward work. The Budget increased the working tax credit threshold by £1,200. I welcome that. The gloom and doom merchants complain about how the tax credits system has been administered. The Paymaster General, who is on the Front Bench at the moment, knows that I have not been uncritical of the way in which her Department has administered the system, causing hardship to some of my constituents. However, we should look at the bigger picture and think about the support that it has given to many families in my constituency, where it is making a real difference.

This Labour Government must be proud of the national minimum wage. During the 1997 general election, when I was a trade union official, the Conservatives told us that it would create mass unemployment and be bad for the economy. It has done exactly the opposite. It has helped to raise people out of poverty and removed the absolute disgrace, in a decent society, of people working for £1.50 an hour or less. There was the famous occasion when a security guard at a jobcentre was being paid £1.50 an hour and had to bring his own dog to guard the premises. We have a proud record on employment, which we should not stop championing.

Is everything perfect? No, it is not, and the test for the Government now is to help those in every constituency, including mine, who have been on long-term incapacity benefit and need assistance to get into work. The change since 1997 is that jobcentres are not trying to get people into any job, at any cost, just to manipulate the figures downwards. For example, Stanley jobcentre in my constituency has dedicated workers who advise clients and support people, who often have serious health issues, into work. There are those who say that people are being forced into work who should not be, but it is good for a lot of those people to access work and to gain the place in the world to which I have referred.

Yesterday's Budget also reflected our proud record on pensions and pensioners. It is repeatedly pointed out to me that those pensioners who were the poorest in 1997 are now better off than they have ever been, certainly in my constituency. For example, Annie Bell from Waldridge, who unfortunately died last year at 85 years of age, had campaigned for a free bus pass all her life. When we announced the free bus pass for pensioners, she said to me, "Kevan, this will change my life." More importantly, because she was on a basic state pension and had no savings, she had never been better off. At her funeral, her daughter said that the last few years of her life had been changed by the fact that she was not scrimping and saving and suffering poverty in old age.

There are some, however, who have worked hard throughout their lives to have small occupational pensions and are then hammered by income tax. I am therefore glad that the increase in the income tax threshold was announced yesterday. The announcement that, from April 2011, those over 65 years of age will pay no tax on income under £10,000 will also be welcomed.

We should also be proud of the protection that we have offered to those hard-working people who have paid into pension schemes and lost their pensions through no fault of their own. That is a credit to the campaigning work of my hon. Friend Kevin Brennan, now sitting in silence as a Whip on the Front Bench, who highlighted the issue when he was a Back Bencher. The extension of the financial assistance scheme yesterday from £2 billion to £8 billion will support those who have lost their pensions through no fault of their own. I listened to someone say on television last night that that was not good enough. Well, it is a damn sight better than we have had in the past, and the Government have recognised the injustice done to those people. That and the Pension Protection Fund will provide a safety net that will rightly protect such people from poverty in old age.

On health, the hon. Member for West Suffolk asked where all the money had gone, as though some great black hole or vacuum were sucking it all in. I shall tell him where it has gone in my constituency, which I accept is very different from his. When I was elected in 2001, it was a disgrace that the Chester-le-Street district hospital was a former workhouse, over 100 years old, had leaking roofs and damp carpets, and had had no investment for many years from the Conservative Government. At the Dryburn hospital, where some members of the present Prime Minister's family were born, the maternity unit was in portakabins in the hospital grounds. We now have two brand new hospitals. Next year a brand new mental health hospital will open just over the border in the City of Durham. Four new doctors' surgeries will be built in my constituency in the next two years. A brand new £11 million health centre is coming to Stanley, replacing outdated surgeries.