Employment Rates

Lord Sharma Excerpts

Wednesday 6th June 2018 Westminster Hall

[The Minister for Employment (Alok Sharma)]

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.

[Margaret Greenwood]

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.

[Alok Sharma]

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).

[Margaret Greenwood]

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?

[Alok Sharma]

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.

[Luke Pollard]

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?

[Alok Sharma]

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.