Labour Market Activity

Jonathan Ashworth Excerpts

Tuesday 28th February 2023 Commons Chamber

[Jonathan Ashworth (Leicester South) (Lab/Co-op)]

I beg to move,

That this House is concerned that the number of people out of work and economically inactive is higher than before the pandemic, that thousands of older people have left the labour market and that there have been significant increases in the number of people out of work due to ill health or mental ill health; notes that recent employment support schemes have underperformed and underspent; condemns the Government for its failure to get more people into work; regrets that this failure is contributing to low economic growth and falling living standards; and therefore calls on the Government to get Britain back to work by reforming disability benefit assessments, devolving employment support to local areas and providing specialist and targeted help for those with long-term ill health or aged over 50 to grow the economy and boost both public finances and household incomes.

I ask the House to endorse this motion for one simple reason: it is time to get Britain back to work, and to extend opportunity to everybody who wants to find a decent, fulfilling job. It has always been the Labour party’s view that unemployment is never a price worth paying.

Let me say at the outset that this debate is not about the technical definition of unemployment. I anticipate that the Secretary of State will refer to the employment figures, and no doubt there will be interventions from Conservative Members telling us that our constituents have never had it so good. I accept that unemployment is at 3.7% of the working-age population, but the cause of low unemployment is not a booming jobs market.

In the last year or so, we have registered some of the lowest growth rates in the G7. The reality is that we are one of the few major economies not to have returned to pre-pandemic employment because of a rising tide of economic inactivity, despite there being around 1 million vacancies in the economy. Across other major economies, labour market participation rates rebounded as restrictions lifted, yet here employment is lower than before the pandemic. Our labour force growth effectively ground to a halt, and we suffered the biggest employment rate fall in the G7—a labour market loss of almost 4%, which is equivalent to 1 million people. Economic inactivity has risen by around 600,000.

Some of that is early retirement among the over-50s, but an increasingly common reason for leaving the labour market is sickness. When we consider both the number who are unemployed and the number who are inactive but who say they want help to work, there are around 3 million workless people in this country who could be in jobs. Indeed, some think-tanks suggest the figure could be as high as 4.7 million. Even though we have a UK unemployment rate of 3.7%, we in fact have a hidden unemployment rate of around 12.1% when we add the people who are inactive and want to work.

This means that 13.4% of the working-age population of Barnsley are involuntarily inactive, according to the Centre for Cities. These are men and women who, with the right help, want to work. It means that 12.9% of the working-age population of Middlesbrough, 12.4% of the working-age population of Doncaster and 12.7% of the working-age population of Mansfield are inactive.

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

Does my right hon. Friend agree that, since the Government came in and cut English for speakers of other languages courses, women from black, Asian and minority ethnic communities in inner-city areas, in particular, have not been able to get into employment? We see that in the figures.

[Jonathan Ashworth]

My hon. Friend makes an important point. I also see that phenomenon every day in my Leicester constituency. There are people who want to work, and who could work if given the right help and support with the English language—particularly women from Bangladeshi and Pakistani-heritage communities—but, because of the cuts that have made ESOL more difficult to access, they are not being given that support and help.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Is my right hon. Friend aware of the study by the Office for National Statistics showing that there could be a significant increase in the overall levels of employment and productivity if there were greater encouragement to work from home, particularly for women who are having to choose between caring and working? They face a cliff edge, but they want to do both. Why are the Government not doing something about that?

[Jonathan Ashworth]

My hon. Friend, typically, anticipates a point I will be making later, but it is clear that certain members of the population could be encouraged to return to work if the correct flexible option was in place, along with appropriate help with childcare or indeed social care. Many people are caring for loved ones—parents and so on.

[Hywel Williams (Arfon) (PC)]

The Institute for Public Policy Research estimates that six out of 10 people who are economically inactive because of illness are economically inactive because of mental health problems. Does the right hon. Gentleman agree that changing the conditions of work, for example, with good childcare, with proper jobs, with proper wages and so on, is the way to deal with this problem?

[Jonathan Ashworth]

The hon. Gentleman makes an entirely reasonable point. We are seeing more and more people being forced out of the labour market, or not able even to enter it in the first place, because of depression, stress or anxiety. If we reform the way in which we deliver employment support, we can get many of these people back to work, because being in work will be good for them in terms of managing their mental health. Obviously, that is not necessarily the case for everybody, but it will be for a significant proportion. The problem is that there are many who want to work, yet under the Government’s approach, which focuses just on the unemployed via the jobcentres, only one in 10 out-of-work older people or disabled people are getting any support. We reject that approach.

[Margaret Greenwood (Wirral West) (Lab)]

My right hon. Friend is making a good speech. For someone with a disability or a long-term condition, simple adjustments in the workplace, such as having a sit-stand desk, so that an office worker does not have to sit down all day, a vertical mouse, to help somebody who has problems with their wrists, or an ergonomic chair, to help somebody with a bad back, can make all the difference in how they are able to manage their health and how happy they can feel in the workplace. Lots of people do not know that they are entitled to ask for reasonable adjustments and that very often these items are available through the Access to Work programme. Does he agree that the Government need to do far more to publicise the support that is out there, so that not only can people get into work, but those in work can maintain their health and stay in work longer?

[Jonathan Ashworth]

My hon. Friend hits the nail on the head. It is not just that lots of people are not aware of the Access to Work scheme, but some people who apply for Access to Work are then faced with the most ridiculous waiting lists. A constituent of mine accepted a job and was told that there was a 26-week waiting list for an assessment. I raised that case with the Department in my capacity as a local constituency MP and I am pleased that the Department has looked at it again, but lots of people will not go to their local MP asking them to intervene, and we want to get people into work. It is no wonder that the disability employment gap is widening.

As a country, we should be aiming for the highest level of employment in the G7. That would mean living standards raised for every household. The reason we want to extend the opportunity of decent work to all is even more fundamental: when one in five people who have left the labour market in the past two years say that they would like to work, we have a responsibility to help them. Behind every statistic is a story of opportunities missed, talents wasted and extraordinary potential left untapped, none more so than for the now 1 million young people not in education or employment. Increasing numbers of young people are out of work for reasons of mental health. We know the long-term scarring effects of worklessness at a young age; it risks a life on the margins. To do nothing for this group of young people, as is, in effect, the case now, means writing them off. Its means tolerating a situation where only about 4% of people in the employment and support allowance support group return to work each year—to me, that is fundamentally unacceptable. It is a massive social cost and it has a massive economic cost as well, as we will see, because the Office for Budget Responsibility is predicting that the health-related benefit bill will increase, costing us £8 billion extra.

[John Redwood (Wokingham) (Con)]

Most Conservative Members would agree with much of what the right hon. Gentleman has said, so will he offer a bit of guidance as to how the Government should go about contacting people in these positions who might want to get into work? What kind of offer does he think would be best to make so that we can engage with them?

[Jonathan Ashworth]

I am grateful to the right hon. Gentleman for that. I will outline a very detailed plan in my remarks. I hope it finds favour with him, because we want to grow our economy, as he does, and getting people back to work is good for them as individuals, it will make our economy more productive, it will sustainably raise living standards—not by going for growth through inflation—and getting people back to work is surely a good thing. I hope he stays in the Chamber, as I am sure he will, to listen to my speech.

The Government say that they gave us kickstart, but it failed to deliver the 250,000 jobs for young people promised. They say that they gave us restart, but it is expected to help less than half the number of people that Ministers said it would, and it is underspent by around £900 million. However, my argument is not simply that the Minister is doing nothing. It is also that what the Government do do, they do not do very well.

The Local Government Association estimated that the Government—I think that this is last year’s figure—spent £20 billion to deliver 49 different employment and skills-related schemes administered by nine different Government Departments and agencies and, yet, despite all that money, these organisational geniuses have still given us a situation where we have 1 million vacancies, 3 million workless, and the worst employment recovery in the G7. That is surely not good enough for £20 billion-worth of expenditure.

What has been the Government’s answer? It is more of the same. They brief newspapers there will be more daily interviews for the three-month unemployed in the intensive work search group, even though the failure-to-attend rate for weekly appointments is already high. It will no doubt mean more CV writing classes, more applying for jobs online that turn out to be duplications and, of course, more sanctions. Of course there should be conditions applied to unemployment—[Interruption.] We have always been in favour of conditions for unemployment benefit—as many of these hon. Members will find out when they go to the jobcentre after the next general election—but what we need for this country is a plan that widens access to employment support for all who want to work, that brings together health and employment support, that addresses the cost and disincentives of moving into work for parents with childcare needs, for example, and that takes account of the different economic needs of the country.

[Beth Winter (Cynon Valley) (Lab)]

My constituency of Cynon Valley has some of the highest levels of economic inactivity in Wales and, indeed, the UK. I welcome Labour’s proposals to fix this broken employment support model. Indeed, I am pleased that, in Cynon Valley, we are piloting some innovative economic models under the community wealth building approach. However, turning to the UK Government, is my right hon. Friend at all concerned about the pilot announced in a written statement yesterday, requiring claimants to attend face-to-face interviews daily for a fortnight, with a threat of sanctions for non-attendance? Is that not a model to discourage claims? Is he also concerned that, following the closure of many jobcentres, jobcentre workers, who are themselves accessing food banks, are now being forced to require claimants to undertake these interviews and to make life-impacting decisions based on economic benefit?

[Jonathan Ashworth]

The problem is that the Government are one-trick ponies. They think that that is the answer to getting people back to work, but what we need is a plan to deal with the economically inactive, not just to apply conditions for those receiving unemployment-related benefit on universal credit.

Different parts of the country face different economic needs. In broad-brush terms, in coastal and some former industrial areas, we tend to see lower labour market participation rates and relatively fewer vacancies. In many parts of London and the south-east, we tend to see higher labour market participation, but also relatively fewer vacancies. In major cities such as Birmingham, Leicester, Coventry and Liverpool, we tend to see lower labour market participation, but often higher vacancies. The point is that different economies have different economic needs. Different labour markets have different economic needs. Instead of nationally contracting to deliver one-size-fits-all employment schemes designed from behind a desk in Caxton House, and instead of forcing Mayors—in the words of Andy Street—to go with a “begging bowl” to Whitehall, we should shift power and resources to local communities because, as the leader of Nottingham County Council, the hon. Member for Mansfield (Ben Bradley), said in a very good Red Box article a few weeks ago:

“Local leaders are too often hampered by the Whitehall knows best approach…Employment support programmes are commissioned based on national guidelines, not local needs…Fixing economic inactivity needs a radical pro-devolution mindset.”

I absolutely agree with him.

[Ben Bradley (Mansfield) (Con)]

I thank the right hon. Gentleman for his kind words and for giving way. I should mention that I co-wrote that article with Adam Hawksbee of Onward.

The right hon. Gentleman is absolutely right. He mentioned Mansfield’s statistics and the high levels of economic inactivity. These schemes are best built with local employers and training providers so that they can be bespoke for those needs, with the flexibility that was mentioned earlier; I am sure he would agree with that. Will he join me in calling on Ministers to pilot that in the east midlands when we get our combined authority next year?

[Jonathan Ashworth]

Absolutely. Of course, a Labour Government will definitely deliver more resources. I hope that we can pilot that in the east midlands combined authority, as well as in the Leicester area—the hon. Gentleman will know what that is a reference to.

[Samantha Dixon (City of Chester) (Lab)]

My right hon. Friend is making an eloquent point about the devolution of this policy area. I draw his attention to the work that Cheshire West and Chester Council has done with work zones across our borough and in my constituency. That work has been really effective not just in getting people into work, but in enabling those in low-paid work to get up the skills escalator. The sort of short-term rigid national contracting that we are seeing from the Government is actively working against the devolution and skills that local employers and local people need. I would be very pleased if he agreed.

[Jonathan Ashworth]

I agree. May I welcome my hon. Friend to her place? This is the first opportunity that I have had to do so. She brings to this House great experience in local government. She knows that local authority leaders, working in partnership with the business community, with those who provide skills, and with civic societies, trade unions and so on, can do a much better job of getting people back to work, which is why we should be shifting resources, be it to the east midlands combined authority, the Cheshire region or elsewhere.

Where that has happened in pockets—such as in Andy Burnham’s Greater Manchester, through the working well initiative—there have been great successes, so we need to shift resources. That is the key to providing a form of universal support, which my friends at the Centre for Social Justice have rightly called for, to help people with complex barriers to return to work. We endorse that approach.

[Hywel Williams]

I am grateful to the right hon. Gentleman for giving way—he is being very generous. We have a Labour Government in Wales. Would he support the devolution of the administration of social security to that Labour Government?

[Jonathan Ashworth]

The hon. Gentleman is tempting me into very choppy waters by offering to disrupt the way in which we provide social security across the country, but I will resist the temptation to go off course.

At a time when local areas should be given more resources to deliver employment support, the Government are cutting resources. Not only did they announce out of the blue in December that they were cutting a scheme that helped those with health conditions to move into work in the west midlands and South Yorkshire—they then U-turned on that a couple of weeks ago—but, as I heard from the Salvation Army when I went to visit an employment project in East Ham this morning, they are also leaving the voluntary sector with no answers about its future because of decisions about the shared prosperity fund.

The shared prosperity fund, which is the successor to the European social fund, helps to fund schemes that support people with complex barriers into work. The European social fund money ends at the end of this year, and there is then a nine-month funding gap until the people and skills element of the new shared prosperity fund kicks in. How does the Secretary of State expect to get more of the economically inactive into work when that funding gap means that voluntary organisations in all our constituencies have no idea how they will fund their work for the best part of a year? That is not the way to go about it, and when the Department leaves those voluntary organisations with no funding, it does not suggest that the Government are serious about getting people back to work.

[Margaret Greenwood]

Will my right hon. Friend give way?

[Jonathan Ashworth]

I will, but then I need to make progress.

[Margaret Greenwood]

My right hon. Friend is making an important point about the shared prosperity fund and the funding gap that so many providers in our constituencies face. I have seen in my constituency the fantastic work they do. The people working in those charities and organisations have huge expertise. Does he share my concern that, if their jobs do not continue, we will lose a wealth of knowledge that is tailored to our local communities, which would be devastating for so many people looking for work?

[Jonathan Ashworth]

It is a crazy situation. In fairness to the Secretary of State—I do always wish to be fair to him—decisions on the shared prosperity fund are made by the Department for Levelling Up, Housing and Communities, but for a Government who say that focusing on inactivity will be a feature of their Budget, the fact that one Department does not seem to know what another is doing does not exactly fill one with confidence.

Shifting resources out of Whitehall would provide greater opportunities to better join up and co-locate employment advisers in health services, mental health services, addiction services and primary care. We know that increasing numbers of people are out of work, not just for depression and anxiety but for traditional musculoskeletal conditions, and if we are to get people back into work, they need to be supported into work. They need to be given the support to thrive once they are in work. This is urgent, because we do not want the increasing numbers who are leaving work as the short-term sick turning into the long-term sick. We know that, once someone is out of work beyond three months, they risk being out of work for a considerable time.

Obviously, some of this is to do with access to the NHS, given that there are 7 million on the waiting list. It is about access to primary care, to help people manage their health conditions, but there is also a role for employment advisers. Indeed, the new frontier of social security reform, in my view, is bringing together health and welfare in a way we have not before. That also means giving people proper occupational health support. In fairness to the Government, a few years ago they endorsed Dame Carol Black’s report on occupational health, and they piloted a Fit for Work occupational health scheme, but they pulled the plug on it before it had time to properly bed in and develop. That was possibly an incredibly short-sighted decision, given the numbers out of work today for reasons of sickness.

We need to reform sick pay, as Labour has consistently called for. We need to ensure that fit notes are about not just signing people off but sign-posting people to help. We need to give people flexible work options, so that they can stay in work. We also need to support women to stay in work with the menopause, as my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) has outlined today. My hon. Friends the Members for Swansea East (Carolyn Harris) and for Leicester West (Liz Kendall) have been elegant and brilliant champions for this.

[Liz Kendall (Leicester West) (Lab)]

Elegant!

[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.

--- Later in debate ---

[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.

[Jonathan Ashworth]

I am the right hon. Member.

[Jerome Mayhew]

Right hon. Member: he is quite correct. It seems that we agree on the concept behind universal credit. When did he experience that damascene conversion?

The Government are providing extra help, not for the unions but for the young, the disabled and those who are termed “the old”—meaning those over the age of 50, which, in my view, is hardly old. For the young, we have halved youth unemployment. We have the kickstart scheme, which the right hon. Gentleman criticised earlier, saying that it did not help 250,000 people into employment. However, it did help 160,000 into employment, including many of my constituents. As for the disabled, 1.3 million more have been employed since 2017. For the old, we have the age-friendly employer pledge and the 50PLUS champions. This is a work in progress, but it shows the direction of travel of this dynamic Government.

More widely, we are boosting support for 600,000 people on universal credit by securing greater access to job coaches. It is this Government who have doubled the number of job coaches, increasing it by 13,500 to give more help to unemployed people wishing to get back into work. I have seen this lately in my constituency. The Jobcentre Plus in Fakenham does amazing work, and the staff say the job coaches are wonderful and do a fantastic job.

There is a great deal to do. There is, for instance, post-covid recovery. We are experiencing a reduction in economic activity, and that position needs to be improved, but I trust that this Government—