Economic Rebalancing

Mr Peter Hain (Neath) (Lab): On the economy, how does the right hon. Gentleman respond to today’s research by the university of Oxford and the London School of Hygiene and Tropical Medicine that only a fifth of claimants who have had their benefits sanctioned and then taken away have found work? Surely this will not rebalance the economy or make it stronger, let alone make it just, and it is diabolically punitive.

Stephen Crabb: I have not seen that report so I am not going to get drawn into commenting on the specifics, but I have seen the latest figures for the performance of the Work programme in Wales, which should give us encouragement that we have a set of measures in place that is helping to bring down long-term unemployment.

Mr Hain indicated dissent.

Youth Unemployment Wales

Mr Peter Hain (Neath) (Lab): Given that the future of businesses in Wales depends on the vibrancy of our young workers, is the right hon. Gentleman encouraged by the fact that the Welsh Government’s policies are clearly working, in that the youth unemployment rate has come down faster and further than anywhere else in the United Kingdom? Will he be less churlish towards the Welsh Government and praise the jobs growth fund and that achievement?

Mr Jones: Far from being churlish, I commend Jobs Growth Wales for making an important contribution. Having said that, it is a limited contribution, and the important thing is for the Welsh Government to work closely with the Department for Work and Pensions to ensure that we can drive down even further the unemployment rates.

Welfare Reform, Sick & Disabled People

Mr Peter Hain (Neath) (Lab): How can the Government justify removing all phone lines to local jobcentres such as the one in Neath? How are people, especially disabled and sick people, supposed to cope with the fiendishly complex benefits system, or get into jobs, without personalised help and advice? Does the Minister not understand that the most vulnerable people often cannot get online, afford costly daily travel to jobcentres or hang on for ages on expensive 0845 lines?

Mike Penning: The 0845 numbers came in when the right hon. Gentleman was a Minister, and we are eradicating them now. Advisers are in place all the time. Most work is done online these days, but the advisers are there to help people, which is why we have been so successful in getting people into work.

Hain blasts Government in wake of ‘dismal’ unemployment figures

Neath MP Peter Hain has challenged the Government in the strongest possible terms following the release of the latest unemployment figures for his constituency, which show a significant rise in the number of people out of work.

According to Mr Hain, ‘The Government’s approach is utterly failing local people. Not only is there no economic growth to stimulate the local economy, people who are already struggling to make ends meet due to a lack of full-time jobs are also feeling the pressure of the cuts to both their wages and to their tax credits.’

There are currently 1679 people in Neath claiming Job Seeker’s Allowance. Of these, 340 people have been claiming JSA for up to twelve months, which is a 6% rise on the year.

Commenting further, Mr Hain says, ‘I find the 14% rise in the number of young people aged 18-24 claiming JSA for over twelve months particularly worrying. It is a daunting prospect for school-leavers and graduates who deserve a better future than the stagnant job market which is all that this Tory-led Government has to offer them.’

‘Whilst Tory Lib-Dem Ministers sit on their hands and dither about innovative projects such as the Severn Barrage, which would bring a wealth of jobs to the Neath Port Talbot area, local people continue to suffer. Urgent action is needed now before the Government condemns a whole generation to joblessness.’

Underemployment Is A Major Problem

Western Mail,

Despite Government claims to have ‘record’ levels of employment and to have ‘created one million private sector jobs’ the reality is very different for far too many people.

There are huge numbers of ‘underemployed’ who want to work more hours but cannot.

The Prime Minister and Chancellor repeatedly boast that in the past quarter UK employment reached a ‘record’ 29.7 million. No context, no nuance: instead a cynical use of a very misleading figure.

Leaving aside that there is a real crisis of youth unemployment and that real wages have been falling, there are more people of working-age now than there were pre-recession. Consequently, as a proportion of this working age population, the employment total is well below any figure achieved under Labour during the pre-banking crisis period from 1997-2008.

Next the ‘million new private sector jobs’ aren’t what they seem. Apart from the 520,000 jobs lost in the public-sector, fully a fifth of those ‘new’ private-sector jobs were magically created by reclassifying lecturers at sixth form colleges as private sector rather than public sector.

But the ultimate Government fiddle of employment data is the great underemployment cover-up. Surveys show that over one million part time workers in Britain want to go full time but employers cannot afford to offer them more shifts or hours.

In other words Britain is facing an underemployment crisis where employers cannot afford to pay employees for enough hours to guarantee their subsistence, especially if they have dependents.

In Wales 2005-2008 (pre-recession) there were, on average, 86,000 underemployed workers, representing a fairly standard underemployment rate of 6.5 per cent of the working age population.

But in the last three years, 2009-2012, there were an average of 134,000 underemployed workers in Wales, an underemployment rate of 10.3 per cent – nearly half as much again as the standard rate – and an increase of 48,000.

So one in 10 Welsh workers are being thwarted from working as much as they wish – often thwarted from bringing themselves above the benefits threshold. There simply are no extra hours in the Welsh economy for people to work the fuller week they want to.

The situation is of particular pressing concern to young workers, already penalized by flagship government cuts in England to Educational Maintenance Allowance and Housing Benefit; one in every five young people in the UK aged 16-24 out of education are what the TUC describe as is ‘involuntarily unemployed’.

Involuntarily, not because they don’t want to work, but because they want more work – the very young people penalised and branded as lazy and work-shy because they take what remaining benefits they can to remain afloat in low-paid part-time jobs.

Women, too, are disproportionally hit, being more likely anyway to face underemployment, at a rate which has risen even faster than for men since the banking crisis. One in eight women are involuntarily unemployed, some forced into taking fewer shifts by sky-rocketing childcare costs and a flood of men entering the part-time work market that had previously been women-dominated.

Furthermore, how are they supposed to compete in a labour market already saturated and against hundreds of youngsters between the ages of 16 and 24 who every week are demoralised by being rejected as both ‘over qualified’ and ‘under experienced’?

Underemployed workers earn on average £7.49 an hour which is £3 less than the average hourly pay for a full-time employee. Underpay can therefore be added to the list of social malaises brought on by this government’s misguided and punitive policies. Where in all of this is the ‘pathway out of poverty’ Cameron and Osborne repeatedly tout?

And what of the welfare savings the government is currently pushing for? Underemployment means people need tax credits and other benefits to stay afloat, directly costing the government money that could otherwise be spent on desperately needed job creation policies. Instead they allow people to flounder at tax payers’ expense and then demonise and harass them for their dependency.

It is true that job creation is expensive and that public investment will be needed, increasing borrowing in the short term in order to cut borrowing in the future by getting people into work at decent wages so they pay taxes instead of drawing benefits.

Rising underemployment in Wales and across the UK is another symptom of the Government’s economic failure which is strangling growth and causing a flat lining economy. The social cost is very high and so is debt, the deficit and borrowing – the very targets the Government was so determined to bring down.

It is high time we had a growth not a cuts policy.