Employment - Motion to Take Note

Part of the debate – in the House of Lords at 4:45 pm on 6th June 2019.

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Photo of Baroness Stedman-Scott Baroness Stedman-Scott Deputy Chairman of Committees, Baroness in Waiting (HM Household) (Whip) 4:45 pm, 6th June 2019

My Lords, like the noble Baroness, Lady Sherlock, I have been delighted at the content of the debate. It has endorsed those things that have gone well and really challenged us on the things that we need to work on. I share her hope on that. It is a privilege to respond to this important debate and I join noble Lords in congratulating my noble friend Lord Leigh on having secured it. I shall try to address some of the specific points raised, but before I do I want to take this opportunity to share with the House this Government’s record on employment and our plans to address the challenges and opportunities of a rapidly changing labour market.

We are in a strong position. There are now around 32.7 million people in employment. That is an employment rate of 76.1%, which is a joint record high. It is also an increase in the number of people in employment of over 3.6 million since 2010 and an increase of 354,000 on the year. The female employment rate and number of women in employment are at record highs. The unemployment rate is at just 3.8%; it has fallen by more than half since 2010 and is at its lowest rate since the 1970s. The youth unemployment level has halved since 2010, and real wages are starting to rise. The UK compares well internationally when it comes to employment: our employment rate is markedly above both the eurozone and EU averages, and the UK had the third highest employment rate and the fourth lowest unemployment rate in the G7.

Those figures are tremendous, but we are not complacent. That is why the Government’s industrial strategy sets out an ambitious long-term vision to make us the world’s most innovative economy, future-proofing our jobs market so we can be at the forefront of emerging industries. A key component of building resilience in the economy that can sustain strong growth in the labour market is ensuring that no one is locked out of the jobs market. That is the kind of country that this Government want.

As a Government, we know how important it is that the labour market works for everyone, and I am pleased to say that we have seen improvements for underrepresented groups. Noble Lords have made different contributions in relation to these underrepresented groups, but let me be a little clearer. There are 3.9 million black, Asian and minority ethnic workers in employment. The employment rate among this group, at 66.5%, is a record high, though still obviously lower than we would like it to be. After the 2015 election, the Government made six commitments to improve the employment outcomes of people from BAME backgrounds. I am proud to say that we have pledged to increase the level of BAME employment by 20% by 2020, and already we have achieved 91% progress. The BAME employment gap has closed to 9.3 percentage points—2.1 percentage points lower than 2015.

The employment gap between disabled and non-disabled people is also closing. There is an employment rate gap between disabled and non-disabled people of 29.9 percentage points. That is too high, but it has fallen by 3.8 percentage points since 2014, and since then an extra 947,000 disabled people have entered employment. The Government have a goal to see 1 million more by 2027. There is currently a record number of 10.4 million people aged over 50 in work, an increase of 1.4 million in five years.

These figures are tremendous, but the Government are not complacent. I emphasise that we still have more work to do. We must continue to improve access to the labour market so that everyone is able to get that vital first job, wherever they live and whatever their background. We know that some groups still face disproportionate barriers to work, ranging from practical issues, such as childcare or accessibility, to straightforward discrimination. For the next stage of labour market growth, the Government are focusing on how to drive up participation for these underrepresented groups.

For example, as noble Lords mentioned, we know that caring responsibilities can be a huge barrier to work for many women. We have trialled more flexibility for parents submitting their UC childcare claims and are updating our guidance so our work coaches can use greater discretion to support parents’ claims for this essential service. Jobcentres can also use their flexible support fund to help bridge the gap to a parents’ first pay cheque. The flexible support fund is flexible in every sense and is doing great things to help people in difficulty.

Similarly, we continue to do everything we can to tackle discrimination against BAME workers. In 2017, the Prime Minister launched the world’s first Race Disparity Audit to show how outcomes across society differ by ethnic group. To try to counter this, local initiatives are taking place across the country, with jobcentres tailoring the way they deliver their services to the local people they serve. There is not time to go into these wonderful initiatives in detail now, but I can tell noble Lords that jobcentres are reaching out to particular communities, working with partner organisations to help individuals take the first steps towards employment. The DWP has run mentoring circles in the 20 areas with the largest number of ethnic minority people across the country, working with national employers to offer specialised support to help build confidence and raise aspirations in these groups. Following the success of this initiative, from April the mentoring circles will be expanded to all young claimants.

Equally, we are committed to helping disabled people and people with health conditions get into and stay in work, which they want to do. We know that the right type of work can have a positive effect on an individual’s health and that having the right health support can have a positive effect on an individual’s ability to flourish at work. We believe that the Work and Health programme, Access to Work, the Disability Confident scheme and the support offered by Jobcentre Plus are all key to supporting employers to work with the Government to see 1 million more disabled people in work by 2027. Noble Lords should feel free—I hope they do—to write to me if they want to know more details about these initiatives.

What all of this shows is this Government’s conviction that work can, and does, transform people’s lives, not just by creating a sense of value and economic security but because it can benefit an individual’s mental and physical well-being. This underpins the Government’s programme of welfare reforms.

This Government are acutely conscious that society is changing and that it is important for the labour market to evolve, but this is not easy. For example, people are living longer, healthier lives but, despite this, the average age of labour market exit for men is still lower than it was in 1950, while for women it is similar to that in 1950. Employers need a flexible labour market as the population ages and fewer people enter the labour market from education and training relative to those aged 50 and above. We need to prevent unnecessary early exits from the labour market. For example, by retiring at 65 instead of 55, a male average earner could have £280,000 of extra income and increase their pension pot by 55%.

As I have said, this Government are committed to supporting disadvantaged groups and those with multiple and complex needs, such as care leavers, as discussed, ex-offenders and those with a drug or alcohol dependency, to move closer and into employment, working with local employers and partners to provide opportunities. I would like to mention the impact that work coaches and Jobcentre Plus are having. They are more highly trained than ever and more understanding of the complexities that people face. Only last week, even in the village where I live, where everything is wonderful, a victim of domestic abuse needed the services of a work coach. They got it and it was excellent. We should all be very proud of that.

I wanted to outline what we are trying to do and what we have tried to achieve, but I am not stupid enough not to realise that there is more to do. Noble Lords have given a lot of thought as to how that might come about.

I will now try to deal with many of the questions that noble Lords have asked in their contributions. I do not think that I will be able to answer them all—in fact, I am dead certain that I will not. Please do not take that as meaning that I do not want to answer the questions—after this we will go away, look at Hansard and make sure that noble Lords get the answers they wanted.

My noble friend Lord Leigh asked about progress on the Taylor review. There is no lessening of our efforts on this. We need to ensure that the labour market continues to work for everyone. The review was commissioned by the Prime Minister and has been delivered. On 17 December we published the Good Work Plan, which sets out our vision for the future of the labour market and our ambitious plans for implementing the Taylor review’s recommendations.

My noble friend Lord Leigh, the noble Lord, Lord Haskel, and others asked how we could drive up wages. The Government have already introduced the national living wage, which is now £8.21 per hour and which provided the biggest pay rise for low-paid workers in more than 20 years. But be under no illusion: we want to go further. The Chancellor has already announced our aspiration to end low pay, and there is more that we can do.

My noble friend Lord Willetts will be pleased that I am going to read out a reference to the Resolution Foundation:

“The proportion of workers on low wages has fallen to its weakest level since 1980 and low pay could be eliminated by the middle of the next decade, an equality think tank has suggested. The Resolution Foundation said that 17.1% of workers in Britain were low-paid, which is defined as having wages below two thirds of median hourly earnings. However, it said in a new report that this proportion could fall to zero by the middle of the 2020s”.

May that happen.

On the national productivity investment fund, which my noble friend Lord Leigh and others referred to, we are committed to providing high-quality infrastructure to support economic growth and prosperity across all regions of the UK. The Government have established the productivity investment fund to deliver additional capital spending in areas critical for improving productivity. It is now set to deliver £37 billion of high-value investment to 2023-24 in transport, R&D, housing and digital infrastructure. There is a breakdown of how this money will be allocated.

My noble friend Lord Leigh asked whether the current measure of productivity had kept pace with modern society. He is right that measuring productivity is challenging, given the pace of change in the economy. The independent Office for National Statistics measures productivity for the UK and, following Professor Charles Bean’s 2016 review of economic statistics, has increased the volume and timelines of productivity available. Since 2016, the Government have provided £25 million to ensure that the UK has world-leading statistics that capture what is happening in our modern economy. That is work in progress.

A number of noble Lords referred to flexibility in the workplace not being used to cut and run with employees as and when it suits. Our employers are the ones who create jobs. They need a flexible workforce and a high degree of flexibility. We should ensure that employers have this, but, where there is a system where, unfortunately, the workforce needs to be downsized, we must make sure that people stick to the rules, that things are carried out compassionately and, at the end of it, when people lose their jobs, we must get work coaches and Jobcentre Plus to pick them up and get them back to work as quickly as we can.

My noble friend Lord Leigh asked about courts and tribunals fees; we will arrange for the relevant department to write to him. The noble Lord, Lord Shipley, outlined the situation with British Telecom. It is alarming, but I am advised that it would be premature to comment as this is a matter for BEIS. Of course, we always need to be alive to the threat of widespread economic downturn, or to be there to support individuals facing isolated but life-changing redundancies when firms close, and I am absolutely sure that Jobcentre Plus will do this.

The noble Lord, Lord Shipley, and a number of other noble Lords, mentioned that the north of England has suffered and not had the increase in jobs that London and the south-east have had. I disagree—60% of the jobs that have been created have gone into the north of England, although it should be more. The noble Lord, Lord Shipley, and other noble Lords, mentioned the industrial strategy, which sets out an ambitious long-term vision to make Britain the most innovative economy, with good jobs and greater earning powers. Every region in the UK has a role to play, and we have an ambitious agenda of devolution deals, working with the newly elected metro mayors and with local enterprise partnerships, and another £1.6 billion for the Stronger Towns Fund, which we hope will come.

We are absolutely committed to helping people progress from low pay. The Government have already introduced the national living wage, as I have said, and the Chancellor has announced our aspiration to end low pay. There is more that we can and should do, and will do.

I thank my noble friend Lord Freud for his contribution and for the sterling work that he did in reviewing and revising the benefits system. It is a great piece of work that has made a difference to a huge number of people in our country. The noble Baroness, Lady Sherlock, has highlighted some of the issues which, obviously, are concerning; the noble Baroness, Lady Meacher, has done the same. I have not got the time to go into great detail, but all I would say is, “Please do not think that we are complacent”. We have a compassionate Secretary of State, who is very committed to trying to make life better for people.

The noble Lord, Lord Monks, mentioned the situation where people are potentially losing their jobs. This gives me the opportunity to talk about the national retraining scheme, and getting to people quickly to ensure that they can be prepared for future jobs.

My noble friends Lady Fall and Lord Lupton talked about disparity in pay and being transparent. Boardroom pay is not a matter that is dealt with by the DWP, but the department has done work on executive pay transparency and the representation of women in senior leadership roles.

I am running out of time. Please do not take it personally if I have not responded to your Lordships’ questions, but I must address the noble Lord, Lord Addington, who put a late addition to his question. He spoke about the need for technology to be used in helping people with severe difficulties. Regarding the employer contributions to assistive technology under the Access to Work scheme, it is my understanding that the tech fund pays the full cost of the tech solution. There is no employer contribution. If the noble Lord requires more details, I can help him by writing to the department.

I must conclude there or I will be in trouble again, but I would like to echo the words of my noble friend Lord Leigh and pay tribute to the Prime Minister, who leaves office today. When I first met her, it was in Portcullis House at a poverty meeting about employment and making life better for people. The burning injustices that we all hate are felt greatly by her, and I know that when she is in a different role those burning injustices will not leave her. I too pay tribute to the outstanding work she has done and the difference she has been able to make to people’s lives. I wish her well for the future, as I hope the House does.

I thank my noble friend Lord Leigh for securing this debate and thank everybody for the time they have spent preparing for it. I hope that, together, we can all move on to take up some of the points that everybody has raised.