Westminster Hall debate on Employment Rates - June 6

I congratulate the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) on securing this important debate. Sometimes we do not get into the nitty-gritty of the stories behind the statistics, so I would like to focus on that today. In particular, I will focus my remarks, as would be expected of a Plymouth MP, on the experience of Plymouth, which, as we know, is the centre of the world. However, I also want to delve into the statistics and to look at unemployment not in isolation but as part of a basket of measures, because there needs to be greater focus not just on one raw indicator, standing in isolation, but on the broader picture if we are to safeguard the job creation, stability and quality of employment that we all want to see throughout the country.

 

Unemployment statistics are only one part of the picture, and I am always a bit cautious about Government statistics, whether they were produced under the coalition or the current Government or, indeed, when Labour was in power, because they are designed to tell one part of the story only. Although the overall jobless figures may be falling, which is to be welcomed, in-work poverty, insecure employment and the use of zero-hours contracts are rising. Food bank use is up. The housing crisis continues, and the welfare system continues to be cruel, all too often creating poverty and worry, where it should be achieving the opposite.

The hon. Gentleman will forgive me for interrupting him so early in his remarks, but I want to take him back to what he said about Government statistics. I agree that we should be cautious and have a healthy scepticism about statistics, but, of course, the statistics under discussion are ONS statistics, not Government statistics, so perhaps we can lend them greater weight than a sceptical public otherwise might.

Indeed. The hon. Gentleman makes a good point. How statistics are presented by Government can sometimes devalue some of the credibility that the original source may provide, and I am sure that we can all bring to mind examples of that. On the subject of statistics, I am a great believer in the way inflation is calculated. If hon. Members will indulge me for a few seconds, I will explain. Inflation is calculated by taking a basket of measures, of everyday goods, and calculating the inflation rate based on the real-world experience of many measures, many goods, not just one of them. In that sense, a basket of measures can create a fuller, more thorough illustration of what is actually happening.

 

The reality gap between individual employment statistics and the lived experiences, especially of young people, would be addressed much more thoroughly by having a basket of measures than by focusing just on the jobless figures or any other singular reality. I suggest that when we look at how we talk about unemployment statistics, employment statistics and debt, we look at a basket of measures, which needs to include employment, wages and wage growth, in-work poverty, child poverty, homelessness and temporary housing, disposable income, the number and penetration of zero-hours contracts and especially their demographic targeting, benefit take-up, sanction levels, household debt and overall personal indebtedness. Perhaps those things could be wrapped up together as a new basket of measures whereby we can look at the lived experience of people in employment, because all too often the fact that someone is in a job and that there is a tick beside that box is what is presented by Governments of all colours. We know that the lived experience of people in work, especially in today’s economy, where simply having a contract does not guarantee that someone will get any wages at the end of the week or month, devalues some of the credibility that the jobless figures or employment figures may have carried in the past, when employment was more secure and long term.

My hon. Friend is making a very important point. I thank the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) for initiating the debate. My hon. Friend discusses a basket of measures. Does he agree that one thing that we would want to establish, if it was a business that we were looking at, would be the number of hours being worked by those in work—that is, the number of hours or days available to work? That could be one of the measures showing that we actually have significant under-employment in this country and that, rather than a jobs miracle, we have something of a jobs mirage.

My hon. Friend has a way with words. Looking at the measure to which he refers as part of the basket of measures could well be useful. Indeed, we might also look at the number of jobs that individuals have, because although we have seen a rise in the number of people with contracts, many of those are part-time contracts, and people in Plymouth have certainly been telling me of needing not just one job but two, three or, in some cases, four or five jobs to pay their bills, because of the insecurity of those jobs and the hours they provide. Consideration of all those measures together would make possible a more informed value judgment about the state of the economy.

 

In recent years, we have seen a rapid shift towards a gig economy, and despite calls for an end to zero-hours contracts, many people are still struggling with the precarious nature of those contracts. There are some people who value zero-hours contracts, but my fear about what has happened with zero-hours contracts is that their utility for that small group of people has been overtaken by employers using them as a way of being more flexible with their workforce or cash flow. As a consequence, the utility of those contracts for a small number of individuals, because of the workplace flexibility they provide, has been eroded because they are being used to devalue secure work.

 

Before I came to the debate, I posted on my Facebook page—if anyone has not visited it, the address is facebook.com/LukePollard—to ask people what their experience was. I said, “I am going to a debate about employment statistics. Can you tell me your stories?” Normally on my Facebook page, I have a few regular posters, as I am sure other hon. Members do. What struck me about the response to this post was how personal, emotional and honest people were in telling me their experiences. If hon. Members have not done this on their own Facebook page, I encourage them to do so, because it helps to create a fuller picture.

 

Let me give some examples of what people said. Erin, who is one of my constituents, is a qualified secondary school teacher who has been forced to take zero-hours contracts by an employment agency for the past three years. She told me that, despite years of training, she was struggling to find permanent work, and that that has impacted her ability to pass the tenancy checks required for private renting. The figure for private renters in Plymouth, Sutton and Devonport is 43.5%, which shows just how important that can be. Erin now plans to leave the teaching profession for good and will be retraining in September. She is just one example of someone we need to retain in their role with more secure work.

 

Melanie is another example. She worked for three years at Royal Mail in Plymouth. She was on a fixed-term, 20-hours contract that was reviewed every six months. As a single parent, she spoke of the stress that the uncertainty of that brought, as she could never be sure that she would still have a job once the end of her contract rolled around. Although Melanie has managed to secure permanent employment elsewhere, her story is not uncommon.

 

Those types of lived experience are the stories behind the statistics. I am talking about the frequency of needing to go to another interview to get extra hours and then the concern and worry about what happens if an employer wants their hours to coincide with another employer’s hours. Those are concerns that many in this Chamber may not have experienced themselves, but they are genuine worries for many people up and down the country. That situation is adding to the complexity and inequality within our system.

 

Colleagues will know of the problems that universal credit has brought to the system. Indeed, the House of Commons Library points out that the roll-out of universal credit, which is taking place in part of the area that I represent but not all of it, skews the jobless figures for this period, so looking behind those figures is a little more complex and complicated than it might have been before universal credit was rolled out. I ask the Minister whether there is a way of navigating through that complexity and that added dimension to see what the underlying picture is. The roll-out of UC complicates that and affects our ability to get an accurate sense of where we are.

 

Universal credit is failing many people. We know the experiences that have been shared in this Chamber and elsewhere. Our benefits system should not allow people to spiral into more debt, and I am concerned about the sustainability of the system in its current form. Concerns around UC and the roll-out on to UC, especially for people in insecure work—although they may not be in the jobless figures that the Government provide—need to be addressed.

 

We also need to look at in-work poverty. I believe it is fundamental to most people’s reasons for entering politics in the first place—be they on the red team or the blue team—that they want to make the world a better place. The only disagreement I perhaps have with colleagues on the Conservative side is how to do that. In-work poverty should be anathema from the perspective of the Labour party, the Conservative party and other parties as well. We all aspire to help people into work so that they can provide for their families through the hard work of their own labour. If someone is in work and still unable to provide for their family, something is wrong with our economy. 

 

We know that that is the case in Plymouth and elsewhere at the moment, because we are seeing a rise in food bank use. One day I hope that we will no longer need food banks and that the fantastic volunteers who staff them can be redeployed to other endeavours. However, I know that food bank use is going up, and having seen the work of the fantastic soup kitchens and soup runs in Plymouth, I know that demand is increasing among not just rough sleepers, but those in insecure work and temporary accommodation, who cannot make ends meet and who struggle to feed themselves and their families.

 

I highly recommend that Members of Parliament and those watching at home go out on a soup run. It is an eye-opener in terms of the lived experiences of those in our communities whom we may not see during the day. When they are handed a pasty or a banana from the back of an old Transit van—as happens every now and then in Plymouth—they give back stories and gratitude. It is a really humbling experience to see people who, in many cases, are now in work but still struggling to make ends meet.

 

We need safeguards to help those who are struggling to break into the job market and permanent employment, as well as to help those who are in the job market by making sure that work can truly pay. That is not where we are at the moment, and that is especially true for those with disabilities. One of my constituents, Jo, who works in the employment sector, told me that the job opportunities advertised for students and graduates often involve temporary contracts in low-skilled roles. Similarly, Mat, from Plymouth, shared his experience of having high-functioning autism and described his job search as “impossible”. That should shame us all. The challenge for us is how and where we present job adverts, what the employment process is and the jobs themselves. I am concerned that the lack of opportunities is impacting people in Plymouth on a personal and economic level, and we must act to contain the ongoing effects of not only unemployment, but under-employment and the impossibility of getting employment in many cases.

 

Many hon. Members will know of my desire to talk about transport. I occasionally talk about trains in this place. Connectivity for the far south-west is a complicating factor in the economic performance of Plymouth and the wider south-west economy, as it is for many other parts of the country. The investment we need in structural transport, both on road and rail, and bus services within cities, can open up and transform job opportunities. 

 

I want to talk about buses for a moment, because when we look at under-employment, one concern that a number of people tell me about is that, without a car, they are sometimes unable to get to their workplace. That is because there is no public transport available or the buses stop at a certain time. That is especially true of low-wage service work. The hon. Member for Mid Dorset and North Poole talked about our hospitality sector. Without decent public transport, it is impossible for those people to get to shops, tourist attractions, cafes and restaurants early in the morning to provide sleepless people with their coffee on the way to work. The concern is that that means some people are spending their already low wages on taxis to get to work before the working day has started, eroding the value of that day’s work for them.

 

There is a lot we need to do to look behind the statistics. I encourage the Minister to look at whether a basket of measures could be more appropriate. To an extent, the debate as to what goes in that basket of measures—just as the debate as to what goes into the inflation measure—tells a story about our modern Britain. For example, when we take a record player out from the basket of inflation measures and put in an MP3 download, we can see the way the economy is changing. That same principle should apply to how we look at employment statistics and the lived experience of people seeking employment or in employment. One day I hope we will be able to take out sanctions and food bank use from that basket of measures. That should be a collective aspiration for all parties. Until the time when they are no longer in use, we should feature those as part of that collective basket of stories—that human lived experience—that sits behind the unemployment statistics. There are many other things we could add into that basket, such as mental health provision, which I have not spoken about, but I hope colleagues might add to the list in the debate.

 

So I ask the Minister whether the Department has considered a basket of measures in how it presents these stories, and I encourage all hon. Members to do as I did on my Facebook page and to get the lived experiences of constituents, because it is the most powerful and humbling experience.

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) on bringing this important issue to the attention of Parliament today. Our two constituencies could not be further apart on the map, but listening to his remarks about his own constituency, it is clear that many of his concerns regarding youth employment are similar to my own.

 

I will focus my brief remarks on an issue that is particularly relevant to my constituency in the Scottish borders, namely the problems surrounding low pay. I want to develop some of the themes touched on by the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard). My constituency has higher than average levels of employment. Some 2,700 more people are in work now compared to a low of 2,000 in 2010. That represents a rise of 6.5%. We also have significantly lower than average numbers of people claiming out-of-work benefits. We are hovering around an all-time low. The number is now half what it was in 2013. These are undoubtedly significant achievements. More people in my constituency with the security of a pay package and the positive benefits of being in work is certainly a good thing.

 

Behind the rise in employment, however, there remains a problem in my constituency: low pay. Many more people are in jobs, but too many of these jobs are low-skilled and low-payed. Gross weekly pay in my constituency is £56 a week lower than the Scottish average and £61 a week lower than the United Kingdom average. That means that employees in the borders are taking home nearly £3,000 less in their pay than the Scottish average. Those on hourly pay take home £1 an hour less than the Scottish average and £1.30 an hour less than the UK average.

 

We have a significantly higher percentage of self-employed people in the Scottish borders and more lower-skilled jobs, which translate to lower than average weekly pay. I am not here to talk down self-employed people or lower-skilled jobs. They are hugely important. Many of the jobs in places such as Johnstons of Elgin in Hawick, in my constituency, may be classified as lower-skilled, but these are incredibly hard-working people, who produce some of the finest products on the worldwide market. Nevertheless, across the United Kingdom, we need to offer a range of employment opportunities, and the borders certainly has fewer higher-paid jobs than other areas of Scotland or across the UK.

 

What can be done to address this? There are two important points. The first thing is to ensure that unskilled workers are paid a fair wage and take home more of the money that they earn. That is why I absolutely support the Government’s introduction of a living wage and the continued increase in the personal allowance. Someone who used to be on the old minimum wage on a full-time contract took home around £11,100 a year in 2013. This year the same person, now paid the national living wage, would be taking home £2,600 more, thanks to the increase in the lowest wages and the rise in the personal threshold. That is effectively a pay rise of over 20% to those on the lowest incomes.

 

Secondly, beyond paying people more, in order to bring more highly skilled jobs to places such as those in my constituency, we need to look at why businesses are not basing themselves there at the moment. The main barrier to businesses in the borders is a lack of infrastructure, both physical and digital. I know that the borderlands growth deal will be looking at this as a matter of priority. A lack of decent broadband and transportation links is undoubtedly holding my area back.

 

I conclude by commending my hon. Friend the Member for Mid Dorset and North Poole again for securing this debate. I urge all hon. Members to ensure that both the quantity and quality of employment across every part of the United Kingdom is a priority for the Government.

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) on securing this debate, albeit for the second time. 

 

We can be in no doubt about the progress the Government have made on many fronts, in addition to economic growth, in the last eight years. We should never underestimate the impact that the 2008 financial crash had on our country. By the end of the recession that followed, our employment rate had taken a serious hit. Now, almost 3.5 million more people are in work and the employment rate is at its highest level since records began in the ’70s. That is something we can all be proud of. It is also worthy of note that since 2013, more than 6,000 additional disabled people have gained the dignity and respect of employment, and we can build on that excellent figure through the Disability Confident scheme. 

 

There can be no doubt that it has been a long road, and it has been hard work. The Government have asked the British people to accept some tough choices. The people came with us on an eight-year journey and, like the Government, they can see that that period of hard work and difficult decisions is beginning to bear fruit. Our economy is growing, unemployment is down and we are finally spending within our means. 

 

Of course, there is much more to this debate than simply employment records, as has been said. We must look at the type of work people are undertaking. Are people working part time when they would like full-time hours? Are people being exploited by insecure forms of work? Are wages where we would like them to be? I do not think they are there yet, although the living wage is a help. It is all very well to have record employment, but we must ensure that it is of the right kind. 

 

I do not agree with the Opposition’s overly prescriptive policy of banning zero-hours contracts outright, or of branding all part-time or gig-economy work as bad. It is certainly not, and for many people those contracts work exceptionally well. I have spoken to students who welcome the flexibility of a zero-hours contract and to parents who are perfectly content in part-time positions that allow them to plan their lives around their families—what could be more important in life than family? I have heard from people who enjoy being their own boss, whether they are self-employed, as has been mentioned, or have the backing of an established company in an expanding franchise industry.

 

Many people have not secured the type of employment they would wish for, so I welcome the fact that the Government have commissioned the Taylor review into modern working practices, and have legislated to ban exclusivity clauses in zero-hours contracts. Those steps are proportionate and sensible, and offer real protection to people in the labour market, while allowing for individual circumstances, choice and preference. I commend the Ayrshire chamber of commerce for its “Developing the Young Workforce” initiative, which is extremely effective and welcome.

 

I stand in this debate conflicted. On the one hand, I look at the UK figures and the fantastic levels of employment, and I am proud of how far we have come. On the other hand, as a Member representing a Scottish constituency, I have concerns about how the economy north of the border is performing. Regrettably, the Scottish National party has missed five of its economic targets, which has cost more than £80 billion. That is a failure to grow the economy and to support Scottish businesses. 

 

Since 2010, the UK has made great strides. There is further to go and more to do, but the direction of travel is right. I do not want my constituents to be left behind by a Scottish Government who are distracted.

Does the hon. Gentleman accept that many of the macroeconomic levers that would be required to grow the economy to the level that he talks about still rest with Westminster?

I am grateful for the hon. Lady’s intervention, but I do not accept what she says. There are plenty of tools in the Scottish Government’s toolbox. There are so many levers that they do not use them, and sometimes they hand them back. The gift of sorting out the economy lies with Holyrood in partnership with the UK Government—not fighting against them, but working with them. That is where future success lies.

 

We have proven that with hard work, focus and determination, record levels of employment can be achieved and maintained. With progress being made in city deals and growth deals through both Governments working together—that is where the trick is—I am sure that Scotland’s economy will grow over time and that Scotland will, as always, make a significant contribution to the overall UK economy. However, good Governments know that the way to have more money for public services is to expand the economy, not to tax the people.

It is a pleasure to serve under your chairship, Sir Roger. I commend the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) on securing this important debate on employment rates. He was remarkably upbeat in the face of the pending catastrophe of Brexit and its possible effect on future, and indeed current, employment rates in certain sectors.

 

I commend the hon. Gentleman’s work with young ambassadors. It is important for young people to get involved in such schemes and I am pleased that he is part of that. I also commend his call for better cross-departmental working to address youth employment and unemployment. As I know from serving on the Public Accounts Committee, there are often calls for that sort of cross-departmental, non-silo approach, and we have to keep on at those Departments, because it is so important and it will make a big difference in those areas.

 

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) gave an excellent speech that cautioned against the selective presentation of figures by the Government, by Members of the governing party and by Opposition Members, which is very good advice. He also rightly talked of the need for a basket of measures, and about considering the lived experience of people in work, an idea at which the Government should look carefully.

 

It was good to hear the figures from the constituency of the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont), which show a rise in employment generally and among young people, and to hear about his contributions in regard to the ongoing problem of low pay.

 

I was pleased to hear the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) point out that the nature of employment needs to be examined, which was part of the Taylor review. We are yet to see the full implementation of that review or what parts the Government will act on, but iniquities in the type of employment that people undertake must be examined as well. However, I must strongly disagree with his presentation of the Scottish economy.

 

As we have heard from several hon. Members, there is some good news about employment rates across the UK, which I warmly welcome. I am pleased about the record lows in unemployment in Scotland and the increase in employment among women. There is lots more to be done to close not just the gender gap, but the gaps in disabled employment rates, as has been mentioned, and for minority ethnic communities. It is also good that the number of young people who are not in education, training or employment fell to 8% in Scotland last year. The Scottish Government have done a lot of work to create opportunities for young people. They have an excellent, well-established apprenticeship system that the rest of the UK might do well to have a peek at.

 

My city of Edinburgh has the highest proportion of high-skilled occupations among the major UK cities, including London, and unemployment rates have been lower for the last 10 years. There is a boom in the creative industries and in business start-ups, thanks largely to council and Scottish Government support, as well as the city being such a fantastic place to live. That success brings challenges, but hon. Members should not worry: I am sure we will always find room for friends from the south who are escaping Brexit.

 

To stay on the positive for a bit longer, it is heart-warming that so many Conservative Members are keen to talk about jobs and employment. What some might see as a Damascene conversion from the days of “Unemployment is a price worth paying” is very much to be welcomed, although I hope it is not just to “drool and drivel they care”, as Margaret Thatcher once said. Reformed and compassionate Conservatives might also want to have a word with their bosses about what I have to describe as the callous approach taken to people who cannot work for whatever reason of cutting cash that puts food on the table, as eloquently referred to by the hon. Member for Plymouth, Sutton and Devonport.

Where is that compassionate Government when people in Scotland are taxed far more than people in the rest of the United Kingdom?

The hon. Gentleman needs to look at the facts, because that is simply not true. [Interruption.] No, it is not. If he went back and looked at Scottish Government figures, and did not just listen to his party colleagues spinning that point, that would be good.

 

Returning to jobs, it is not only having a job that matters, but getting fair pay—enough to live on—and decent working conditions. Here, the UK Government are again falling short of the mark. The UK national living wage is not a real living wage. It is not based on the cost of living; it is a con-trick. The scourge of the working poor continues, as wages are frozen and the cost of living rises. More than two thirds of children in poverty have at least one parent in work—that is a shocking statistic—and a fifth of workers earn less than the living wage. 

 

As has been referred to, we continue to see a rise in the use of zero-hours contracts, which were up 100,000 in 2017, compared with the previous year. It is time to sort that out. We have also seen the regressive Trade Union Act 2016, a deliberate attack on the ability of employees to defend their rights. I cannot see the Government sticking up for the rights of workers any time soon. This is a Government that had to be dragged kicking and screaming through the courts to scrap fees for employment tribunals and allow the poor access to justice. Frankly, I shudder to think what is in store for our rights after Brexit, but I imagine that at least the lawyers will be kept busy, as there will be an awful lot more court cases. 

 

The employment regulations so loathed by right wingers are there to protect us—to ensure that work is safe and fair and that we have a voice when things go wrong. If the UK Government decide that fair work is important, and I hope they do, they could certainly do worse than to look to the Scottish Government for some inspiration. For example, they could look at the Fair Work Convention, which is successfully driving forward a very new approach, and recognise that working in partnership is more productive than just putting the boot in. 

 

The UK Government could also support the Scottish Government in their successful drives to boost jobs in sectors such as food and drink, instead of imposing the self-harm of leaving the EU. We have already read of secret plans to sell out the fishing industry—again—and US demands for a deal that could lower food standards, end labelling protections and allow cheap US whisky to flood the market. Trade within the EU protects not only standards but jobs—134,000 in Scotland, according to the Fraser of Allander report on Brexit. Ignoring or denying that real and present threat to the employment trends we are considering today is not good politics. It is not working together; it is working against Scotland’s best interests. We cannot just sit back and let that happen.

It is a pleasure to serve under your chairmanship, Sir Roger. I begin by congratulating the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) on yet again securing this debate, and on his work on youth employment as chair of the all-party parliamentary group on youth employment. We have heard some very interesting contributions today, including from the hon. Gentleman himself, and I really look forward in particular to the group’s work on care leavers and prison leavers, who are a matter of concern; I am sure he shares that concern.

 

We heard a good contribution from my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), who quite rightly raised the issues of in-work poverty, insecure contracts and food bank use, all of which have risen, as well as discussing how zero-hours contracts devalue the rights of employees. He also spoke about the importance of looking at a broad range of measures and at the lived experience of work; the testimony he received from his constituency, via his Facebook page, was very interesting. 

 

My hon. Friend the Member for Warwick and Leamington (Matt Western) made a useful intervention about the question of the availability of hours for people in insecure work, and said that rather than looking at a “jobs miracle” we are looking at a “jobs mirage,” which I thought was a pertinent way of describing the situation. 

 

I welcome the fact that the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) spoke about the particular issues that rural communities face. He also called for the quality and quantity of work that is available to be a focus for the Government across the board. 

 

The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) said that he did not agree with banning zero-hours contracts. I have to disagree with him on that, and I remind him that the number of people on zero-hours contracts is heading towards a million, so it really is a significant issue and I will touch on it later in my speech. 

 

The hon. Member for Edinburgh North and Leith (Deidre Brock) quite rightly called for fair pay—enough for people to live on—and pointed out that the national living wage is not, of course, an actual living wage. 

 

Increases in employment are welcome, but we also need to look beyond the statistics, as many Members have said, to see what the world of work is really like. Average real pay has still not returned to the level it was at before the financial crisis, and although inflation has started to fall, it has nevertheless outstripped wages for almost all of the period since 2010. Public sector workers have been particularly badly hit; they saw their pay frozen for two years, in 2011 and 2012, and since then any increase has been capped at 1% a year, regardless of the rate of inflation. 

 

Then, of course, there is a generation of people who were in their twenties at the time of the financial crisis, so they have spent almost all of their adult life in this period of austerity. They are now in their thirties—an age when many of them will have young children—yet median pay for people in that group is nearly 9% below the level that it was at in April 2008. 

 

The Resolution Foundation predicts that this decade is likely to be the weakest decade for real pay growth in almost two centuries. Some 20% of Britain’s 33 million workers earn £15,000 a year or less, and a recent report by the Centre for Social Justice forecast that the pay of those workers in particular would be squeezed over the next decade, as a result of trends such as the growth of the gig economy, automation and global competition. So can the Minister tell us what action the Government will take to improve the prospects of low-paid workers and what investment they will make in skills? 

 

Around 8 million people are living in poverty in the UK, even though at least one person in such households is in work, and of course many people move in and out of low-paid work. Universal credit was originally aimed at smoothing the transition into work and at making work pay, but the cuts to work allowances announced in the summer Budget of 2015 severely damaged the work incentives that universal credit offers. 

 

Reports by independent organisations such as the Resolution Foundation and the Equality and Human Rights Commission have made it clear that the increase in the national living wage and personal allowance do not compensate for the cuts to social security since 2010 for people on low income, with disabled people and single parents being hit especially hard.

 

According to a TUC report, the public sector pay cap, coupled with cuts to in-work support, means that the number of children in working families growing up in poverty will be 3.1 million this year, which is 1 million higher than in 2010. Will the Government listen to the call from the TUC and Labour to reverse the cuts to work allowances in universal credit and abolish the pay cap across the public sector, which Labour has committed to doing?

 

There are deep inequalities in the labour market, on the basis of where people live, ethnic background, gender, age and disability. The Government have repeatedly failed to address those inequalities, despite the Prime Minister’s fine words outside No. 10 Downing Street on coming to power. More than eight out of 10 companies employing more than 250 staff—such companies were required to report on their gender pay gap in April—paid men more than women and three out of 10 of them had a gender pay gap higher than the national median of 18%—in some cases it was over 50%. So now we know about those companies, but they will not face any action as a result, except perhaps reputational damage. Labour would introduce fines for companies that have a high gender pay gap that they have failed to reduce. Are the Government going to act on the gender pay audit, and if not, why not?

 

According to the Prime Minister’s race disparity audit, around one in 10 adults from a black, Pakistani, Bangladeshi or mixed background are unemployed, compared with one in 25 white British people. There are also significant differences in the kind of work that people do. For example, more than two in five people from a Pakistani or Bangladeshi background work in low-skilled occupations. Audits are important to tell us what the facts are, but we need action to address the issues they raise. How are the Government going to do that? 

 

I turn to the situation for disabled people. Back in November, the Chancellor disgracefully sought to somehow blame disabled people for the UK’s poor productivity record. That was particularly shocking given the Government’s approach to supporting disabled people into work. The Work and Pensions Committee has highlighted that funding for specialist employment support for disabled people will fall substantially, from around £1 billion under Work Choice and the Work programmes to £554 million over the lifetime of the Work and Health programme.

 

A study by WPI Economics for the Employment Related Services Association estimates that the number of disabled people receiving specialist employment support will drop from around 300,000—the number it was between 2012 and 2015—to only 160,000 between 2017 and 2020. That would be a cut of around 50%, so I would be grateful if the Minister could comment on that, as it would not only be clearly detrimental to the lives of many disabled people, but would make no economic sense. Research by Scope suggests that a 10% increase in the number of disabled people in work would increase GDP by £45 billion by 2030 and benefit the Exchequer by £12 billion. If the Chancellor really wants to address the UK’s productivity problems, he might like to give those figures some thought. 

 

The majority of employment support for disabled people will be provided through Jobcentre Plus by general work coaches. If the Government are going to take employment support back in-house, will they look again at providing specialist support, rather than adopting a generalist model for work coaches?

 

With youth employment, the figures are less rosy. One in eight young people aged 16 to 24 are unemployed, which is much higher than the overall unemployment figure. The number of young people who are economically inactive rose over the past year. That is a matter of real concern. Just over 11% of 16 to 24-year-olds, or 808,000 young people, were not in education, employment or training—NEET—in the final quarter of 2017. Only about two fifths of those young people were registered as unemployed. The rest were economically inactive and hidden from the benefits system. The proportion of certain groups that are not in education, employment or training is shockingly high. Some 30% of disabled young people and 40% of care leavers are NEET, as compared with 9% of other young people. The Children’s Society has made a strong case for there to be a specific marker for care leavers in universal credit, as in legacy benefits, so that we can measure their progress. Will the Minister commit to doing that? 

 

Since April 2017, young people aged 18 to 21 claiming universal credit receive employment support through the youth obligation. After six months of what is supposed to be intensive support, they are required to take up an apprenticeship, training or a work placement. However, organisations such as Centrepoint are concerned that young people who face the greatest challenges in finding work—for example, care leavers—might need longer than six months and more personalised support to get to the point where they can do that. The all-party group has also made that point, stressing the importance of young people with greater challenges being given support in the first instance to develop basic skills. Can the Minister tell us what percentage of young people have found work through the youth obligation so far? Will he look at the case for personalised support for young people on universal credit through specialist work coaches? 

 

The European social fund is a vital source of funding for employment support at the local level for disabled people and young people who are NEET, for example. In the present funding round for 2014 to 2020, the UK is receiving around £500 million a year, but ESF funding is important not only for the direct support it provides, but for attracting funding from other sources. The Government have announced that they will create a shared prosperity fund to replace the ESF, but time is running out to have a successor ready in time. They have said that they will publish a consultation some time later in the year, but no timescale has been announced. Can the Minister tell us when the consultation will take place? Can he tell us what he is doing to ensure that there will be no gap in the provision of employment support when ESF funding comes to an end?

 

Young people are also more likely to be working part time, in temporary employment or on a zero-hours contract than workers who are older. It is little wonder that the chief executive of the Financial Conduct Authority warned last year about levels of debt among young people that are built up in just trying to cover basic bills. Women are especially likely to be in part-time or insecure work. Some 55% of people on a zero-hours contract are women, and 45% are men. Similarly, a high proportion of people from some ethnic minority communities are more likely to be in part-time or insecure work. According to the Government’s race disparity audit, more than one in four Pakistani and Bangladeshi workers were employed in distribution or in hotels and restaurants, and one in five were in transport and communications industries, where low-paid, insecure work is common. Around 900,000 people are on zero-hours contracts. 

 

More than half the zero-hours workers in a TUC survey said that they had shifts cancelled at less than 24 hours’ notice. People with caring responsibilities simply cannot afford to take shifts at such short notice. Having made provision for childcare, to then have a shift cancelled is particularly frustrating and expensive. Three quarters of the people responding to the survey said that they had been offered shifts at less than 24 hours’ notice, and a third said that they had been threatened that they would not be given shifts in future if they turned down work. How are people supposed to manage their finances and their lives when they are on zero-hours contracts—when they do not know how much money will be coming in each week and how much childcare they are likely to need? Will the Government ban exploitative zero-hours contracts, as Labour would? 

 

The hon. Member for Berwickshire, Roxburgh and Selkirk spoke of the importance of the work of self-employed people. In evidence to the Work and Pensions Committee in January, the director of universal credit at the Department for Work and Pensions said clearly: 

 

“Self-employment is a cause of in-work poverty.”

 

We should all be alarmed by that statement. The number of self-employed people has increased. They now make up about 15% of the workforce, or 4.8 million. That figure is for 2017, and compares with 12%, or 3.3 million, in 2001. The design of universal credit means it can fail to protect self-employed people on low income from poverty. Under the minimum income floor, self-employed people claiming universal credit are assumed to be earning the equivalent of 35 hours at the national living wage after a year, even though in many cases their earnings may be much less. That is exactly why they need to claim universal credit. 

 

In February the Office for Budget Responsibility estimated that by 2022-23 more than two thirds of self-employed people claiming universal credit would lose out from the minimum income floor by an average of £3,000 a year. Someone who is self-employed, but on exactly the same annual income as someone who is an employee, can be entitled to less universal credit because it fails to take account of the fluctuating earnings that are a basic characteristic of self-employment. 

 

In conclusion, high rates of employment should be good for those who are employed. They should mean higher wages and more security, but in reality people can face years as agency staff on temporary contracts, and zero-hours workers can have shifts cancelled at less than a day’s notice, with all the insecurity that that brings. It is little wonder that the TUC has reported parents being penalised by employers for asking for flexibility for family reasons, such as for simply wanting to take annual leave when their child is sick. Work should be a route out of poverty, but recent research by the Living Wage Foundation reveals that more than a third of working parents on low incomes have regularly skipped meals because they are short of money, and almost half have fallen behind on household bills. On coming to power, the Prime Minister promised outside Downing Street to be on the side of families who were just about managing, but it is clear that her Government are failing to do that. High employment rates are welcome, but they do not tell the whole truth about most people’s experience of the world of work.

It is an absolute pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) on securing, for the second time, this important debate on recent trends in employment. He made a fine speech, as did colleagues from all parts of the House. I have time in this debate to respond to a lot of the points that have been raised, and I will aim to do that. I will also come back to some of the points that my hon. Friend raised.

 

Sir Roger, I think you and I are probably the only Members here who were in the House in 2010, when the Conservative-led Government came into office. One of their first acts was to introduce an emergency Budget. At the time—both during the debate and subsequently—there were many siren voices on the Labour Benches that warned with great conviction that the Government’s policies would lead to a big increase in unemployment. Well, those doom-laden predictions have not come to pass; as Members on both sides have pointed out, we have seen strong jobs growth. 

 

The hon. Member for Warwick and Leamington (Matt Western) is no longer in his place, but, frankly, to talk about this jobs miracle as a mirage is insulting. It is insulting to the more than 3 million people who now have a job as a result of the jobs created since 2010. It is also insulting to the employers—the hard-working companies and organisations that have created those jobs.

Will the Minister comment on the 900,000 people who are on zero-hours contracts and cannot manage their lives? They do not know how much money they are going to earn. They do not know how much childcare they need. It is a state of real insecurity, creating anxiety for a lot of people, and it is not good for the economy either.

I will of course come on to discuss precisely those points, because they are important.

 

The labour market statistics published last month by the independent Office for National Statistics—I point out once again to the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) that it is independent—show that employment in the United Kingdom reached a record high in the last quarter of 75.6%. That was the 17th new record employment rate since 2010. Employment is up by more than 3 million since 2010. I place on record my thanks, as my hon. Friend the Member for Mid Dorset and North Poole did, to all the businesses and organisations across our constituencies that have created those jobs. The unemployment rate has fallen to 4.2%, which is a 40-year low. As my hon. Friend pointed out, there are now more than 800,000 vacancies across our economy. 

 

Those who cannot quite accept that positive trend will say that all those jobs are low paid and temporary, but that is absolutely not true. Some 70% of the increase in employment has been in higher skilled occupations that pay higher salaries. Three quarters of them are full time and permanent. 

 

A point was made about where those jobs are created and whether they are all in London and the south-east. I can confirm that 60% of the growth in private sector employment since 2010 has been outside London and the south-east. 

 

Various colleagues, including the hon. Member for Wirral West (Margaret Greenwood), made a point about zero-hours contracts. Such contracts represent less than 3% of all people in employment. The hon. Lady is right to say that that is around 900,000 people, but the number is down on the year. On average, someone on a zero-hours contract usually works 25.2 hours a week. Again, of those who stated a preference—to be clear, this is in the ONS’s own labour force survey—only 30% of those on a zero-hours contract stated that they wanted to work more hours. So when the hon. Member for Plymouth, Sutton and Devonport talks about only a small number of people valuing such flexibility, I have to say that that is not what we see from the independent figures—a point well made by my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant).

I thank the Minister for giving way again; he is being very generous. Is he aware of the issue of sexual harassment in the workplace among staff on zero-hours contracts? What advice would he give to a young woman on such a contract who is experiencing that? Where can she go for support? How can she tackle it, and how can she remain employed, but in a safe environment?

Frankly, any kind of bullying and any such acts are completely unacceptable, whether someone is on a zero-hours contract or a full-time contract. As the hon. Lady knows, there are avenues open to people, but if she has specific cases, she is welcome to come and talk to me about them. It is important that we have flexibility in work patterns, which is what zero-hours contracts allow, but it is also right that the Government have banned exclusive zero-hours contracts.

 

We have discussed employment outcomes by groups. If we look at some of the groups that have historically been under-represented in the employment market, we have seen a significant improvement in their participation in the workforce. The hon. Member for Edinburgh North and Leith (Deidre Brock) welcomed the record high of 71.2% in the female employment rate, which I of course welcome as well. There are now more than 3.8 million people from ethnic minorities in work—an increase of 1.1 million since 2010. The ethnic minority employment rate currently stands at 65.1 %, which is a record high. However, I completely accept that the employment gap between ethnic minorities and the white population is too high, at 12%, and we are working to address that. If I have time, I will talk about the response to the race disparity audit.

 

My hon. Friend the Member for Ayr, Carrick and Cumnock talked about disabled people. We have seen a welcome rise in the employment of disabled people—600,000 in the past four years—to around 3.5 million people today. He also talked about the Disability Confident scheme. More than 6,000 employers are involved in that and in Access to Work support. That is really important in encouraging everyone in our country who aspires to work to have an opportunity to do so.

 

My hon. Friend the Member for Mid Dorset and North Poole made a powerful opening speech and highlighted the excellent work of the all-party group on youth employment, which he chairs. He has shared with various ministerial colleagues reports from inquiries that the APPG has conducted. Of course, I would be delighted to come to the APPG to discuss its work and to meet the youth ambassadors, who I am sure will ask challenging questions. As my hon. Friend highlighted, we have made progress on youth employment. The employment rate for those not in full-time education stands at 74.9%, and youth unemployment is down by 40% since 2010.

 

My hon. Friend made international comparisons, some of which I will repeat. The UK youth employment rate is 18.3 percentage points above that of the euro area and more than 16% above the EU average, but of course I agree with him that we need to do more. We therefore have a skills agenda, with a focus on apprenticeships and technical education. Colleagues have talked about the youth obligation support programme, which started in April last year, and about the ability to get work experience. We have also been encouraging work-based academies, which I think have been very successful. 

 

My hon. Friend talked about whether there should be better working across Government on these issues. Of course, many are joined up. I can confirm that we have a number of taskforce initiatives where Ministers work together. He will be pleased to know that straight after this debate I will be having a meeting with the Minister for Apprenticeships and Skills to discuss precisely these issues.

 

The Government are funding lifelong learning pilots, investing in a national retraining scheme, and delivering basic digital skills and careers advice for older workers who need them. We are also ensuring there is support to assist those with a health condition or disability, to make sure they are able to access the support they need to move into work.

 

On the cost of living, I know that all Members will welcome the fact that the ONS reported last month that salaries are starting to outpace inflation. I certainly want to see that very welcome trend continue. We absolutely recognise that people need additional support with living costs, and we have been providing that support. We have recognised that high childcare costs can affect parents’ decisions to take up paid work or increase their working hours. That is why, by 2019-20, we will be spending around £6 billion a year on childcare support. That includes 30 hours’ free childcare for working parents of three and four-year-olds. Within universal credit, claimants are eligible to claim up to 85% of their childcare costs. The outcome from independent evaluation in areas of early introduction shows that, with increased childcare support, parents are able to work more flexibly and increase their hours. We are championing shared parental leave and have introduced a right to request flexible working.

 

My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) welcomed the increase in personal allowances, which means that a typical basic rate taxpayer now pays more than £1,000 less in income tax than in 2010. We also introduced the national living wage in 2016, which increased by 4.4% this April. Thanks to the national living wage, full-time minimum wage workers have had a boost of £2,000 since 2016.

 

Numerous colleagues, including the hon. Members for Edinburgh North and Leith and for Plymouth, Sutton and Devonport and my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk, talked about job quality and the Matthew Taylor review. Although we need to continue to work to maintain high levels of employment, I absolutely agree that we must also address the important issue of job quality. Among its recommendations, last year’s Taylor review asked the Government to focus on the quality of work and to identify a set of measures to evaluate job quality.

 

A strand of the Government’s industrial strategy has a focus on the creation of good jobs and greater earnings power for all, so the Government have outlined five foundational aspects of good work: overall satisfaction; good pay, which includes perceptions of fairness relative to one’s peers; participation and progression in the workforce, which includes the ability to work flexibly and acquire new skills; wellbeing, safety and security at work; and voice and autonomy in the workplace. It is self-evident that if people feel a sense of control over how they carry out their job, they will generally feel much more positive about it. The Government are working with experts to identify a set of measures against which we can evaluate quality of work, and I certainly look forward to the outcome of that work.

 

I have time to go through a number of points that colleagues have raised. My hon. Friend the Member for Mid Dorset and North Poole talked about the hospitality industry, and we absolutely want to see a strong and vibrant hospitality sector. I recently met Brigid Simmonds, chief executive officer of the British Beer & Pub Association, to talk about the hospitality sector. In February this year, the Department for Work and Pensions ran the annual Hospitality Works campaign, which aims to raise awareness of the thousands of great career options that exist in the sector and to showcase some of the key employers we work with.

Yesterday, in Question Time, the hon. Member for St Austell and Newquay (Steve Double) raised the issue of introducing a seasonal hospitality workers scheme similar to the agricultural workers scheme. The one thing we know is that, after Brexit, there is a real risk that many roles in the hospitality sector could be eroded by the lack of available labour, which would impact on the domestic market, as well as on incoming tourists. Will the Minister briefly reflect on that?

I am, of course, happy to reflect on that. Perhaps it would be useful to have a discussion with the hon. Gentleman after the debate on any thoughts that he may have. 

 

The hon. Gentleman mentioned the claimant count, which is down significantly in his constituency from 2010. However, the claimant count is no longer a consistent indicator. The ONS has acknowledged that and removed it from its monthly labour market statistics. As he will know, we have launched a consultation on a new measure, and I hope that he and all colleagues will take part in that. Previously, the claimant count looked at people purely on jobseeker’s allowance, whereas now, with universal credit, which is both an in-work and out-of-work benefit, those numbers are increasing. They do not necessarily have a bearing on what is going on in the labour market, but clearly we need a consistent set of figures. I hope that colleagues will respond to that consultation, which closes on 21 July.

 

The hon. Gentleman also raised the issue of in-work poverty for working-age adults. Whichever way one looks at it, poverty rates, whether relative or absolute, or before or after housing, are lower than in 2010. Adults in workless families are four times more likely to be in poverty than those in working families, which is why we are keen to see more people move into employment.

 

The hon. Gentleman also mentioned people with disabilities. I have talked about the Disability Confident scheme and the Access to Work scheme. The number of people with disabilities in work has increased significantly over the last four years. That is something that both he and I greatly welcome. He also made a point about having a basket of measures. The Government already use a range of measures to assess labour market performance. We look at not only employment rates, but pay and productivity, security of work, and employment by labour market group—we have already talked about women, people from ethnic minority backgrounds and older workers. 

 

My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk raised the issue of productivity. That is an important point, in the sense that our productivity levels have lagged behind those of some of our peers for a long time. That is why we now have a national £31 billion productivity investment plan, focused on exactly the sort of issues that colleagues have been highlighting, such as housing, physical infrastructure, digital infrastructure and, of course, research and development.

 

The hon. Member for Edinburgh North and Leith mentioned the working relationship between Westminster and the Government in Scotland. Actually, I have had a very good set of conversations with the Minister for Employability and Training in Scotland. In fact, when we spoke about Fair Start Scotland in our last conversation, he highlighted that as an example of the UK Government and the Scottish Government working well together. Of course we want to work together, but it requires both parties to come to the table when there are decisions to be made.

 

The hon. Member for Wirral West talked about the gender pay gap and the race disparity audit. That audit was conducted under a Conservative Government, by a Conservative Prime Minister who cares deeply about the issue. It is the first time that such an audit has happened, and I know the hon. Lady will welcome it. In terms of the plans we have to assist people, we have identified 20 challenge areas where the employment gap between the white population and the black and minority ethnic population is quite large. We are looking at a number of pilot schemes to see what can eventually be rolled out across the country.

 

The hon. Lady talked about public sector pay. As she will know, the Government ended the 1% pay policy in September last year, and pay review bodies will now come forward with proposals for pay that will be considered by the relevant Ministers. We have already announced that many of the lowest paid NHS workers will see double digit pay rises over the next three years.

 

I think I have answered many of the points that were raised, so I will conclude by saying that the recent trends in employment are very positive. It is a welcome development that we are starting to see wages outpace inflation, and the Government are enacting measures to help people with the cost of living. We are ensuring that our population, both younger and older workers, are able to upskill for the jobs of the future.