Grim shadow of rising unemployment hangs over the hopes of my home town

As Britain teeters on the brink on a double dip recession, and the Government clamps down on welfare payments, a Parliamentary debate considered the ramifications for a Yorkshire town on the economic front line. Here a Labour MP and a Liberal Democrat Minister reflect on the state of Halifax.

LINDA RIORDAN - Labour MP for Halifax

I GREW up in Halifax and went to school there. It is a great place in which to live and work. No one wants to be out of work, but sadly far too many people are.

People do not want handouts but the chance to do a good day’s work for a good day’s wage. People do not want to live in – and I do not want to represent – a town where levels of unemployment might be at 15 or 20 per cent.

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Even if the possibility of 20 per cent unemployment in Halifax sounds a little exaggerated, that is sadly where we could be heading unless something radical is done to get people back into work.

For many years, jobs in Halifax and Calderdale came from a number of industries that sadly are either no more, or are shadows of their former selves – I am talking about engineering, manufacturing and, going further back, the woollen industries.

Today, the two biggest employers are the Lloyds Banking Group – better known to most local people as either the Halifax building society or HBOS – and Calderdale council. Other key employees include the hospital in Calderdale and the primary care trust, and other public sector employers.

Well-run private companies, such as J&C Joel in Sowerby Bridge, Harveys department store or Iplas recycling group in the heart of Halifax, together with many more small companies, provide much needed employment and are key businesses in my constituency. They are models of how to make a profit, provide employment and maintain a dedicated and motivated work force.

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Over the years, Halifax has relied on specific sectors to provide employment, but when those sectors declined, a vacuum was created.

In Halifax, it has never been enough to rely on private sector jobs to fill the void that is created when public sector jobs are lost. The town needs much more than that, which is why regeneration schemes, investment in new schools and the new hospital, together with a strong public sector and the right macro-economic policies, have helped maintain levels of employment.

Current levels of unemployment are unacceptably high. For example, the number of people out of work aged 24 and under has gone up by more than 25 per cent in the last year, and in the 25-to-49 age group, it is up by more than 15 per cent. The overall employment rate is only 66 per cent. That is an alarmingly low level. One in four of the active adult population out of work in Halifax is a damning statistic.

Look at the statistics from five years ago. The unemployment level in Halifax has nearly doubled in that period. Despite the stereotyping of benefit claimants, they are people who want to work and need to work. The whole social fabric of a town can collapse if unemployment levels get too high.

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Let me be clear: I think that one person out of work is one too many.

The current situation is fragile, and the campaign to save jobs in the town’s two biggest employers – Lloyds HBOS and Calderdale Council – goes on.

The knock-on effects for the town of more job losses at those two big employers would be devastating. As Roger Harvey of Harveys department store regularly says to me: “Many town centre businesses need and rely on these jobs.”

In that sense, every effort should be being made to protect all jobs at Lloyds HBOS. The Government owns more than 40 per cent of that company.

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Calderdale Council is at the heart of the Halifax and Calderdale economy. The reductions in council budgets are hurting the town. Again, towns in the Home Counties and other parts of the country can better absorb public sector job losses.

When there is a private sector, or towns have grown up with more service-based industries, new jobs can be created much more easily. In northern towns such as Halifax, which have always had a strong and important public sector, that is much harder to do.

I do not want to knock everything. There are success stories. I recently visited the Iplas recycling company. The managing director, Howard Waghorn, has visionary and innovative ideas for his company. Likewise, the order book of J&C Joel in Sowerby Bridge continues to expand.

However, those are well-run, long-established companies. The new industries and entrepreneurs with innovative ideas needed for the 21st century will not appear in towns such as Halifax simply through the waving of a magic wand and hoping that new jobs are created.

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I do not want to pretend that everything in Halifax is gloomy. It is not. We need to keep our self-confidence and hope.

STEVE WEBB - Liberal Democrat MP and Minister of State at the Department of Work and Pensions

I ENTIRELY agree with Linda Riordan that one person unemployed is too many and that the rise in unemployment in Halifax and other towns is absolutely a source of concern. She said that something must be done, and I entirely agree.

To set the context, for claimants of jobseeker’s allowance, the national average rate is just under four per cent. The figure for Yorkshire and Humberside is 4.6 per cent but the figure for Halifax is 6.4 per cent.

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Part of the Government’s strategy is to move away from some of the schemes that unemployed people have faced in the past.

She and I will both have met people who were sent on a scheme by the Jobcentre and came away from it thinking: “What was the point of that?” It did not help them to get a job, yet the provider of the scheme got paid and went home happy.

We want to change that. We want to move, and are moving, towards a system whereby the companies that we pay to help people from unemployment, from incapacity benefit and so on into work get paid only when they deliver.

The whole philosophy behind the Work programme, which is still gearing up across the country and gathering momentum, is that the providers get paid only when they get people into jobs and, specifically, when they get people into sustained jobs.

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The bulk of the money is end-loaded. They get very little money up front, and if they do not deliver for the people of Halifax, they do not get paid. That is a sea change from the sort of schemes that we have had in the past.

We want to make sure that there is not a core of people in Halifax who have just lost touch with the labour market. The longer such people are out of touch, the less chance they have of getting a job. We need to get them back in contact with the labour market.

We want the people who have been on long-term benefits, particularly incapacity benefit and jobseeker’s allowance, to be effective competitors for jobs. We know that jobs are being created and that vacancies will exist.

We will shortly be launching the Green Investment Bank, which will provide money specifically for new enterprises and growth industries. This is not just about London and the south-east; it cannot be.

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We have a Regional Growth Fund that specifically helps areas that are dependent on the public sector to make the transition to a better balance between public and private. There will always be an important role for the public sector in her area, but there is no reason on earth why, with the right support, Halifax should not have a thriving private sector as well.

Let me give one example of the incentives that we are giving. New businesses outside London and the south-east will be exempted from up to £5,000 of employer national insurance contributions for each of the first 10 employees they hire. That is a concrete and practical thing. We are also using deregulation as a way to help small businesses.

I also agree that unemployment is devastating for anybody, but at the start of somebody’s working life, it is a particular tragedy.

That is why I am pleased with what the Government has been able to do on the apprenticeships front

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However I have had a look at some of the figures for Halifax, and the number of people who have been on out-of-work incapacity benefits for the last decade in Halifax.

What struck me was how the number had not moved. For 10 years, despite the booms and the busts, there was the same number of people – obviously not all of them are the same people but many are – stuck on the list.

I entirely take the point that we should not stigmatise or parody the position of people on benefits. Although many people are on benefits through no fault of their own, we have allowed ourselves to get to a situation in Halifax and in many other such towns in which nearly 5,000 people have consistently been on ESA or incapacity benefit for the last 10 years.

The question is: are we doing right by those people? Many of them will be in their 50s. If we just left them alone because there are not many jobs, we would be saying: “You can be on incapacity benefit for another 10 years and then you can have a pension, but it won’t be much of a pension because you haven’t been working.”

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We can do better than that, which is why we are keen to have these Work programme providers incentivised to help the long-term sick and disabled to overcome the barriers to work which get greater the longer people are out of work.