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Unemployment

It is a great pleasure to follow my hon. Friend the Member for Bexleyheath and Crayford (Mr. Evennett). Members on both sides of the House have spoken about the recession's impact on employment in their respective constituencies and parts of the world. Indeed, the downturn has probably affected Wales and Welsh employment more severely than any other part of the country. In Wales, 100,000 people are now unemployed—some 7 per cent. of the economically active population, compared with the rate for the whole of the UK of 6.3 per cent. In the time available to me, I wish to draw the House's attention to two principal issues—the slow delivery of Government initiatives and the impact of the downturn on the building industry. The construction industry is of particular importance to north Wales. Traditionally, it has been a major employer, and a number of major regional builders have their headquarters there. The downturn has had its effect, however. Redrow Construction of Ewloe, for example, announced the loss of 350 jobs last year, and David McLean Holdings, another major employer, went into administration with the loss of 134 jobs. This pattern is being replicated on a smaller scale across the whole of north Wales. Many small builders are no longer building, not because they do not wish to do so—and not even, ironically, because of a lack of demand for their houses—but in many cases because they are simply unable to access funding from their banks. The principal of Beech Developments, a building firm in my constituency, tells me that he is anxious to begin to develop a site near Colwyn Bay over which he has an option. His company has been in existence for more than 12 years, has never operated on an overdraft, and has an exemplary credit history. Mr. Lee approached his bank, with which he has done business for very many years, but was told that it was impossible for him to obtain a loan to develop the site, because the bank had a blanket policy of not lending to builders. In fact, he was told that, because of that policy, it was not even worth approaching his bank's head office. Since then, Mr. Lee has approached several other banks and financial institutions, including Finance Wales, but none has been willing to provide him with the finance he needs. Consequently, that development will not take place, with the loss of 30 skilled jobs on a project that would have lasted at least two years. That pattern is being repeated up and down the country. Skilled building workers are unable to find work because the banks—in many cases, the banks that have received Government support—are operating a blanket policy of refusing to finance building projects. The construction industry is a major engine of the economy, and if that engine seizes, the upturn will be a very long time coming. The banks are clearly concerned about assessing property values and about saleability. However, the problem could be addressed if the Government were seriously to consider a properly funded national loan guarantee scheme, which the Conservative party has proposed, properly funded, to the tune of some £50 billion. The Government have their own scheme, which the Secretary of State for Business, Enterprise and Regulatory Reform unveiled last January. It is a far less ambitious proposal, worth only some £10 billion. Worse still, however, is the fact that the scheme has not yet been implemented. The Minister with responsibility for small businesses, Baroness Vadera, referred some time ago—somewhat optimistically, many thought—to perceiving signs of the green shoots of recovery in the economy. However, companies that are attempting to throw out green shoots in the current hostile landscape are finding that they are withering because of a lack of Government support. In truth, until the building industry gets going again, the economy will not get going either, and the prospects for employment in areas such as north Wales will be all the worse. The Government have adopted the slogan "Real help now", but the truth is that they are providing the vague promise of the potential of some help at some indeterminate period in the future. Initiative after initiative has been announced, but not yet implemented. A further example is the "golden hello" announced by the Secretary of State in January. We were told that it would provide an incentive of up to £2,500 for employers to recruit and train people who have been unemployed for more than six months. I should like to give a practical example of someone who was credulous enough to assume that the policy was up and running. A constituent of mine, Ms Jan Ross, the principal of Merrall-Ross International Ltd, a company that provides professional indexing services, decided that she would try to take up the offer. She found the experience most frustrating. Last week, I received an e-mail from her, which I think is worth reading:""I am the MD of a company based in North Wales and actually wish to recruit some new staff! I noted Gordon Brown's announcement of 12th January detailing 'golden hellos' for employers recruiting new staff. They seem to be elusive! I have tried the local Jobcentre Plus, the regional Jobcentre Plus, and they have tried a national Jobcentre office. I have e-mailed…the Department of Work and Pensions, the Treasury, phoned the Welsh Assembly, but alas no-one knows anything about it. Please can you take up my query and see if this was just pure hype by the Government or whether there is some substance to the announcement. What are the criteria and how does one go about obtaining help? We are a small SME, but growing, but need all the help we can get!"" My research reveals that the scheme that was announced those two long months ago is still not up and running, but that it might be in operation some time in April. I hope that the Minister who replies to the debate will indicate whether the scheme still exists, whether it is to be implemented, and—most importantly, from the perspective of Ms Ross and others like her—when that is to happen. Or is this a case not of real help now, but of jam tomorrow, or possibly the day after? No one can deny that the problems besetting the country are worrying in the extreme. Hundreds of thousands of people right across the country live in constant fear of redundancy. No one can pretend, either, that the Government can possibly have all the answers, but the Government can help. Frankly, what they ought to be doing is not just promising again and again to introduce initiatives, but delivering real help. It is all very well for them to come up with rafts of new announcements and to unveil new initiatives, but if those measures are never implemented, they are worse than useless. They are cruelly raising the hopes of people who are already in a state of huge despair about their future. Those people need more than the promise of "real help". They need the substance, too.