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Economic Downturn (Unemployment)

I welcome you to the Chair, Mr. Key. It was the view of the Select Committee that we should, as our first investigation, look at the economy of the south-west. We felt that it would be helpful to consider also the economic background to our region to enable us to understand the challenges that stem from the present economic crisis. It is important to remember where we started from as a region and to acknowledge the underlying strengths of our regional economy, and also to look at the areas where we have been hit hardest. The south-west has historically been one of the strongest areas of growth in the nation, with lower than average unemployment and rapidly increasing rates of productivity. There is a lot to be proud of across the region, and the evidence that the Committee heard supported that. Between 2001 and 2006, the economy in the south-west grew at a rate of 5.7 per cent. per annum, which is well above the national average. Job growth has also been above average, with an increase of 19 per cent. between 1993 and 2007 against a national increase of 15 per cent. Clearly, that position has changed, and I will come on to that later in my speech. There is a perception that the region can be broadly split into two sub-regions in economic terms—a sub-debate, if I can reuse the term that we have already had today. Historically, we have a prosperous north, including Swindon, which is 50 per cent. more productive than the UK average—or it was until the recent recession—and a southern half, which includes Cornwall and the Isles of Scilly, in which the economic development has been aided through European Union objective 1 funding. The south-west is one of the regions in which benefits of European Union membership can be most clearly seen. Central Government support has been focused through the South West Regional Development Agency, which has, according to a report issued this March by the then Department for Business, Enterprise and Regulatory Reform, created and safeguarded 25,000 jobs and assisted 22,500 businesses, as well as supporting entrepreneurial growth of small businesses, which is something that the region has not been particularly good at. However, all of us here are only too aware, and we are reminded of this at our constituency surgeries, that the economy is not as healthy as it once was, and the progress that I have just described is under threat. Unemployment in the south-west has increased and, while still lower than in some regions, what we have seen—and what the Select Committee report highlighted—is the well-above average percentage increases in the numbers of unemployed. Regionally, we have seen an increase of 139 per cent. of those on jobseeker’s allowance, compared with 89 per cent. nationally. Swindon has the dubious record of a 227 per cent. increase in people going through Jobcentre Plus. The problems posed by the downturn have been highlighted by a number of support networks in their evidence to the Committee. The citizens advice bureau indicated that the average number of inquiries relating to redundancy were up by 118 per cent. The whole issue of the capacity of those support networks was raised by the hon. Member for Northavon. We also listened to evidence from trade unions, which confirmed concerns about job losses but highlighted the benefits of the ongoing training programme, working with employers and the support given by the Government, particularly through Train to Gain. The Committee felt that there were concerns, however, that the Train to Gain programme needed to be continually funded in order to retain its capacity. During the course of our inquiry we also heard from leaders of local authorities, representatives from the SWRDA, the TUC, the CBI and the Federation of Small Businesses on the impact of the economic crisis in the south-west. Those sessions were tremendously useful to help build up an overview of the region and to hear, in a way that is not always possible when looking at each constituency individually, just how the downturn was affecting the wider south-west. I would urge Opposition Members to make representations to their party leaders so that they can take part in the meetings and so that their constituents and region are better represented. I would like to put on record my thanks to my Labour party colleagues who contributed objectively, in a wholly unbiased way, towards the production of the report. I commend them for their hard work. I would also like to express concern that the hon. Member for North Wiltshire and others seem to know nothing about this, when in fact I have written to every single MP in the south-west, as Chair of the Select Committee, inviting them to participate—perhaps not in a party political way, but on behalf of constituents—and contribute to the Committee’s evidence sessions.