Labour Market Activity

Chris Stephens Excerpts

Tuesday 28th February 2023 Commons Chamber

[Jonathan Ashworth]

They have been articulate and fantastic champions. I always praise my fellow MPs from Leicester. The Government need to take this agenda seriously, because we know that increasing numbers of women in their 50s are being forced out of the labour market but would stay in work if given the right flexible options.

We also need to tackle the barriers in the social security system that prevent people from moving into work. People should not be trapped on welfare, abandoned to going nowhere. That brings me to childcare. We know that childcare can make the difference between a parent rejoining the workforce and staying at home to look after their children. For some parents, childcare may not be available where they live, but for many parents—particularly those on the lowest incomes—childcare costs can be an insurmountable barrier to work. That should not be the case.

A lack of childcare, or a lack of support paying for it, should not stand in the way of a parent returning to work, yet low-income families often have that choice taken away from them. The design of the universal credit system means that childcare costs are based on payment in arrears, but as childcare usually needs to be paid up front, in advance, parents often have to choose between taking on debt or turning down work. It is pushing more families into debt. The Government’s answer is that people can go to their work coach and ask for a flexible support fund grant, but it should not be the case that a poorly understood and difficult handout scheme administered by the DWP is there to address the failings in the DWP’s own policy. We need to fix this.

[Chris Stephens (Glasgow South West) (SNP)]

Will the right hon. Gentleman give way?

[Jonathan Ashworth]

I will give way to my hon. Friend—the hon. Member.

[Chris Stephens]

I will take hon. Friend. There is another problem, which is that lone parents face the choice of working reduced hours, because if they increase their hours they will lose out on state support.

[Jonathan Ashworth]

Absolutely. It beggars belief that people are being trapped out of work because of the current system. It needs fundamental reform.

Part of the problem is the way in which the amount of childcare that can be reimbursed has been capped. A family in 2009 who received working tax credit and needed full-time childcare of 50 hours a week would have been reimbursed for 38 of those hours. Today, the same family on universal credit would be reimbursed for only 27 of those hours—at a time when we want to support more parents into work. Fixing childcare not only is the right thing to do, but will help the economy. The Centre for Progressive Policy has said that if women had access to adequate childcare services, they would generate up to £28 billion for the economy. Why are Ministers not fixing it?

Finally, the social security system should support, not hinder, people’s journey into work, but too often the system disincentivises work and makes even trying it too much of a risk. The work capability assessment acts as a barrier for people and the assessments can be arduous, lengthy and stressful. Many people with ill health simply do not want to risk going through that process again if they move into work and something goes wrong. Instead, we should guarantee that people in that position, who move into employment with the help of employment support, can return to the benefits that they were on without the need for another lengthy assessment process.

This is a plan to get people back to work, but where is the Government’s plan? They spin that they are working on something, but they cannot even tell us whether their existing policies are making a difference. I have been asking them about those policies and this is what they have told me. When I asked how much funding was allocated to each jobcentre, I was told:

“The information requested is not available.”

When I asked if they could tell us how many people had secured a job at the end of taking part in sector-based work academy programmes, I was told:

“This information is not available.”

When I asked how many people got jobs after taking part in the DWP’s mentoring circles, I was told that the information “is not collated”.

When I asked how many times people on universal credit have been asked to meet a work coach, I was told:

“No such specific assessment has been made.”

When I asked how many universal credit claimants were undertaking training or education that counted towards their work-related requirements, I was told:

“The requested information is not held.”

When I asked how many universal credit claimants were employed as carers, I was told:

“The requested information is not held.”

When I asked what the average amount of time is between receiving jobseeker’s allowance and receiving a job offer, I was told:

“The information requested is not…available.”

When I asked how many people stopped receiving employment and support allowance as a result of gaining employment, I was told:

“The information requested is not…available.”

When I asked how much money from the flexible support fund has been used to assist jobseekers with the cost of childcare, I was told

“The information is not available”.

When I asked how many individuals were awarded payments for childcare from the flexible support fund, I was told that the information requested is not available.

This lot are supposed to be getting people back to work, but a plan for jobs is not available. That is probably why the Secretary of State—the shadow shadow Secretary of State—now copies our welfare reform plans. We propose welfare reforms to benefits, and two days’ later we read in The Times that he is adopting them. We call for deeper links between health and employment services, and a week or so later he copies us. We put forward reforms to get the over-50s back into work, and a few weeks’ later he nicks them. I even went to the shop where I get my suits from—this is absolutely true—and the people said that he had recently been in there.

People say that imitation is the sincerest form of flattery, so why does the copycat Secretary of State not move out of the road and let us take over? Let us get Britain back to work, because Labour is winning the battle of ideas. I commend our motion to the House.

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[Mel Stride]

My right hon. Friend is absolutely right, and that is why we have stood up important programmes, such as sector-based work programmes, and it is why skills and apprenticeships are so important—[Interruption] —as are skills bootcamps, as an hon. Friend reminds me.

This motion is wrong on unemployment and employment, but it is also wrong on economic inactivity, because while it is true that economic inactivity rose during the pandemic, it is also true that, with the notable exception of the United States, in most countries it has gone back down to broadly where it was before the pandemic. That has not happened in the UK. It is not true to say that working-age inactivity rates have not been on a long-term decline. They have in this country, and the trajectory has been downwards. The level of economic inactivity in the UK is lower than in the United States, France and Italy. It is below the EU average, and it is below the average of OECD countries.

While there has been some softening in recent months on the level of economic inactivity in the United Kingdom, I accept that there is a lot more work to be done, which is why the Prime Minister has asked me to work across Government to review how we approach these issues, particularly in respect of disability, the long-term sick and those who are over 50 and have retired early.

Before I come to those cohorts, let me state clearly what lies at the heart of this Government’s success on unemployment and employment: the key Conservative belief that we should make work pay. The universal credit roll-out has been a huge success, despite the fact that the Leader of the Opposition suggested as recently as 2021 that it should be scrapped. We have enhanced universal credit by improving the taper, dropping it from 63% to 55%. We have increased the work allowance by £500. In terms of making work pay, for the very lowest paid we will be increasing the national living wage by 9.7% this April. We have stood up a number of important programmes that have helped to encourage people into work, among them Restart and our youth offer.

[Chris Stephens]

The Secretary of State says that the route out of poverty is work and making work pay, but the example I gave to the shadow Minister is one that came up when I was on the Work and Pensions Committee, of a lone parent not taking additional hours because they would lose state support. What are the Government proposing to fix those sorts of issues?

[Mel Stride]

I think the main point—I do not know the specific example to which the hon. Gentleman refers—is that under UC the whole driving principle is that work always pays. As someone gets into work, the benefit is tapered away, but none the less work always pays. That is why we are looking, in part at least, at these very low levels of unemployment and very high levels of paid employment.

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[Chris Stephens (Glasgow South West) (SNP)]

Thank you, Madam Deputy Speaker. I will try to be concise in my remarks to allow as many Members in as possible. The SNP will be supporting the motion.

We heard from the Secretary of State some of the old buzz phrases—I had my bingo card ready—such as “work is the best route out of poverty” and so on. I, too, am waiting for him to answer the questions from the right hon. Member for Leicester South (Jonathan Ashworth). We will see if the Minister’s response gives me those. I want to make a number of points, some of which were touched on by the Secretary of State.

I and a number of hon. Members have a real concerns about the ways the Government are trying to force people into work and to force them to increase their hours. There are also concerns about the current sanctions regime. We have had Westminster Hall debates fairly recently, to which the Minister responded. The number of sanctions being issued is spiralling. My understanding is that the only time there is a reduction in the number of sanctions is when DWP staff are taking industrial action. Those who face being sanctioned should not have to wait for industrial action in order not to be scared of getting a sanction.

I agree with the Secretary of State about the great role that DWP staff are undertaking. I hope he will consider that and offer them a decent pay rise. Even in his own Department there are an alarming number of staff who, in a survey with their trade union, indicate that they have to use food banks. That is a ridiculous situation. It is also ridiculous that DWP staff themselves are saying they cannot take on additional hours because they would then lose the benefits they are being paid by the state. I hope Ministers will listen on that point. During the Work and Pensions Committee inquiry into childcare costs—I was a member of the Committee until fairly recently—there were examples of lone parents who had to stick to the number of hours they worked. They were unable to increase their hours because that would have meant they lost universal credit payments and other benefits. That should not be happening.

On the very real concerns about the sanctions regime, it is deeply concerning that people not only get sanctioned but lose their associated cost of living payments. That only puts people into more poverty and should not happen. There is very clear evidence that sanctions do not work. The Institute for Fiscal Studies—not necessarily a friend of the SNP; it is often quoted by Conservative Members—said in a recent report that the sanctions policy currently produces

“fiscal savings indistinguishable from zero”,

yet we are still subjecting people to untold anxiety and harm.

The Secretary of State touched on the pilot. There are a number of questions that I hope Ministers can answer regarding the concerns about the pilot. The DWP—I nearly said the DUP; I’ve made that mistake before—is now starting a pilot that forces thousands of UC claimants into compulsory attendance at jobcentres 10 times over a two-week period. If someone has been a claimant for 13 weeks and fails to attend, they could be sanctioned and risk losing their benefits. That would plunge often very vulnerable people deeper into poverty. I understand that the jobcentre innovation pilot is to be introduced in 60 jobcentres, with the potential to impact thousands of claimants.

The Department has been clear that there are no extra staff to deliver the additional work, which means that yet more pressure will be heaped on the overworked, underpaid and highly stressed civil servants working in the jobcentres. The Public and Commercial Services Union believes that that will increase the risk of poverty and make claiming benefits more difficult. Martin Cavanagh, the PCS DWP group president, said:

“Our members will see through this pilot for what it is – a government hellbent on making it more difficult for people to claim benefits and which will increase the risk of poverty for those customers who fall foul of this pilot. Asking more customers to travel more often into jobcentres does nothing to help our staff or their workloads and does nothing to help the customers find the work that they need.”

It is important that Ministers respond to those concerns from the Public and Commercial Services Union.

Disability employment increased during the pandemic, but it now seems to be reducing. I think that one of the reasons is that during the pandemic people were able to utilise technology to work from home. As we have eased out of the pandemic, we have seen a massive move to force people back into offices, factories and all those places. When the Government look at disability employment, I would like them to incentivise employers to help workers work from home, because that would certainly help and be of benefit to those with disabilities. That comes up time and again when the Work and Pensions Committee looks at those issues, and I hope that Ministers will look seriously at it.

Rising insecure work and in-work poverty need to be tackled. I am concerned when I hear Ministers justifying sanctions in cases where people refuse zero-hours contracts. Zero-hours contracts do not suit everyone. I hope that the Department will look at that again. If someone refuses a zero-hours contract job, it is because it does not suit them; it does not suit everyone to be in that position. We have waited over six years for the Government to introduce an Employment Bill to address the issues around insecure work, such as people in insecure contracts being texted by their employer and being told that the first one who arrives at work gets the shift. That is the sort of practice that I hope Government Ministers will condemn, and I hope that they are working with colleagues to eliminate such practices, because they are wrong and are increasing insecure work and in-work poverty.

I hope that Ministers will liaise on some of those important issues. We need to look at how to be a fair work nation with fair work policies, so that people will be attracted back into the workplace. I hope that Ministers will look at and respond to my points. I will leave it there to allow other Members to speak.

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[Jerome Mayhew (Broadland) (Con)]

I am glad to have the opportunity to speak in this debate, not only because it highlights the Government’s proud record of increasing labour market activity, but because it raises the fundamental problem with Labour’s political philosophy: its historical and financial handcuffing to the union movement.

Unions are undoubtedly a good thing. In the early 19th century, if they had not been formed, they should have been. At a time of social immobility, they dealt with a huge and important social injustice: the dislocation between the bargaining power of the master and that of the servant—we just have to use the language of the time to make the case that there was a huge imbalance in bargaining position and therefore a need for unions. Times have changed, however. Nowadays, information on pay and opportunities is universal: I could go online today and look at employment opportunities in Bogotá as well as those in Bridgend. At a time of full functional employment, which is what we benefit from at the moment, other options for staff are available as well as combined bargaining.

The role of unions has moved away from the proud position in which they began. They are now more focused on the rights and privileges of members. In some cases, although not all, they are focused on things like the defence of anti-competitive Spanish practices or the prevention of increases in productivity and of modern work practices unless they are linked to increases in pay. All those things harm the economy.

It is perfectly rational, of course. If I were a London tube driver, would I join the union? Of course I would! Through union control, its members have got salaries of between £55,000 and £60,000 a year and 43 days of holiday. But does that help the economy? Is it good for society as a whole? No.

[Chris Stephens]

I thank the hon. Gentleman for giving way, but—with as much respect as I can muster—I say to him that it is not a bad thing that trade union-organised workplaces have higher pay than non-unionised workplaces. Surely the fact that people have more money means that they can spend money in the economy and help the private sector.

[Jerome Mayhew]

I thank the hon. Gentleman for that intervention. The question is: at what cost does this come and who pays the price? It is the young, the unemployed and the old who are outside the club of unionisation. They are the ones who pay the price, and the evidence is in the data.

It is an extraordinary fact that every Labour Government in history have ended up destroying employment, leaving more people out of work than when they came into power. The figures hide the real cost of Labour being in hock to the unions. I mean “in hock” literally: since 2010, it has received £142 million. That is excluding individual contributions to Opposition right hon. and hon. Members, and not even mentioning the hon. Member for Brent North (Barry Gardiner), so actually the number is a lot higher.

Raising employment barriers skews what would otherwise be a much more sensible employment policy for the Opposition. The costs are paid by those outside the club. Look at youth employment. In 2010, Labour left office with youth unemployment at about 20%. Right now, even after a global pandemic, youth unemployment is at 11.3%—almost half. Look at the long-term unemployed. In the 2000s, as we have already heard, Labour left about 1.4 million people unemployed for longer than 12 months. Today, the figure is 270,000, roughly a quarter of the number under the terrible record of Labour. Look at the people who are harder to employ—those, perhaps, with disabilities. Under this Government, there are 1.3 million more people with disabilities in employment than before 2016. That is the proud record of this Government. This Government do not pontificate about pay and employment; they get on with creating a dynamic labour market, supporting those most in need, not the union paymasters.

We have created a labour market not just by removing barriers to employment, but by having a benefits system that always makes work pay: the universal credit system, the destruction of which the right hon. Member for Islington North (Jeremy Corbyn) made the key plank of his 2019 election manifesto. Labour Members all fought the last election on the basis that they wanted to get rid of universal credit, and the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) continued that policy. In October 2020, when he was already leader of the Labour party, he said that “in the long term” universal credit needed to be replaced

“because… it traps people in poverty.”

However, given what we have heard from the hon. Member opposite, that now appears to be Labour policy.

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[Chris Stephens]

It is also bad employers, and they should be tackled too.

[Andrew Gwynne]

The hon. Gentleman is absolutely right. What is reckless for the economy is a disastrous mini-Budget which has left millions of householders with mortgage rates higher than they would otherwise have been that are locked in for the future, as well as higher inflation and spiralling energy costs as a consequence. That is the real impact of this Conservative Government on the economy.

In the north-west today, there are 57,000 more people who are economically inactive between the ages of 50 and 64 than there were in 2020. We hear a lot from this Government about growing the economy, but there seems to be no appreciation of the fact that, unless we get people back to work, the economy will remain stagnant. I represent brilliant, talented and hard-working people who are effectively being shut out of accessing the labour market because of long-term sickness or because the support just is not there to get them through the door.

Denton and Reddish straddles two local authorities, Tameside and Stockport, so I see two of everything. Sadly, that means I have seen two almost identical rises in the economic inactivity of my constituents since 2019. In Stockport, we have seen a 2.1% rise, and in Tameside, that figure sits at 1.7%. Across both local authorities, there are over 12,500 people currently claiming universal credit because they cannot access a job that pays sufficiently. Let us be clear: these are not people who have decided that work is not for them and have dropped off the grid—these are people who want to contribute but are finding that the door is locked.

Let us take long covid as an example. I speak with personal experience on this subject, because I suffered from, and indeed still have some of the symptoms of, long covid after my first bout of covid in 2020, and it is of great interest to me in my other role as shadow public health Minister. We know that there are around 2 million people living with this condition in the United Kingdom—that is 3% of the population—but there has been no meaningful effort from central Government to ensure that reasonable adjustments are being made in the workplace, and it can be done. Mr Speaker and those in the Speaker’s Office accommodated me. I found that bobbing up and down was exhausting and basically wiped me out, and a simple, reasonable adjustment was for me to hold up the Order Paper so that I could be called to speak. For everybody else, however, it is business as usual, with long covid sufferers being forced to navigate a system that has not adapted to their needs.

The Government have failed to provide specialist help for those with long-term ill health, to invest in upskilling or to target employment support at hard-to-reach groups. Instead, they have outsourced large sums of money to deliver schemes such as kickstart and restart, which are massively under-delivering. They are obsessed with slogans, but not bothered about whether they deliver on their promises. In the last 13 years, regional inequalities have widened, health inequalities have soared and our economy has flatlined. Despite that, Government Ministers still parrot the phrase “levelling up” without an ounce of shame or self-awareness. We can do much better.

Labour’s plan will devolve employment support, overhaul work capability assessments and provide targeted help for the over-50s and those with long-term ill health, which would be truly transformative for the people I represent. My constituents are tired of warm words with little substance. It is time for the Government to move out of the way and let Labour get on with the job of breaking down the barriers to opportunity and getting our economy firing on all cylinders again.