Labour Market Activity

Debate between Khalid Mahmood and Jonathan Ashworth

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.