Welfare Reform and Work Bill — Committee (3rd Day) (Continued)

Part of the debate – in the House of Lords at 9:15 pm on 14th December 2015.

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Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions) 9:15 pm, 14th December 2015

My Lords, before I get to Amendment 62, I will comment on the range of amendments which other noble Lords have spoken to. Each of these has the aspiration of getting appropriate reporting requirements from the Government, particularly to address the challenge of closing the disability employment gap. We heard from the right reverend

Prelate the Bishop of St Albans about the importance of reporting, particularly in the context of something such as the ESA WRAG. If that is going to challenge closing the employment gap then reporting is needed to make sure it is better addressed. He said that we have ignored for too long the aspiration of disabled people to work.

The noble Baroness, Lady Grey-Thompson, supports the ambition of halving the disability employment gap, stressed the importance of reporting to help achieve that and thought that Access to Work was too inflexible as a programme. The noble Baroness, Lady Manzoor, stressed the importance of making sure that the various sectors of the economy accessed by disabled people—the types of jobs—are effectively reported on as well, not just the crude aggregates. My noble friend Lady Drake made a not dissimilar point in terms of looking not just at aggregates but at job quality, job security, underemployment and upskilling, and asked why we have this growth of zero-hours contracts when the economy is growing. The noble Baroness, Lady Hollins, said that if we are committed to halving the disability employment gap, it is logical that we report on progress, and spoke about programmes involving individual placement and support. The noble Lord, Lord Suri, said that we cannot afford not to address this issue through reporting.

My noble friends Lady Pitkeathley and Lady Lister focused on carers, and said that the report must include people who have been kept out of the workplace because of their caring responsibilities and wish to return to it. That issue has probably been too long overlooked. The noble Baroness, Lady Doocey, focused on the issue of employer attitudes.

The noble Baroness, Lady Campbell, as ever, gave a very authoritative view of what is needed. She identified that there is still systematic and deep-rooted discrimination; that we need to change employer attitudes and reporting each year will be important to seek to address that; that this will need a cross-government approach; and that it is time to move away from awareness-raising.

My noble friend Lady Donaghy focused extensively, and with great authority, on the self-employed, making the point that the tax credits system is not effectively geared to deal with self-employed people who do not readily fit the procedures. She was less than pleased with the concept of monthly returns, suggesting that they were bureaucratic. My noble friend touches on hugely important issues, given the growing importance of self-employment to our economy.

As I said, we have Amendment 62 in this group, which offers a definition of full employment as 80% of the working population. As a number of the other amendments do, it also calls for the report on full employment to specify what progress has been made towards halving the disability employment gap. In this latter regard it covers the same ground as amendments in the name of the noble Baronesses, Lady Manzoor and Lady Campbell, and others, which reasonably require more ongoing details—for example, of the type of jobs that disabled people are able to secure and what steps are required when progress is insufficient. We have no difficulty in being able to support those.

We welcome the Government’s commitment to report on progress made towards full employment, as we do their stated aim of halving the disability employment gap. We note that the definition of full employment is to be left to the Secretary of State to interpret at each annual report, and so could be a movable feast. As we did in the other place, we offer 80% for the definition, and hope that Ministers in your Lordships’ House will be a little more forthcoming on how they would approach that measurement. Perhaps we can at least have some indication of how the Government propose to construct their definition. Will it be a single measure regardless of the components of the data? What about the progress, for example, of former carers—the subject of the amendment of my noble friend Lady Pitkeathley? We know, for example, from the ONS that there are some three-quarters of a million contracts with no guaranteed term—more than 100,000 up on a year ago—and that 1.5 million contracts do not guarantee a minimum number of hours. My noble friend Lady Drake touched upon these issues as well. In 2014, just under one in 10, or 3 million people, wanted to work more hours. They are the underemployed. How will these issues be included in the reporting?

My noble friends Lady Donaghy and Lady Drake raised various matters about the self-employed. Perhaps the Minister can say something about how the reporting is going to cover their situations. These are very relevant issues and I support their amendments. We know that the rise in total employment since 2008 has predominantly been through self-employment, a point which I think my noble friend Lady Drake raised. In 2014, there were 4.6 million people who were self-employed in their main job—15% of those in work. There were also almost a third of a million employees who had a second job in which they were self-employed.

Let us compare the second quarter of 2014 to the first quarter of 2008. Unemployment among the self-employed rose by 732,000 but the number of employees rose by 339,000. As the inflow rate has stayed fairly steady, the increase seems attributable to a decline in the off-flow rate, rather than a great flood of entrepreneurial activity. Although it is mainly men who are self-employed, the most common roles being in construction, taxi driving and management consultancy, the number of women in self-employment is increasing at a faster rate than for men. According to the ONS, the average income for the self-employed has actually fallen by 22% over the period since 2008-09, which again was a point that I think my noble friend Lady Drake referred to. The purpose of touching upon these issues is to emphasise that employment policy is not just about counting aggregates but should be about the quality of jobs—“decent work” is a term that is growing in use. We hear that what gets measured and reported on will get the attention of government, so how wide will their attention span be on this issue?

We have long since signed up to the importance of work and supporting those who can get back into work. We adhere to the Waddell and Burton doctrine about work—good work—being good for one’s health. But the proposition about work being the best route out of poverty is, as we have discussed on a number of recent occasions, coming under strain. It certainly will without in-work benefit support from government. However, 80% of the active population is an ambitious target to have for full employment. It was one adopted by the previous Labour Government and noted at the time by the noble Lord, Lord Freud, as ambitious, although good progress was made before the banking crisis of 2008. We know that the Minister is wary of targets, but on what will the Government base their judgment of full employment?

My right honourable friend Stephen Timms MP picked up on the suggestion that the Government would prefer a formulation to the effect that the target employment rate should be the highest in the G7. I cannot imagine that this would satisfy a purist such as the Minister, but he may wish to comment. Of course the UK, at 73%, is currently somewhere in the middle: I believe it is behind Germany and Japan but ahead of the US and France.

Reaching or making progress towards full employment must inevitably entail the Government beginning to deliver on their commitment to close the disability employment gap. The employment gap between disabled people and the rest of the working-age population stands at an alarming 33%. It has been remarkably stubborn around that level for a number of years and, as we have heard, that statistic masks a range of different outcomes, as we discussed when debating the ESA changes and the review produced by the noble Lord, Lord Low, and his colleagues. The employment rate for those with learning disabilities is just about 8%, and for those with autism about 15%.

The consensus is, I think, that if progress is to be made on this gap it will require a radical reform of the employment support being delivered to disabled people. It also needs a change in public and employer perceptions. Debate in another place referred to the failure of the Work Programme, and the highly regarded Work Choice looked as though it lacked sufficient focus.

In the other place, the Minister said that it was necessary to report on closing the gap because it is inextricably linked to reporting on full employment. The difficulty with that position is that there will be a range of issues which impact on attaining full employment. Even if the Minister does not accept our 80% this evening, could he outline how he sees the target rate being constructed and the extent to which it will address a range of issues which noble Lords, in their amendments, have identified this evening?