Jobseeker’s Allowance

Lord Freud Excerpts

Monday 21st July 2014 Lords Chamber

[Lord Brabazon of Tara]

To ask Her Majesty’s Government what assessment they have made of the latest employment data released by the Office for National Statistics; and what implications that has for the number of claimants of Jobseeker’s Allowance.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, the employment rate has never been higher and the inactivity rate has never been lower. There are a record 30.6 million people in work and the number of people claiming jobseeker’s allowance has fallen for 20 consecutive months. It is down by more than 400,000 on the year to 1.04 million.

[Lord Brabazon of Tara (Con)]

I thank my noble friend for that reply. Can he confirm that those excellent figures are spread across the whole country, not just London and the south-east as some might have us believe? Will he also comment on the leader in last Thursday’s Times, which suggested that part of the responsibility for the reduction in unemployment lay with the Government’s welfare changes?

[Lord Freud]

Since 2010, 1.8 million people have got jobs. Nearly 80% of that growth was outside London, with all regions being up in that period. As for the role of benefit reforms in our economic recovery, my view—this is something that statisticians will work on for some time—is that we are beginning to move into some of the structural problems that we have had for many years now, and are moving through the cyclical effects into those structural requirements.

[Lord German (LD)]

My Lords, the jobseeker’s allowance is being subsumed into universal credit. Universal credit is being moved along and rolled out slowly; it is much better to get it right than hastily to put something in place that goes wrong. However, it is having a significant impact on the number of people who are being helped and getting into work. Will my noble friend help the House by identifying what the impact would be of the Labour Party’s proposal to hold up and stop the rollout of universal credit on those who are seeking jobs in this country and those who are getting help from joining universal credit?

[Lord Freud]

I think it would be pointless to slow down universal credit, which is now rolling out smoothly. This year, we are rolling it out right the way through the north-west, moving through couples and families. Any delay to that process withdraws support from the people who need it. We have, however, rolled out the claimant commitment, which is part of universal credit, right through the country. The whole drive of that reform is to help and coach people into work, and that seems to be having a good effect.

[Lord Bradley (Lab)]

My Lords, the Minister will no doubt have seen the recent report from the Resolution Foundation suggesting that the extent of the fall in real wages has been underestimated due to the rise in self-employment. What steps are being taken to ensure that we have an accurate assessment of real wages?

[Lord Freud]

The self-employment figures are up strongly, but I need to point out that 60% of the gain in self-employment since 2010 has been in higher-skilled, managerial and professional jobs. It is interesting, when you look at real, living wages, that recent settlements have moved above inflation. There is a lot of variation within the pay settlements, and those in finance and business services have fallen by 0.7%, whereas the figure for retail is up by 2.2% and for manufacturing by 1.8%, running with or above inflation. Some of the suffering being seen in the City is something that I suspect the party opposite would not weep too hard for.

[Baroness Wall of New Barnet (Lab)]

My Lords, can the noble Lord share with us how many of those jobs will lead to a strong career? For instance, how many lead to apprenticeships, and how many of those jobs give young people the aspirations to go on and make a career for themselves, rather than having a job for a very short time, perhaps without a permanent contract? There must be figures that show that. The importance that this and the previous Government put on apprenticeships must prevail for those permanent jobs to be gained.

[Lord Freud]

Apprenticeships are a cornerstone of this Government. Overall, we have had more than 1.1 million extra apprenticeships for youngsters since the election—a 40% increase on the equivalent period before the election, although I acknowledge that the previous Government were also pushing up the apprenticeship rate.

[Lord Flight (Con)]

My Lords, the figures on employment are extremely good news but the data on productivity, so far, are not quite such good news. Does the Minister have any views on why productivity has been so slow to increase? Might it have anything to do with Labour’s tax credits subsidising wages?

--- Later in debate ---

[Lord Freud]

A vigorous debate is going on among economists about what has happened to productivity. The most interesting study that I have seen lately was from the noble Lord, Lord Goodhart, and one of his colleagues, which looked at productivity as a cyclical impact, which we should be able to get through later on.

[Lord Foulkes of Cumnock (Lab)]

My Lords, since this Question and Answer show all the features of very careful preparation, I am sure that the Minister will be able to answer this. What percentage of the jobs that have been created are: first, part time; secondly, minimum wage; and thirdly, zero-hours contracts?

[Lord Freud]

I did not need a huge amount of preparation for this Question because it is a slam dunk. The figures for employment are very good. If you are looking at part-timers, the number who do not want to be full time are down by 1.5 percentage points—the fastest decline on record. Depending on the figures you take, we have between 2% and 4% of people on zero-hour contracts, and the CIPD says that people on those contracts are as satisfied with their jobs as people on other contracts.

[Lord Forsyth of Drumlean (Con)]

Does my noble friend share my disappointment that the Opposition can do nothing but carp at this very good news on jobs? Could he remind us what the shadow Chancellor predicted would happen to unemployment as a result of our policies?

[Lord Freud]

My noble friend asks me to remind the House that the leader of the Opposition predicted a million job losses as a result of our policies. I am very happy to remind the House of that fact.