Economy: Sustainable Jobs

Lord Shipley Excerpts

Thursday 27th June 2013 Lords Chamber

[Lord Shipley]

My Lords, I thank my noble friend Lady Brinton for initiating this important debate on sustainable jobs, in which the word “sustainable” is of crucial importance. This is about creating growth and long-term employment opportunities for everyone who wants to work.

We should note some helpful trends in the overall position on jobs in the past year or so. There are almost 30 million people employed in the UK, which is up by 432,000 from a year ago. Unemployment remains stubbornly and worryingly high at 2.5 million. It is, however, down by 88,000 from a year ago. More than a million jobs today are held by the over-65s. Nearly 10% of those aged over 65 are now employed, which is the highest level since records began in 1992. I welcome that. It is in part a sign of the times and, no doubt, with the rise in the pension age that figure will continue to rise.

In vacancies, there has been another helpful trend. In the latest quarter, there were 518,000 job vacancies, up 48,000 year on year, which is the highest number of vacancies since 2008. In March—the latest figures we have—there were 24 million private sector jobs, up 46,000 from December 2012, and 5.7 million public sector jobs, down 22,000 from December 2012. We can see a reduction in public sector jobs but an increase in private sector jobs, and we should note that, despite the loss of public sector jobs, 1 million private sector jobs have been created since 2010.

Nevertheless, there are major disparities. The employment level in the south-east outside London is 75% but in my home region, the north-east of England, it is 67%. There are some 458,000 people who have been unemployed for more than two years. I agree with my noble friend Lord Kirkwood of Kirkhope about the stigmatisation of those who are unemployed through no fault of their own. We need to be very careful about our use of language. There are 458,000 people who have been unemployed for more than two years, and we need to get that figure down. There are 401,000 people aged 18 to 24 who are on jobseeker’s allowance. That figure is down 63,000 since May 2012. There are 950,000 unemployed people aged 16 to 24. That figure is down 60,000 since the previous year, but it is still worryingly high. The Government have recognised the geographical and sectoral imbalance across the country that needs to be addressed.

Sustainable jobs depend on growth. Skilled people are needed to do the jobs that drive growth, and can drive exports and reduce imports. As we know, with more people in employment, tax revenues will rise. I shall address the first of those four statements on growth. I have no doubt that government actions are helping. The funding mechanisms include: the regional growth fund that my noble friend Lady Brinton referred to, and I declare that I am deputy chair of its advisory panel; the single local growth fund which was announced yesterday by the Chancellor; the £500 million committed for superfast broadband in rural areas; the Green Investment Bank; the business bank due next year; and, as announced in the Budget, the reductions in national insurance to give employers a £2,000 cash payment to make it easier for them to take on staff.

We should note the success story on apprenticeships. This Government have created more than 1 million apprenticeships. We want to double to 200,000 the number of businesses that offer apprenticeships. There are 5 million businesses in the UK, but only 100,000 offer apprenticeships. I feel optimistic that the Government are doing a lot to deliver growth, but one of the barriers is skills and vocational education. We need to enhance the offer in vocational education to give people skills to do jobs rather than, as we have done in the previous decade, encourage very large numbers of people to go to university, at the end of which they may not have the skills to undertake some of the jobs we need done. For example, there is a critical shortage of engineers at senior levels.

I shall make a point about gender: there is a shortage of women in business. Just one in 10 engineers is a woman and just one in 20 engineering apprentices is a woman. Something needs to be done about encouraging girls at school and in education to become scientists and engineers. When I read that in half of state secondary schools not one girl is doing A-level physics, I become very concerned about the career pathways that are being discussed with pupils.

We need to understand why we have unemployment at the same time as we have skills shortages. Employers in all parts of the country say the same thing: there are serious difficulties in recruiting skilled staff in engineering, processing and manufacturing. We have a large number of young people who are unemployed—410,000 of them in receipt of JSA—but at the some time we are being told by employers that there are many jobs that they want to fill but they cannot find qualified people to fill them. We have to get a far better balance between those two things.

My noble friend Lord Teverson talked about the language issue in imports and exports. It is a major barrier for firms exporting from the UK. Another problem has emerged in a recent survey undertaken by the British Chambers of Commerce. It is the lack of knowledge about regulation in other countries. That chamber of commerce survey showed that 60% of chamber members say that they do not export. We need more companies to export, and that means that UKTI, local enterprise partnerships, British embassies and local authorities have to make it a greater priority because exports drive growth. I am proud to live in the one region of this country that has a positive balance of trade. The north-east of England exports more than it imports. We should build on the potential of that record.

One of the problems we have is that we import too much because our indigenous supply chain is not strong enough. If we imported less by building up our own supply chain, we would reduce the amount that we buy from overseas. I particularly pay tribute to the Government for the fact that we now have an industrial strategy in place, with a British supply chain as an important element.

I mentioned the number of long-term unemployed young people. Sustainable employment is part of social inclusion. We have to make sure that everybody is able to take part in the future growth of this country. That means that jobs need to be created, preferably though apprenticeships, for everybody. It is an obligation not just on government but on the private sector, the voluntary sector, the third sector and the public sector. We all have to do everything we can to get everybody who wants a job into one. There have been many schemes in recent years: the Community Programme, Employment Action, the Community Action Programme, the New Deal, Step Up, the Community Task Force and the Future Jobs Fund. History suggests that it is difficult. There have been so many of these schemes, but I was somewhat surprised to discover yesterday that there are 33 different funds and schemes supporting young people in England at a combined cost of more than £15 billion per year. There are two ways of looking at 33 schemes. You can say that each one has a specific aim and is doing a specific job, and that may well be true, but it is also possible that it simply confuses the landscape so that those who want to employ more people find it more difficult to do so and young people find it difficult to engage because they do not know where they should be engaging. We need to look at that very carefully.

I am absolutely convinced that apprenticeships are the way forward. I believe that we can double their number to 2 million. Giving people skills through an apprenticeship builds a trained workforce and the skills of employability enable an individual to move on into sustainable work.

I shall just mention self-employment. I am chair of the Prince’s Trust in the north-east of England, and I am excited by a number of projects now taking place across the country that encourage self-employment and enterprise skills in young people. A lot can be done.

My final question for the Minister is whether he agrees with me that doubt over EU membership does not help inward investment and the creation of sustainable employment, not least through the single market and access to EU trade agreements with other parts of the world. This is not helping our need for sustainable employment and I hope that the Government will do all that they can to fight for the case that membership of the European Union is absolutely central to the delivery of sustainable employment.