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Economic Inactivity

Volume 503: debated on Wednesday 6 January 2010

4. What recent discussions he has had with the Secretary of State for Work and Pensions on the level of economic inactivity in Wales.

Because of the actions my right hon. Friend the Secretary of State for Work and Pensions and the Government have taken to preserve jobs and get people back to work, the level of economic inactivity in Wales fell by 3,000 from the last quarter. We will not let short-term job losses turn into long-term unemployment. We will not allow Welsh communities to be scarred by worklessness again.

I am grateful for that answer. The Secretary of State recently said in the Welsh Grand Committee that unemployment in Wales may well keep rising for some time during 2010. Has he made any estimate of the level at which he thinks unemployment may peak during this recession?

What has been interesting is that all the commentators are now saying that unemployment will peak at a far lower level than has been said by the Opposition and was previously feared. We have now seen economic activity rates in Wales down 3,000; jobseeker’s allowance and claimant count figures down 500; vacancies up 2,000; and unemployment still up 93,000 in Wales on what we inherited from the miserable Conservative Government last time.

My local authority of Cynon, Rhondda and Taff is particularly pleased with the future jobs fund and the impact it is having on employment in the Cynon valley. Will my right hon. Friend assure me that the Government will continue to protect those who are out of work—unlike the Conservative party in the 1980s, which threw people on the scrapheap?

Again, my Back-Bench colleagues are eloquent in their denunciation of failed policies on the other side of the House.

Well, they would be because they represent Welsh seats that were devastated by Tory policies in the 1980s and 1990s when the number of people on incapacity benefit in constituencies such as that of my right hon. Friend the Member for Cynon Valley (Ann Clwyd) and mine tripled. It has been coming down under Labour. My right hon. Friend is absolutely right that we have seen active Government intervention, spending and investing over the past two years—continuing into the future—rather than a Government who will slash spending and condemn people to losing jobs, bankrupting businesses, plunging Britain and Wales into exactly the same cycle of decline and depression from which we rescued Britain and Wales when we came to power in 1997.

In the Witney constituency of the Leader of the Opposition, 10 claimants are chasing every vacancy. In the Rhondda, 75 claimants are chasing every vacancy, while in Neath it is 35. Will the Secretary of State press his colleague in the Department for Work and Pensions to modulate the pressure on claimants to find work, reflecting local conditions such as those I mentioned? To do otherwise, I think, would be both impractical and inhumane.

I take the hon. Gentleman’s point, and if he has any concrete examples, I would be happy to take them up with my right hon. Friend the Secretary of State for Work and Pensions. The hon. Gentleman will understand the imperative of encouraging people to stay in the world of work. If, sadly, people have been made unemployed, what we are doing, which was not done in the 1980s and 1990s, is to provide them with job opportunities, training and support so that when vacancies arise—there are more and more of them in the Welsh economy generally— they can take that opportunity locally. About half the claimants leave jobseeker’s allowance within three months and more than 70 per cent. within six months—a far better record than in the miserable Tory 1980s and 1990s.

Does my right hon. Friend agree that the growth in the manufacturing industry that was noted in the purchasing managers index survey published on Monday will be good news for Wales, bearing in mind our above-average dependency on manufacturing industry? Does he not think that that will help to bring down the level of economic inactivity?

I do indeed. No one is suggesting that this recession has been anything other than extremely difficult for businesses and for those whose jobs have been under threat, but my hon. Friend is absolutely right: the latest PMI index report shows that private sector growth in Wales increased in November for the seventh successive month. Manufacturing is up, and employment rose for the first time in two years. Wales was the only UK region to record job creation during November, and the latest figures show that the growth in exports from Wales since 1999 was greater than in all the rest of the UK put together. That is a good record under Labour.

Perhaps the Secretary of State will take off his rose-tinted glasses. Under Labour, more than 100,000 more people are economically inactive in Wales than the entire population of Cardiff. In the past year, the number of long-term unemployed has more than doubled. Welsh gross value added has gone backwards compared with the rest of the UK, and Wales is the poorest part of the country. What effect does the Secretary of State think that that is having on the social fabric of Wales?

The difference between this, the deepest recession that Britain has faced in generations, and the much lighter recessions that the Tory Governments completely failed to deal with in the 1980s and 1990s in Wales is that people are now being helped out of difficulty and the economy is starting to recover. It is recovering much more quickly than people expected, and much more quickly than the doom merchants on the Conservative Benches who have been talking Wales down have been saying it would. That is because we have adopted active government policies to invest in jobs and support businesses, rather than turning our backs on businesses as was done in the Tory 1980s and 1990s.

I do not live in the 1980s; I live now. Given the importance of employment in agriculture, is the Secretary of State concerned that under Labour, gross value added per capita for Welsh agriculture has fallen by more than 68 per cent., or more than two thirds? This shocking decline is worse than in any other part of the United Kingdom. Is it not a fact that the legacy of Labour in Wales will be more unemployment, more poverty, more debt and a devastated rural economy?

The problem is that hundreds of thousands of people in Wales had to live in the 1980s and 1990s under a Tory Government. That is why we are determined to prevent the Tories from inflicting such misery on them again. The hon. Lady does not acknowledge that there are now 93,000 more jobs in Wales than when we followed the Tories into power, despite this being the most difficult recession for 60 years. That is a record of Labour success against Tory failure.