Labour Market Activity

James Murray Excerpts

Tuesday 28th February 2023 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Yesterday, the Leader of the Opposition and the shadow Chancellor set out details of what would be Labour’s first mission in government. The goals of that mission are clear and unashamedly ambitious: to secure the highest sustained growth in the G7, with good jobs and productivity growth in every part of our country.

We know that continuing on the path on which this Government have set our economy will cost people dear. If we continue on that path, we will be poorer than Poland by 2030 and poorer than Romania by 2040. We are being left behind, and people are feeling the impact as they find themselves worse off in their daily lives because of low economic growth under the Conservatives. That is why our mission to achieve the highest sustained economic growth in the G7 is so important: to ensure that everyone in our country is better off.

In setting out the details of our plan, we have made it clear that economic credibility and stability are the bedrock of our approach. Under our plan, we would seize new opportunities for Britain, including catalytic public investment through our green prosperity plan. Under our plan, we would fix the problems that hold back economic growth across the UK by supporting people of all ages and in all places in the country to develop the skills that they need to fulfil their potential and contribute to a growing economy. It is crucial that everyone in the UK can play their part in growing our economy, as my hon. Friend the Member for Leicester West (Liz Kendall) set out in her excellent speech. That is why this debate is such an important part of our approach to the economic future of our country.

When it comes to ensuring that everyone can play their part, it is clear that something is not right when we have near-record vacancies while hundreds of thousands of people who want to work are not being given the support they need to do so. It cannot be right that more than 1 million people are out of work, even though they want jobs, while employers are struggling to fill more than 1 million vacancies. We know that is the result of rising economic inactivity and the Government’s failure to respond to it.

The situation has become more acute in recent years. There are now half a million more economically inactive people of working age than there were before the pandemic. Across London, which includes my Ealing North constituency, 22,400 more people aged 50 to 64 became economically inactive between the start of the pandemic and last September. As greater numbers of older people have been leaving the labour market, we also know that many people are becoming economically inactive as a result of ill health or mental ill health. Long-term sickness has risen fastest in younger age groups, with the biggest increase being for mental health. We all know that the longer a young person is left without work because of ill health, the greater the risk to their life prospects. That is why we need a Government who will help those who want to work but do not have the support that they need.

As the shadow Secretary of State, my right hon. Friend the Member for Leicester South (Jonathan Ashworth), set out, we have a plan to reform the way in which people receive help to get back into work. We would reform employment support and the work capability assessments regime, and fix the Access to Work scheme. We would ensure that there is help for the over-50s, so that those who have recently left the labour market have support and guidance to help them back into work. We would ensure that there is specialist help for those with long-term ill health by building on targeted programmes, including those that join up with the NHS.

Crucially, we would focus on locally delivered services by giving local partnerships the freedom to decide how best to design services, with a focus on tailored support that meets the needs of the local area. Under our plans, combined authorities and local areas would take control of employment support budgets. We would move away from rigid national contracting and ensure that the resources needed to help people find work are closer to the communities that we serve.

Those are our clear principles for reform. It is clear that reform is urgently needed, as the Government already spend billions on employment support programmes that are failing. Making these reforms happen and supporting people of all ages and in all places to contribute to a growing economy is a crucial part of our mission. As the Learning and Work Institute has estimated, increasing employment to the highest in the G7 over the next decade should boost our economy by £23 billion, improve the public finances by £8 billion and raise household finances by an average of £830 a year. That is why today’s debate is so important. By following our plans, the Government could get Britain back to work, help to grow the economy after more than a decade of stagnation and make sure people in every part of our country are better off.