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The Minister for Employment (Damian Hinds)
It is a great pleasure to see you in the Chair again, Mr Howarth. I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing a debate on this most important issue, and congratulate everyone who has contributed to it. These are very serious matters. They are not new, I am sad to say. There have been income disparities and health inequalities in our country for a very long time. The alleviation of poverty and the spreading of opportunity are key aims that have brought hon. Members on both sides of the House into this line of work and into public policy. We may have different approaches to some of the issues, but they are no less important to Members, whichever political party they represent.
I particularly want to join the hon. Members for Liverpool, Walton, for Garston and Halewood (Maria Eagle) and for Liverpool, Wavertree (Luciana Berger) and the right hon. Member for Birkenhead (Frank Field) in commending the great work of the voluntary sector in this area. Again, that is not new. Over many decades—centuries, in the case of some organisations—great support has been given to the neediest people in our communities.
I want to set out, in the time that I have, some of what the Government are doing or seeking to do to make further progress, what has already been achieved and what more we believe can be. As a number of hon. Members said, my right hon. Friend the Prime Minister has made it clear that the Government are committed to building a country that works for everyone, not just a privileged few. That includes building strong economies in every part of the country, ensuring that everyone can benefit from our strong record on the economy.
There is clear evidence that the best route out of poverty is through work. We know that because working-age adults in non-working families are almost four times more likely to be on a low income. According to the “Child poverty transitions” report published in June 2015, 74% of poor children in workless families who moved into full employment exited poverty. I would therefore like to draw hon. Members’ attention to our record on employment and set out what we are doing to help to get even more people into work.
The latest employment figures, as you will know, Mr Howarth, show that the employment rate is at the record high of 74.6%. The number of people in employment is also at a record high—31.84 million. Those trends are being seen broadly across our country. Since 2010, more than 60% of the rise in private sector employment has taken place outside London and the south-east. The employment rate for the Liverpool city region, at 67.7%, is 2.7 percentage points up on 2010. The unemployment rate in the region is now 5.4%, down from 10.4% in 2010.
The hon. Member for Liverpool, Walton suggested that there were particular issues, with people being able to find only part-time work. Of course I acknowledge that there are people working part time who would prefer to be working full time. I am pleased that that number has come down and that less than 14% of part-time workers are now in that position and would prefer to be working more hours. In the last year, more than 70% of the growth in employment has been in full-time work.
Pay is also up, by 6.2% on the year. The people right at the bottom of the income scale—the bottom 5%—have just seen, according to the latest annual figures, the highest rise in their average income since that data series began, in 1997. Income inequality is down.
Our welfare reforms are at the heart of our approach to increasing employment.
Maria Eagle
Given the rosy picture that the Minister is painting of employment and opportunity, can he explain why the number of people having to resort to food banks in my constituency is going up?
Damian Hinds
I do not seek to put any tint or rosiness on the situation. I was merely going through the facts, both at national level and at the level of the Liverpool city region. It is the case that more people are in work and we are now seeing incomes rising. Of course there is more to do; I never dispute that. My colleagues in jobcentres are working night and day on exactly that, and of course the overall stewardship of the economy remains central to people’s prospects.
We are delivering a modern and effective welfare system that ensures that work, and progressing in work, will always pay. Alongside that, we are taking action against child poverty and disadvantage, addressing the complex barriers that face some families and hold them back. Of course, we continue to protect and support those for whom work is not and cannot be an option. We have had to make difficult decisions on welfare spending, but we have never lost sight of that mission. Universal credit lies at the heart of it, transforming the welfare system to ensure that it always pays to work and to progress. That is in contrast to the pre-2010 system, under which in-work poverty increased by 20% between 1998 and 2010, despite, as is well known and as was discussed, welfare spending on those in work increasing by £28 billion.
We are building a fairer system that will mirror the world of work, we are eradicating the complexities and disincentives of the old system, and it is working. There are 828,000 fewer workless families now than in 2010, putting the workless household rate at its lowest since records began. Unemployment is down 894,000 since 2010 as the economy has grown. The employment rate, as I mentioned, is at a record high. In the last year, we have seen nearly 300,000 more people with disabilities, over 200,000 more women and over 150,000 more people from ethnic minority communities moving into work. Almost 1 million households have made a claim for universal credit, and there are nearly half a million current claimants. We began rolling out the full universal credit service on Merseyside in July and will have completed the full service roll-out to all Jobcentre Plus offices on Merseyside by September 2017.
Maria Eagle
I am grateful to the Minister for giving way again; he is being very generous. Given that he is still painting a rosy picture and that the number of people who are hungry and having to resort to food banks and food assistance in my constituency is going up, will he undertake now to go back and persuade the Government to start collecting statistics about food bank use and why people use food banks, so that we can get a better picture, using official statistics, of what is causing that increasing and distressing problem?
Damian Hinds
The reasons that people use food banks are complex and overlapping, as the hon. Lady knows. Assistance provided by voluntary sector organisations can take a number of different forms. She will know that the Trussell Trust, an umbrella group for food banks, does in fact produce statistics on a regular basis.
Once universal credit is fully rolled out, we estimate that it will generate around £7 billion in economic benefit every year and boost employment by up to 300,000. We believe that making work pay and opening up opportunity for people to realise their potential are central to building an economy that works for all. By reducing the universal credit taper rate to 63%, we will further improve the incentive to progress in work, helping up to 3 million households to earn their way out of requiring welfare support.
Jobcentres across the city region were mentioned. Our jobcentres have an absolutely key role to play in supporting people out of poverty across the country, and I am proud of what our staff—our work coaches and others—do. Day in, day out, they help people to access both the financial and practical support they need to move into employment. As society has changed, so have our jobcentres; the offer in a jobcentre today is unrecognisable compared with what people would have seen in the 1970s. Reforms such as universal credit are revolutionising the relationship between our clients—our claimants—and work coaches, ensuring that the support we offer is more personalised and better suited to their needs. That includes enabling claimants to access our services in different ways that suit them.
It is right that the future of the estate reflects not only those fundamental changes, but the record levels in employment across the country, while always allowing a margin of flexibility for potentially unforeseen circumstances. In 2006, DWP employed 113,000 staff. Today that figure is 79,000, but on the same estate—because we have been locked into a 20-year private finance initiative contract that was signed in 1998. That means money is being spent on space that is not being fully utilised. That contract comes to its end, after 20 years, at the end of March 2018, which is an opportunity to review which offices we need in the future across the country, saving the taxpayer money while ensuring our customers are able to access the support they need.
Margaret Greenwood
On PFI contracts, and personal to my constituency, could the Minister look at the Hoylake jobcentre? I understand that there is a different arrangement there. This is not just about the ending of a PFI contract; I think there is something else going on here. Could he give us a picture as to what percentage of the jobcentres are about PFI and what are about something else?
Damian Hinds
I am happy to, although I also want to make sure I respond to points raised by colleagues. It is the fact of the end of the PFI contract, which covers most of the estate, that gives the opportunity and indeed creates the imperative to review the entire estate because we see the estate all as one. The Telereal Trillium contract does cover most buildings, but of course there is a knock-on effect both ways through buildings that are not covered by that contract.
In Liverpool, we currently use just 66% of the space that we are paying rent for. Even if we go ahead with the changes we propose, Liverpool will still have one of the highest concentrations of jobcentres relative to other conurbations. When considering this question, our overriding priority has been the future service that we will offer our claimants. In every case in Liverpool, as elsewhere, we have sought to minimise disruption, moving existing jobcentres into nearby sites and co-locating with other services wherever possible.
Luciana Berger
Does the Minister not accept the point I made about Liverpool being disproportionately hit compared with any other city in England, with 40% of our jobcentres now earmarked for closure according to his plan? A not insignificant number of people are affected. In my constituency alone, 3,000 people will have to go to a new centre at least every two weeks. Thousands more have to access those two jobcentres. At least 3,000 people will have to do that. On that basis, does he accept that there is a disproportionate impact on the people of Liverpool? People not only in my constituency, but in others will be affected, as Members have said in this debate.
Damian Hinds
There are, of course, public consultations being run for both Edge Hill and Wavertree. As I was saying, even with the effect of these changes, there will still be a significant concentration of jobcentres in Liverpool compared with other major cities.
Frank Field
Given that I sprung my questions on the Minister, might he write to us so that he does not have to turn so many pages over?
Damian Hinds
I will be delighted to write to the right hon. Gentleman.
Looking at our benefit reforms alone fails to appreciate the wider work on support for those on low incomes. I mentioned the increases that we have recently seen in pay. I do not have time to list all the other advances, but they include the national living wage, the changes in the personal tax allowance and the triple lock on pensions—the hon. Member for Liverpool, Walton brought up the link with pensions, but it was in 2010 that the triple lock came in. We have frozen fuel duty, helped to keep mortgage rates low and are cutting stamp duty—all of those are things to help people with their incomes.
Like many other areas, as the hon. Gentleman knows, Liverpool is benefiting from radical devolution. The city region devolution deal involves £900 million going to the city region, and that is just part of the picture. The regional growth deals involve £333 million from the local growth fund from 2015-21, bringing forward at least £249 million of additional investment from local partners and the private sector. We do think that devolution has an important role to play in helping to promote and push forward economic prosperity.
Since 2010, we have seen income inequality and the proportion of people on relative low-incomes falling to nearly their lowest levels since the 1980s. Official statistics show that, in Liverpool, the rate of relative low-income has fallen since 2010, and there has been a similar reduction nationally.
I want to turn quickly to some of the points raised in the debate. The rate of sanctions in Liverpool is down by 50% in the year to 2016. We are looking at the results from the Scottish pilot that the hon. Member for Wirral West (Margaret Greenwood) referred to. We have taken on the recommendations of the Oakley review and, indeed, a number of recommendations from the Work and Pensions Committee. Debt was mentioned a number of times. I am proud of this Government’s commitment to the credit union sector, the action that has been taken on payday loans, the introduction of the help to save programme and that budgeting support is at the heart of universal credit.
The hon. Gentleman asked, “Why not more devolution?” He talked about schools. I would argue that free schools and the academies programme are the ultimate in devolution, giving power and accountability right down to individual schools. In terms of all these matters, we are always open to further proposals. The Government will of course be keen to work with whoever is elected as Mayor of Liverpool on employability and other things. The hon. Gentleman asked specifically about work in community locations. Edge Hill jobcentre—somewhere I visited recently—does exactly that, for example in its programme with refugees. Mr Howarth, I am out of time and I know that the hon. Gentleman would like to speak.