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Work Programme (Wales)

My hon. Friend will be leading the next Iceland or marketing or whatever it is. We heard from my hon. Friend the Member for Wrexham about the tremendous importance of manufacturing industry and how Labour has fostered new industries, how we have helped the car industry through the scrappage scheme and how we have developed skills. I must pay absolute credit to him, because he has done an enormous amount of work to establish the university here. It can be done. People can help their areas. MPs can help, but we need strong Government policies. The hon. Member for Carmarthen West and South Pembrokeshire, who was a bit greedy with his time, considering that there were several other people waiting to speak, seemed to me to be extremely muddled. One minute he wants Government intervention and lower VAT on tourism and the next he does not want people to learn how to manage golf courses. One minute he wants infrastructure investment, he wants broadband, mobile phones and electrification; the next minute he seems to be decrying any Government attempt to do anything at all and wants a laissez-faire approach. There is a lot of muddled thinking there. I want to move on to mention briefly one or two points that have not yet been made as clearly and as fully as I would like. We appreciate the good intentions of the Work programme, which like its predecessors—Labour’s flexible new deal and pathways to work—recognises that people need help and support to get a job, particularly if they have been out of work for a long time. For those who are able to work, work should offer the best chances for people to improve their lot. This programme has some shortcomings, which I will return to later, but even the best work programmes can only work if the Government’s fiscal and economic policies create the right conditions to safeguard existing jobs and create new job opportunities through growth. With the effects of the Government’s current policies on the job market in Wales, those who have endured long periods of worklessness will find themselves way back in the queue for jobs behind experienced people with up-to-date skills who have recently been made redundant. They will be behind enthusiastic well-qualified young people, who are eager to become economically independent and who are taking jobs for which they are over-qualified. They will be behind people who are going after a few extra hours or a second job to try to make ends meet as inflation rockets while wages are frozen. They will also be behind women of a certain age in their 50s who are hanging on to jobs because their entitlement to a state pension has been delayed by the Government. The latest unemployment figures are shocking —a massive increase of 16,000 in Wales, bringing the total to 131,000. As we look round our constituencies, we see people losing their jobs because of the Government’s savage cuts to public services, which impact disproportionately on Wales. We see people losing their jobs because the private firms that have thrived on public procurement are seeing their order books empty. We see people losing their jobs in the private sector because consumer confidence is low and demand is down. You just need to look at our high streets and town centres to see shops closing, including both big household names and local businesses—T J Hughes here in Wrexham to name but one. If the Work programme is going to work and if people are going to have a chance to get a job, the Government need to get their act together and get a growth strategy now, before it is too late. Now, before any more firms go bust. Now, before any more shops on our high streets close. Now, before any more families suffer the scourge of unemployment. We see nothing from the Secretary of State for Wales and her Cabinet colleagues that will stimulate consumer confidence and demand. On the contrary, we see the shameless coalition Government hike VAT up to 20% in spite of the fact that, just before election in April 2010, both Conservatives and Liberal Democrats were vigorously denying any intention to increase it. The Lib Dems were parading about with their Tory VAT bombshell poster, and the right hon. Member for Tatton (Mr Osborne) was telling us that the Conservatives had no plans to increase VAT. The right hon. Member for Witney (Mr Cameron), when he was leader of the Opposition, described VAT as a very regressive tax, which hits the poorest hardest. We see nothing from the Government that will release the finance for growth. On the contrary, time after time, we hear of successful, viable businesses unable to get the finance they need to expand. That is the message that the Flintshire businesses gave me last night, and I had the same message on Monday from Vertec in Bala. Indeed, we hear from the Governor of the Bank of England that lending to companies has continued to fall. The Federation of Small Businesses has described the Government’s abysmal attempts at a growth strategy as ““too timid and out of touch with the reality of the UK’s sluggish economy””. Indeed, right back in July, the British Chambers of Commerce said that the Government’s deficit reduction plan was ““already dampening demand and adding significantly to the pressures facing businesses and individuals.”” It called on the Government to strengthen their efforts to stimulate growth. Did the Government listen then? No. Are the Government listening now? No. We do not see the long-term strategies and certainty that firms need to be able to invest. We do not see certainty about future energy strategy or energy pricing—far from it. Far from the certainty and consistency that companies need to be able to invest, we see the Government moving the goalposts on feed-in tariffs, so that firms such as Sharp, which has a solar panel factory here in Wrexham that expanded on the basis of a clear commitment to feed-in tariffs from the then Labour Government, have been subject to a year of confusion and uncertainty. In the meantime, the Tory-Lib Dem coalition Government have been dithering around and then deliberately choosing to reduce demand for solar panels by restricting eligibility for feed-in tariffs to micro-scale projects. Far from coming forward with policies to encourage our energy-intensive industries to invest for the future here in Wales, the Chancellor totally ignored the consultation responses from companies such as Tata and set the carbon floor price too high. All we are getting now is shilly-shallying about some possible help package for energy-intensive industries, with a very real danger that it will be too little, too late, and that such industries will be driven out. The super-tax on manufacturing makes the UK uncompetitive even compared to our European neighbours, it is no surprise that such companies are going. We have serious concerns about the Work programme, as do the Work and Pensions Committee, the Social Market Foundation and, indeed, the Tory peer Lady Stedman-Scott. The programme will help fewer people than the previous Government’s programme did; that is what the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell, actually told the Committee. We had some 800,000 people in programmes in 2009-10, but the current programme will only take on board some 600,000 people. There is a 25% cut in funding, compared with previous programmes, and the Social Market Foundation questions the viability of the scheme and whether the providers will actually be able to deliver. There are also delays in getting people on to the programme. Only last week, the Employment Related Services Association pointed out that the backlog of work capability assessments to be conducted by Atos means that fewer people are actually being referred to the programme. The Tory peer Lady Stedman-Scott has said that under the Work programme, commercial firms will not take on the hard to help, and that most of the specialist charities that could help such people did not win any of the Work programme contracts. The Work programme is supposed to be funded from future benefit savings, but the benefit bill is rising as unemployment rises. It will continue to rise relentlessly if the Government stubbornly persist in refusing to develop a growth strategy. The Secretary of State for Business, Innovation and Skills admitted today that we may well be in for a double-dip recession. With that spectre hanging over us, I call on the Government parties to act now; take responsibility for their decision to cut too far, too fast, which has crushed our economy; and work out what they need to do to get our economy growing again in Wales. If the Government do not know what to do, let me explain to them again Labour’s five-point plan for jobs and growth. Let me tell them what they could be doing: introducing a £2-billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 more affordable homes; bringing forward long-term investment projects in schools, roads and transport to get people back to work and strengthen our economy; temporarily reversing January’s damaging VAT rise, to provide immediate help for our high streets and for struggling families and pensioners; making a one-year cut to 5% VAT on home improvements, repairs and maintenance to help home owners and small businesses; and implementing a one-year national insurance tax break for every small firm that takes on extra workers, which would help small businesses to grow and create jobs. Before Government Members ask where the money will come from, they should remember that their policies have generated an additional £46-billion deficit. If the Government want to avoid condemning the people of Wales to a repeat of the 1980s, and want to give the Work programme a chance of success, they must act now to get the economy growing here in Wales.