Lord Katz
Main Page: Lord Katz (Labour - Life peer)
Lord Hunt of Wirral
To ask His Majesty’s Government what assessment they have made of the jobs market, and of the implications for the wider economy.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, there is positive information in the labour market. The claimant count is falling—43,000 on the year—more than half a million people have moved into work over the past year, and real wages have risen more since July 2024 than they did in the first 10 years of the previous Government. However, there is more to do, and we are delivering through our Get Britain Working plan, which includes creating a new jobs and careers service, tackling economic inactivity due to ill health and delivering our youth guarantee.
Lord Hunt of Wirral (Con)
I make no apology for holding the Government to account on the issue of employment. Having been brought up in Liverpool and been a Merseyside MP for 21 years, I have seen the damage that can be done by depriving people of the dignity of work. Now we have unemployment rising towards 2 million. In my 50 years in Parliament, every Labour Government have left office with unemployment higher than when they took office. When will this Government realise that you cannot tax and regulate businesses into growth?
Lord Katz (Lab)
My Lords, I share the noble Lord’s sentiment about the importance of the dignity of work, but unemployment is a long-term trend, both here and across the G7, and it has been rising since 2023. The good news is, however, that the number of people who are economically inactive has fallen by nearly half a million, because more people are actively looking for work. Indeed, last year, employment grew by more than half a million, which is nearly twice as much as the rise in unemployment. The noble Lord asked what we will do about it, and the answer is clear. The Government are taking action on young people who are neither earning nor learning, which the last Government ignored. The Government are taking action on long-term sickness, which under the last Government reached a record high. The Government have seen pay rise more since they were elected than under the first 10 years of the previous Administration, helping to tackle the cost of living. We are going to solve the problems we inherited, and we are doing something about it.
Lord St John of Bletso (CB)
Can the noble Lord elaborate on what assessment has been made of the number and the type of jobs most impacted by AI-driven automation?
Lord Katz (Lab)
We are working across government to monitor the impact of AI and support job creation, providing skills training for those facing disruption. Just last week, the Technology Secretary announced that every adult in the UK is eligible to take free courses to gain practical AI skills for work, with a target of upskilling about 10 million employees. AI will undoubtedly transform the world of work, but the Government are taking action by establishing the AI and the Future of Work Unit in DSIT to ensure that this transformation boosts productivity and opportunities rather than deepening inequality.
Lord Palmer of Childs Hill (LD)
My Lords, I love the optimism from the Minister. Can he say what distortion there is on the employment figures from jobs which are not real jobs—zero-hour jobs—where people do not know whether they have a job tomorrow, next week or next month? There are so many people who now seem to be counted in the Minister’s assessment of jobs who are not fully employed. Do the Government have any actions planned to turn those negligible jobs into real jobs?
Lord Katz (Lab)
I am, of course, very much a glass-half-full type of person, but one of the core reforms that the Government put through in the Employment Rights Act was to ensure that zero-hours contracts do not drive standards to the bottom. We are about rewarding good employers and ensuring that they are not undercut by bad employers through mechanisms such as zero-hours contracts.
Lord Austin of Dudley (Non-Afl)
My Lords, the last Labour Government in which I was a Minister made huge strides in reducing long-term youth unemployment, but tragically we are in a situation now where we have a million young people not in education, training or work. If there is one thing a Labour Government should be about, it is opening up opportunities and providing jobs for young people. This should be the Government’s number one priority, and they should be talking about it every single day of the week. Therefore, can the Minister update the House on what the Government are doing to massively expand the number of public sector apprenticeships, to set an example to employers in other sectors, and to ensure that companies and organisations which benefit from public sector procurement are massively increasing the number of apprenticeships they provide as well?
Lord Katz (Lab)
I completely agree with the noble Lord’s assessment about the importance of tackling youth unemployment. Indeed, we have set a bold new target of two-thirds of young people participating in higher-level learning, whether academic, technical or through an apprenticeship, by age 25. Indeed, as the House heard from my noble friend Lady Smith of Malvern earlier, we have a youth guarantee, and we have Alan Milburn leading an investigation into the cause of NEET, and he is working at pace. There will be an interim report in the spring and a report with recommendations in the summer. We are taking this very seriously and we will act on it.
Lord Watts (Lab)
Following the previous question, which set out a strategy for dealing with youth unemployment, may I remind people that it was under the free market antics that we have just heard about that the Thatcher Government decimated my constituency and many Merseyside constituencies, and left them with record levels of unemployment?
Lord Katz (Lab)
Of course, I completely agree with my noble friend; I will offer just one illustration of that. Under the last Government, long-term sickness became the most common reason why people were economically inactive for the first time. It reached a new, record high of 2.8 million people. This is a shameful record, and not something that they should be preaching to us on.
Lord Harrington of Watford (Non-Afl)
My Lords, I do my best in these questions not to give Ministers—particularly this Minister—a hard time. However, in my capacity as chairman of Make UK, which has 26,000 manufacturing companies, I speak to a lot of employers. They find, first, that in the last year or so, they have been faced with energy costs that are twice as much as those of their competitors in Europe, and despite the Government’s announcement nearly a year ago of a reduction in those energy costs, they have not seen anything happen. Secondly, there has been an increase in national insurance, which is a big payroll tax, and thirdly, there is the bureaucracy and other things that come out of the Employment Rights Act. Given all this, how can the Government expect employers to employ more people?
Lord Katz (Lab)
The noble Lord has raised a number of factors there, and I do not want to take up too much time in the House going through them one by one. For example, I have already talked about the Employment Rights Act and how that is about benefiting millions of employees. Also, to be absolutely clear, we are taking active measures on energy costs. We are working with Sir Charlie Mayfield to ensure that when people get work, they stay in work, and lots of employers are working with him. He is working with over 120 businesses, which employ 5 million workers, as part of the vanguard phase of his plan to ensure that we do not just get people working but keep them working. I understand the challenges that this Government face in fixing the mess that the previous Government made over the previous 14 years, but we cannot undo 14 years of damage in merely 18 months.
Lord Skidelsky (CB)
My Lords, in view of the continuing high level of long-term unemployment, would the Government seriously consider the TUC proposal for a national job guarantee with wage subsidy to employers for up to six months, targeted at the most vulnerable areas? Would they further consider the argument that the TUC has made that such a job guarantee would largely pay for itself by increasing revenues and reducing the spending on welfare?
Lord Katz (Lab)
I thank the noble Lord for raising that interesting proposal. I do not know the detail of it, so I would have to take it away. However, that is very much what we are doing with an element of our youth guarantee, as we heard earlier from my noble friend Lady Smith. That is about giving a six-month guaranteed job for young people who have been receiving universal credit and looking for work for more than 18 months. That is the kind of model that we are trying out to tackle that particularly hard-to-get-to and important part of unemployment.
Viscount Younger of Leckie (Con)
My Lords, I am also a glass-half- full person, but in relation to what the noble Lord has said, there are two major reviews into the welfare system with a link to work. They are due to report later this year—at last—but their recommendations are likely to require primary legislation. There seems to be a perfect storm of inaction or delay, with no decisions expected to be taken on welfare this Parliament. What, then, is actually happening on welfare?
Lord Katz (Lab)
To echo the words of my noble friend Lady Smith, all this is around reforming welfare and the way to get people into work more comprehensively. These are serious, deep-seated issues that we must take time over, but as I have said, the Milburn review, which is about tackling NEETs—which I think the House will agree is one of the most serious problems that the country, the economy and young people face—is working at pace to deliver on that.