Economically Inactive People

Work and Pensions – in the House of Commons on 31st October 2022.

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Photo of Sally-Ann Hart Sally-Ann Hart Conservative, Hastings and Rye

What steps his Department is taking to help reduce the number of people who are economically inactive.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

What recent assessment he has made of the implications for his policies of the level of economic inactivity in the labour market.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

What steps his Department is taking to help reduce the number of people who are economically inactive.

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

The labour market has recovered strongly since 2020, with payroll employment up on the pre-pandemic level in all 12 regions of the United Kingdom. We have comprehensive support in place to help people to find, progress and stay in work, with additional support for groups we know are more likely to be inactive, such as those aged 50-plus and people with a disability.

Photo of Sally-Ann Hart Sally-Ann Hart Conservative, Hastings and Rye

Work is the best route out of poverty, and it is concerning that claimants of, and public spending on, working-age benefits have increased significantly since 2019. There is more that the Government can do beyond the conditionality regime, so can the Secretary of State confirm that implementing universal support, which is designed to help those facing barriers to work and to overcome the complex challenges holding them back, will be considered?

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

I agree entirely with my hon. Friend that work is the best route out of poverty, and in that regard I commend her for her private Member’s Bill, which the Department is pleased to support. Our low unemployment rate demonstrates our extensive support for those moving into work; universal support has been replaced, as she may know, by Help to Claim, which provides tailored support to individuals making a universal credit claim across England, Scotland and Wales.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

The economy is plagued by labour shortages, from care to hospitality. On Saturday, 200 bus services in Cambridge were cancelled because of a lack of drivers, leaving health workers unable to get to and from their places of work. After a decade of zero-hours and short-term contracts, it is no surprise that people want out—they do not want to be at work because it is too tough. Is it not time for the Government to recognise that good workplace rights are not just good for workers, but good for employers and good for us all?

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

I could not agree more with the hon. Gentleman. He is right to raise the issue of economic activity. That will be a major focus of mine as Secretary of State: we have 9 million people who are economically inactive, and we desperately need to get as many as we can into the workforce, not least because under this Government we have very low unemployment, very high levels of employment and 1.25 million vacancies in the economy.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

I congratulate my right hon. Friend and send him my best wishes for his time in this important job. May I suggest that he has a look at some research published earlier this year by the Prince’s Trust, which found that there are hundreds of thousands of young people not in education, employment or training, many of whom are economically active? They want to work, but many of them are living with physical or mental disabilities. Does he agree that the right support would enable them to stay in touch with the labour market and prevent patterns of worklessness from setting in at a very young age?

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

I recognise the great work that my right hon. Friend did as a Secretary of State. There are 820,000 young people out of work and not in full-time education, and he is right that there are many things this Government can do, and indeed are doing, with our youth offer. That includes our youth employment programme, youth employability coaches and 150 youth hubs across Great Britain.

Photo of Ben Bradshaw Ben Bradshaw Labour, Exeter

I welcome the right hon. Gentleman, who is one of my neighbours, to his new post and congratulate him on his appointment. What estimate has he made of the number of people who would like to work but currently cannot do so, because they are among the hundreds of thousands waiting on record-long NHS waiting lists?

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

I thank the right hon. Gentleman for his warm words. That is a question that would probably be best answered by the Department of Health and Social Care, and I would be happy to look into that for him. We know that there is a long tail of people who would otherwise like to work but who are long-term sick—some 2.5 million in total—and, to go back to my earlier answer, it will be a prime focus for our Department, working with the Health Department, to see how we can assist and support them back into the workplace.

Photo of Chloe Smith Chloe Smith Assistant Whip

I wish my right hon. Friend and his team every success in leading this vital mission in Government, helping people into work and protecting the most vulnerable. As he says, with more vacancies than people unemployed, and with 9 million people—and rising—economically inactive, does he agree with British business that labour shortage is one of its greatest obstacles? What is his plan to unlock the talents of those who have not recently looked for work?

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

My right hon. Friend’s analysis is entirely right. We have an overheated labour market and a high number of vacancies, and the key issue that businesses up and down the country constantly raise is a lack of staff to be taken on. Broadly speaking, economic inactivity breaks down into several sectors, although I will not go through all of them; we have already touched on the 2.5 million long-term sick, and we have 900 disability employment advisers within the Department for Work and Pensions. We also have 1.2 million people who retired early, for whom we do have some schemes, but we need to give further attention to coming up with new ways forward for that group.

Photo of Kirsten Oswald Kirsten Oswald SNP Deputy Leader, Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Equalities)

At last week’s Work and Pensions Committee meeting on the plan for jobs and employment support, Tony Wilson from the Institute for Employment Studies highlighted the role of Scotland’s local employability partnerships in providing tailored support that reflects local circumstances. In the light of recent analysis by the Institute for Fiscal Studies showing that health-related economic inactivity in the working-age population has had its largest increase since the end of 2019, will the UK Government consider following Scotland’s approach of providing more customised support and helping people into work, instead of the Department’s punitive sanctions regime?

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

We already have a local skills improvement plan, but I would be delighted to listen to the hon. Lady’s thoughts; we are always happy to share best practice, and to learn from her experience and that of the devolved Administration in Scotland.

Photo of Alison McGovern Alison McGovern Shadow Minister (Work and Pensions)

I welcome the new Secretary of State and all the new Ministers to their positions. We have heard Conservative Ministers, not least the many Prime Ministers we have had in recent months, crowing about low unemployment, but the new Secretary of State will know from his time chairing the Treasury Committee that sometimes it is important to look at the figures yourself. There are 1.2 million people unemployed in our country, but also 1.8 million inactive people who say they want a job. Taken together, that is a disaster for our country. I want to know what it is about years and years of Tory misrule that always leaves 3 million people on the scrapheap.

Photo of Mel Stride Mel Stride Chair, Treasury Committee, The Secretary of State for Work and Pensions

I have taken a personal vow not to engage in too much Punch and Judy politics with the hon. Lady during Question Time, so I will not talk about what happens to unemployment when different parties get into power; I will leave that for another day. She is absolutely right about the key challenge around economic inactivity. That is why the Department doubled the number of new work coaches in the last two years; there are an additional 13,500 people working to support the exact people whom she rightly identified as needing that assistance to get into work. As I said, I intend to put considerably more energy into the whole issue of economic inactivity, and to bring announcements on the subject to the House in due course.