Skip to main content

Unemployment (North Northamptonshire)

Volume 455: debated on Friday 26 January 2007

Motion made, and Question proposed, That this House do now adjourn.—[Huw Irranca-Davies.]

I am grateful to Mr. Speaker for granting me this Adjournment debate on the worrying trend of increased unemployment in north Northamptonshire, which provides me with the opportunity to put my concerns to the Minister. I thank him for his attendance and I look forward to his response to my concerns and suggestions. He is a fine, fair-minded and able Minister, and I am sure that we will have a constructive debate. I am very pleased that my hon. Friend the Member for Kettering (Mr. Hollobone) is here to give his views to the Minister, if he catches your eye, Mr. Deputy Speaker. He works tirelessly on his constituents’ behalf, and I note that he, too, has grave concerns about the rising level of unemployment in north Northamptonshire.

I should say at the outset that I am not trying to score party political points through this debate; I merely want to highlight the facts to the Minister and urge the Government to take action to reverse the rise in unemployment in north Northamptonshire. In the Wellingborough constituency, unemployment has risen by 19 per cent. since this time last year. Unfortunately, 42 other constituencies in the United Kingdom saw an even greater increase last year. Some 1,536 people in Wellingborough now claim jobseeker’s allowance— 2.8 per cent. more than did so in December 1997. The facts are there, and it is clear that unemployment in Wellingborough is higher now than it was in December 1997. The same is true of 82 other constituencies.

The Labour party’s 1997 election manifesto stated the following:

“We will attack long-term unemployment…Our goal will be educational and employment opportunities for all…Our long-term objective is high and stable levels of employment...Labour’s welfare-to-work programme will attack unemployment and break the spiral of escalating spending on social security…We will co-ordinate benefits, employment and career services, and utilise new technology to improve their quality and efficiency.”

There is nothing in that that I would disagree with. The present Government inherited a healthy and growing economy. As the Chancellor likes to point out at every opportunity, the economy continues to grow. So why do we have rising unemployment in north Northamptonshire? Something has gone wrong somewhere: if a Government have inherited a healthy economy, unemployment should not continue to rise. Labour’s 1997 manifesto promises have not materialised in Wellingborough, for whatever reason. We have a problem, and it is time for the Government to recognise it and do something about it. I am not interested in hearing Government spin and rhetoric on these clear facts; I just want to know why things have gone wrong and what we can all do to reverse this worrying trend.

Of course, there is one clear and major explanation for rising unemployment in Wellingborough—the decline of the manufacturing industry. Northamptonshire has historically been a manufacturing county, and it is that sector that has provided so many of the population’s jobs over the years. Manufacturing industry is, of course, the engine house of the British economy. Without it, there could be no public services—the very public services of which the Government like to boast. None the less, because of the rapid decline in manufacturing jobs under this Government, those jobs are no longer available to the workers of Wellingborough.

In 1991, 32 per cent. of employees’ jobs in Wellingborough were in manufacturing. In 1997, that figure had fallen by only 1 per cent., to 31 per cent. However, by 2005 only 19 per cent. of employees’ jobs were in manufacturing industries in the constituency. That huge decrease has had a knock-on effect on the number of people unemployed and those on jobseeker’s allowance in Wellingborough.

A 40 per cent. reduction in the number of people employed in manufacturing in Wellingborough should be of great concern not only locally but nationally. At the beginning of 2005, the British Chambers of Commerce stated, in response to figures for industrial and manufacturing output produced by the Office for National Statistics:

“The BCC still expects a modest upturn in manufacturing over the next two years. But it is clear that growth will remain totally inadequate. Hopes of manufacturing recovery have so far been bitterly disappointed.”

In December of last year, in response to the October 2006 manufacturing output figures, the BCC stated:

“The manufacturing figures remain weak by historical standards and the recovery is fragile and vulnerable.”

It is clear that manufacturing industry will continue to decline in this country, and will do so even more given the recent increase in interest rates.

The Government need to take manufacturing industry seriously and create an environment in which it can expand rather than contract. One of our problems in Wellingborough is that we do not have many large companies. Instead we have many small to medium-sized companies. When one of those closes down, it causes a faint ripple through the county, but does not appear on the national stage and therefore no major action is taken. But after a series of medium sized companies have closed, the effects gain momentum and have huge implications for employment in the constituency.

Small and medium-sized companies are much more affected by the bureaucracy and red tape of Government regulations than their larger counterparts are. Businesses in my constituency are suffering and failing because they are being strangled by the enormous amount of bureaucracy and red tape imposed on them. Labour’s election promise in 1997 was to cut unnecessary red tape for small businesses, but I am often approached by people with businesses in my constituency that are struggling.

Only this morning I launched my business breakfast forum in my constituency, and yet again local business people came to tell me of the problems that they are having with regulation and bureaucracy. The Government may argue, with some justification, that many of those regulations come from the European Union. However, that argument does not wash, because of the Government’s willingness to do anything that the European Commission wants rather than stand up for the interests of British business. That leads to unemployment in my constituency.

Thanks to the British people, we have stopped the Government taking us into the euro, so we perform much better than many of our European Union colleagues. But because of the Government’s actions, our manufacturing industries cannot stand up against the competitiveness of China and India, and the economy of the United States. We need to look urgently at attracting to north Northamptonshire new labour-rich businesses that will bring with them a wealth of jobs and opportunities.

It has never before been so important to look into the employment situation in the area. That is because of the huge housing expansion that is taking place in north Northamptonshire, which will see 167,000 extra dwellings built in the county by 2016. Many of the plans for the huge increase in housing have been in place for years. However, there is little planning for infrastructure and employment opportunities to support that massive growth.

I run the “Listening to Wellingborough and Rushden” campaign, which seeks the views of local people in regular surveys, forums, meetings and visits. As an MP, I hold well-attended weekly constituency surgeries where I regularly meet constituents who have concerns about unemployment, or who are dissatisfied with the service received from Jobcentre Plus or the local Department for Work and Pensions. Unfortunately, Wellingborough Jobcentre Plus has a performance rating for customer service of only 77.5 per cent., which means that about a quarter of all the people who use the service are dissatisfied. That is unacceptable. I have arranged a meeting with the corporate management team of Wellingborough council and the district manager of Jobcentre Plus to discuss the concerns of my constituents about unemployment and the effectiveness of the service they receive.

Rising unemployment is a big issue for all the authorities in my area and we are all committed to alleviating the problems. Just before the debate, I opened 12 Sheep street, 23,000 sq ft of modern office accommodation. The interesting point about that development is that it was a public-private partnership. Invest Northamptonshire put in half the capital and Ciel Developers put in the other 50 per cent. The development will attract jobs to Wellingborough, but the problem is that Invest Northamptonshire has just found out that the Government have severely cut its budget. We have an initiative in my constituency that will work well, but the funding for it is being cut. Will the Minister comment on that?

I am a little disappointed by the Government’s response to my letters; I felt that it was rather complacent. I want a constructive debate, so I am sure that we shall not hear Government spin on Labour’s employment record in the Minister’s reply. I wanted simply to lay bare to the Minister the facts about what is happening in my constituency.

I have three suggestions to make to the Minister. If he could meet all three, it would help my constituents enormously and reduce unemployment in north Northamptonshire. First, I invite him to visit Wellingborough to see the problems at first hand so that he can be more responsive to the needs of my constituents. Perhaps he could help to organise a multi-agency response to a serious unemployment problem.

Secondly, the employment landscape of Wellingborough has changed. Because of the expansion of house building, we are becoming a commuter town, and are only 50 minutes away from London by rail. The Government often talk about relocating some of their Departments to the regions. Why not bring a Department to Wellingborough? It would create jobs for people living in north Northamptonshire, and the town is only 50 minutes away from London, which must be a major benefit for a Department that is relocating.

Thirdly, I have repeatedly argued for a community hospital in the constituency to cope with the growing needs of the local population. A new hospital would create local jobs, while providing a vital service to the ever-growing population of north Northamptonshire. As Wellingborough is in the worst funded primary care trust in the worst funded strategic health authority in the country, by reference to the national capitation formula, if the Government invest in Wellingborough the money they say that they should invest, we could have such a hospital. I am asking not for more Government expenditure, but for our fair share of Government expenditure.

It is vital that we all work together to encourage new business and industry to come to north Northamptonshire. Now that the expansion programme is under way, this is a perfect time to do that, and I look forward to the Minister’s comments.

I congratulate my hon. Friend the Member for Wellingborough (Mr. Bone) on securing this important debate and I praise him for his tireless work for constituents on so many issues of crucial importance—not least, unemployment. Kettering is next door to Wellingborough and many of the circumstances that my hon. Friend described are also pertinent to my Kettering constituency.

I would like to place on the record the current state of affairs regarding unemployment in Kettering. In December 1997, 1,235 unfortunate people were claiming jobseeker’s allowance, compared with 1,232—a staggering reduction of three—in December 2006. Last year, an extra 219 people found themselves without work, which is a staggering increase of 21.6 per cent.

If we compare Kettering with the other 645 constituencies in the UK in respect of the percentage change in unemployment between December 2005 and December 2006, it was worse in only 21 other constituencies. On the figures since December 1997, the situation was worse in only 83 constituencies. Indeed, there has been an increase in unemployment since 2001. That year there were 781 unemployed people claiming benefit in the Kettering constituency, which has since increased by 451—well above 60 per cent.

The increase in Kettering’s unemployment far outstrips that for the east midlands as a whole, and for Great Britain as a whole. As my hon. Friend the Member for Wellingborough said, the reason for that is the decline in the manufacturing base. In 1997 Kettering had 9,000 manufacturing jobs, compared with just over 7,000 today. Instead of 27 per cent. of the work force being employed in manufacturing, there are now just 17 per cent.

Somehow, constituencies such as Kettering have, unfortunately, been overlooked in the Government’s efforts to tackle unemployment. Although the overall unemployment rate of 2.4 per cent. is low, the shift in the figures over the last five or six years is alarming to many of my constituents. The overwhelming reason for the change is, as my hon. Friend said, the increase in red tape faced by manufacturing businesses in Kettering and also the knock-on effect of the Government’s increase in the rate of national insurance contributions. Although the money may have gone into the national health service, it has also piled on costs for manufacturing and other employers in Kettering.

North Northamptonshire faces a huge challenge over the next 10, 15 or 20 years. The Government want to build 52,100 new houses, but in their plans they allow for only an extra 43,800 new jobs. We already have an unemployment problem, and if the Government are not careful, it will get a lot worse.

I begin by congratulating the hon. Member for Wellingborough (Mr. Bone) on securing the debate and I thank the hon. Member for Kettering (Mr. Hollobone) for his comments. They both spoke up effectively for their constituents. I will address most of my comments to the hon. Member for Wellingborough, who initiated the debate, but much of what I say also applies to Kettering.

The hon. Member for Wellingborough is right to say that unemployment in his constituency has increased recently. On examining the reasons for that, I noticed that over the last year, three companies made substantial lay-offs in his constituency—Carlsberg, Avon and Golden Wonder. None of them comes under the label of traditional manufacturing, however, and I notice that he sought to lay the blame for the increase in unemployment on the decline in manufacturing employment. The situation is more complex than that.

I would like to take this opportunity to undertake a forensic examination of both unemployment and employment in the hon. Gentleman’s constituency. First, let me clear up how things stand now as opposed to May 1997 when this Government came to office. He referred to that in his speech, so I will respond. I know that he had a disagreement with my right hon. Friend the Chancellor of the Exchequer on this issue in the House a short while ago, so here are the facts.

In May 1997, when the Government came to office, the claimant count in Wellingborough was 1,826. Last month, as the hon. Gentleman has said, it was 1,536. I accept that that is an increase over the position a year ago, but I hope that he will also accept that, notwithstanding the recent increase, the claimant count is 290 lower than it was in the month that the Conservative Government left office. It represents a fall of 16 per cent. in his constituency. Furthermore the current claimant count represents 2.4 per cent. of his local work force. That is low by any standards and better than the United Kingdom average. He may be interested to know that the claimant count for the whole of Northamptonshire in May 1997 was 9,522; it is currently 6,886—a fall of 28 per cent.

The hon. Gentleman may also be interested in the wider historical perspective. I should point out that, for most of the 1990-97 period, unemployment in Wellingborough remained stubbornly above 2,000 and, in the depths of the 1992 recession, it was closer to 3,000. That was the second Tory recession. During the first Tory recession in his constituency, the unemployment figure was more than 3,000. I offer the hon. Gentleman all that to put the current situation in context and not in any way to minimise at all the challenge faced by his constituents who are unemployed nor to dismiss the fact that the claimant count in Wellingborough has recently risen. I regret, just as much as he does, the loss of any job by any of his constituents.

In a dynamic economy, even one such as ours which is now in a record period of sustained growth, there will be job losses. Some markets will decline, some firms will close, some will move, some will get taken over and job losses will result. The crucial questions for the hon. Gentleman’s constituents and those in Kettering who may suffer job losses as a result of those trends are as follows. First, will there be another job for them to move to? Secondly, will it take them long to get that other job and, thirdly, if they need help to prepare for getting that job, is that help available? I want to look at those three questions in turn.

The first question is whether there will be another job for the hon. Gentleman’s constituents to move to. The answer is yes. Last year, 4,695 of his constituents registered at some point during the year as unemployed, but 4,425 moved off the register in his constituency in the past year because they had found work. Furthermore, last year, no fewer than 6,300 job vacancies were notified to his local Jobcentre Plus. All that speaks of a dynamic local economy.

The second question his constituents need to have answered is, if they encounter unemployment, will it take them long to find the next job. The answer is that it certainly does not take as long as it used to. If we go back to December 1996, as the hon. Gentleman did, we find that, of the constituents who were then unemployed, 345 experienced unemployment for more than a year. Currently, the number of his constituents waiting more than a year to find a job is 60. He referred in his opening comments to the Labour party’s commitment to eradicate long-term unemployment. As he will see in his constituency, long-term unemployment has declined dramatically. Now, more than two thirds of unemployed people in Wellingborough find a job within six months. Long-term unemployment in Wellingborough has fallen by 73 per cent. since 1997. Long-term youth unemployment has fallen by 52 per cent. Overall, there are now 4,700 more jobs in his constituency than there were in 1997.

The hon. Gentleman will recall that the third question was: is there extra help on hand for those who are seeking another job? The answer is yes. To start with, his constituents have been helped hugely by the new deal. Since it got under way, 2,130 people in Wellingborough have been helped into a job by the new deal, including 860 young people and 980 lone parents. His party opposed the new deal.

There is also additional help. Basic skills support is available right across Northamptonshire. Four regional and two local European social fund contracts are available, targeted at longer-term unemployment. Job preparation courses are available through his local Jobcentre Plus office, supported locally by Wincanton, DTS, Morrisons, Milbury Care, Shaw Health Care and Asda. Work is also being done through the Wellingborough Prosper Group. I know that the local employer engagement manager at Jobcentre Plus has written to him to supply him with further details of local schemes to assist people who are seeking work. Pathways to work is already proving very successful. It will be implemented in his area next year. As he will also know, Wellingborough is part of the Milton Keynes and south midlands growth area, which is forecast to create more than 13,000 further job opportunities by 2021.

The hon. Gentleman and I, and the hon. Member for Kettering, all want to see the claimant count in his area coming down. There is no debate whatsoever about that. For that to happen, the right macro-economic policies must be in place, which they are. We have a stable, growing economy that is creating jobs—2.5 million across the country as a whole so far—and attracting investment. Domestic business investment is strong and foreign investment in the United Kingdom is exceptionally strong. All that helps to deliver increased levels of employment. There is a labour force participation rate of 74.6 per cent., which is one of the highest in the Organisation for Economic Co-operation and Development. That situation is delivering lower levels of unemployment—it has declined in every single region of the United Kingdom. It is also delivering a plentiful supply of job vacancies: there are 600,000. Long-term unemployment is down by three quarters. Long-term youth unemployment is down by two thirds. We also require the right strategy for the future, to build on that stability. That is why we are now aiming at an 80 per cent. labour force participation rate and why welfare reform that is now being implemented will introduce the employment support allowance and the extension of the pathways to work programme.

As with all other hon. Members, including myself, the hon. Gentleman’s task is to work alongside all the key stakeholders in his area to ensure that the strategy locally means that his area is well positioned to take advantage of the strong national economy. There is a key role for his regional development agency, his local Jobcentre Plus office, local authorities, employers, colleges, the Connexions services, and many others. Get all that right and he will find that he can keep a steady flow of new jobs coming into his constituency. That is necessary to absorb the fact that, unfortunately, some of his constituents will from time to time, for a variety of reasons, find that they lose their jobs. If we want to be able to deliver further growth in employment for the future on top of the 4,700 extra jobs that have already come to his constituency since 1997, the crucial thing is to continue with the economic policies that we already have in place.

Question put and agreed to.

Adjourned accordingly at one minute to Three o’clock.