The Economy

Part of the debate – in the House of Commons at 2:07 pm on 24th October 2019.

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Photo of Pat McFadden Pat McFadden Labour, Wolverhampton South East 2:07 pm, 24th October 2019

Every month, Ministers stand at that Dispatch Box and boast about the unemployment figures—we heard some of it from the Chancellor today. They pat themselves on the back and tell themselves how well they are doing, but there are parts of the country where this boasting sounds like something from another planet. Figures from the House of Commons Library show that, last month in my constituency, there were 4,020 people unemployed. That is higher than a year ago, and higher than July of this year. This is the figure that takes account of the roll-out of universal credit. Although unemployment may be stable or falling in some parts of the country, in my constituency and others like it the figures have been going up month on month for a long time. Unemployment at these levels gives my constituency a jobless rate of around 9%—more than double the national average. Of those 4,000 people, we have more than 700 unemployed young people. This is a criminal waste of talent and an appalling denial of opportunity for those affected and their families.

For those who are in work, pay is much lower than average. Full-time workers in my constituency earn around £100 a week less than the national average. People are working hard and trying to do the right thing, but they are not getting the rewards that they deserve. No wonder people feel that the system is not working for them when their chances of getting a job are lower than average, and the pay they get when they do get a job is also lower than average. We need an economy that works for every part of the country, not just some of it, but right now we do not have that.

The pattern of low pay and high unemployment is reinforced by the number of adults of working age with no formal qualifications. But look at what is happening with skills funding. According to the Education Policy Institute, real-terms spending per student in the further education sector has fallen by 18% in the last nine years. The IFS estimates that there was a cut of £3.3 billion in real terms across the whole further education and skills budget between 2010 and last year. In my region, apprenticeship starts have fallen by 9,000 in the past year. Instead of funding a platform for opportunity at the very moment that people need help, the Government have kicked the ladder away. How can we give people the best possible chance in life if the funding for the organisations that equip them for the jobs of today and tomorrow is being cut? Yet that is precisely what this Government have done.

On top of all that, the Government are now committed to cuts in corporation tax, which will cost the Exchequer billions of pounds a year. That money could be used to support working-class communities across the country. My constituency has already suffered from benefit freezes and tax credit cuts, which hurt low-income families. We have also faced cuts to police numbers, and schools—which can barely make ends meet—are doing their best and struggling heroically to help local children. If we really want to help working-class communities, we need a proper long-term plan for the smaller cities and towns, which for too long have been left out of economic prosperity. We need something that really tackles the long-term legacy of industrial closures in years gone by, and gives those areas a new and prosperous future.

A couple of months ago, I published a proposal with the think-tank Global Future to take the money that the Government are proposing to give away through the planned cuts in corporation tax, and instead to use that money to create a long-term fund for smaller cities and towns. Not going ahead with these proposed tax cuts—without raising a penny in tax anywhere else—would give us a fund of £4 billion to £5 billion a year; just think what we could do with that over a 10-year period. We could really invest in the childcare essential to help young parents take up jobs and boost their incomes. We could reclaim the land that is still derelict as a result of industrial closures, and get it fit for housing again. We could give those adults who do not have enough qualifications the chance to succeed in the labour market of today. We could build a platform where we did something about the two-speed nature of our economy—a bridge between the areas already doing well and those struggling with the legacy of high unemployment, low income and low skills. That is the kind of plan we need for the future, and it is sadly missing from this Queen’s Speech.