Employment

Lord Freud Excerpts

Wednesday 21st January 2015 Lords Chamber

[Lord Holmes of Richmond]

To ask Her Majesty’s Government what assessment they have made of the latest United Kingdom employment figures.

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

We are seeing a strong, broad-balanced and sustained recovery of the UK labour market. Employment is at an all-time high and the number of vacancies is at a record high. The main out-of-work benefits are at their lowest level since 1990.

[Lord Holmes of Richmond (Con)]

My Lords, average earnings up, unemployment down, more people in full-time—yes, full-time—employment since 2008: this is an economic recovery. Does my noble friend the Minister agree that a high-employment, low-inflation economy is the only way for us to dig ourselves out of deficit and that we need to ensure that everybody is enabled to have meaningful employment—not least young people and disabled people?

[Lord Freud]

One of the best things about this recovery in jobs is that they are going to some of the people who in the past have not taken part in these recoveries. That includes the disabled, where there is a strong improvement of 250,000 jobs over the past year with some 3 million now in employment. We are in a really healthy position in reducing long-term unemployment among youngsters.

[Baroness Uddin (Non-Afl)]

My Lords, notwithstanding the Government’s election bandwagon rhetoric, what assessment does the Minister make of the changes to employment support for disabled people, in particular those with autism spectrum disorders, in light of the Access to Work review by the Work and Pensions Select Committee?

[Baroness Uddin]

I am reading out the details of that Select Committee.

[Lord Freud]

I hope that noble Lords in the House will agree that I was not using rhetoric but gave the facts and figures. As I have just said, disability employment has improved strongly over the past year with 250,000 more disabled people now in work. The employment rate for disabled people now runs at 46%, up 2.5 percentage points on the year. That is strong improvement for the people who need it.

[Baroness Bakewell of Hardington Mandeville (LD)]

Given the encouraging increase in the employment figures, will the Minister comment on the disappointing fall of 84,000 in the 16 to 24 age bracket? Can he give any information about regional variations? For example, is the problem worse in rural areas?

[Lord Freud]

My Lords, one of the myths about the improvement in employment is that it is concentrated in the south, particularly in London. The reality is that the bulk of the improvement—75% to 80% of it—has taken place outside London. The youth figures are extremely encouraging, because youth JSA figures are now running at some of the lowest levels we have seen for many years.

[Baroness Sherlock (Lab)]

On youth unemployment, maybe the Minister could look again at the figures. I welcome any rise in employment, but there are 763,000 young people out of work. Last summer, when the Government scrapped their youth contract wage incentive, youth unemployment started going up straight away and it has now risen for three months in a row. Will the Minister tell the House what he plans to do about it? Maybe it is time for him to look at Labour’s compulsory jobs guarantee for young people.

[Lord Freud]

My Lords, the trouble with Labour plans in this area is that they are extraordinarily expensive. The Future Jobs Fund, on which some of them are based, cost 20 times what Work Experience costs—and that produces just as good results. We cannot afford to have these artificial job creation schemes: we want real jobs in the real economy, and I am pleased to say that we now have the highest level of private sector employment that we have ever had.

[Lord Dobbs (Con)]

May I take this opportunity to apologise to noble colleagues on the Labour Benches, because a little while ago, on the subject of unemployment, I suggested that Labour Governments always end office with unemployment higher than when they went in? Is my noble friend aware that, according to the Office for National Statistics, since the war every Labour period of government has indeed ended with more people out of work? Is he further aware that those same statistics show that every Conservative Government have ended their period of office with more people in work? May I apologise to those on the Labour Benches for not having made that point clear enough in the first place?

[Lord Freud]

I am very pleased to answer my noble friend’s question. I was aware of those figures, and they underline the point: it is how you run the economy effectively that drives the employment figures, not how you manipulate those figures later with odd schemes.

[Lord Lea of Crondall (Lab)]

My Lords, will the Government announce an independent inquiry into the evidence reported in today’s Guardian that Ministers in the Minister’s department have been instructing officials to manipulate the unemployment figures downwards?

--- Later in debate ---

[Lord Freud]

My Lords, I do not need to make an inquiry into that; I can give an assurance right here and now that Ministers have not been doing anything like that at all.

[Lord Winston (Lab)]

I speak as somebody who does not regard himself as a politician. Does the Minister not agree with me that discussions like this come very close to what we hear on a Wednesday in another place? Would it not be much more sensible to look very carefully at the statistics we are discussing and, when we talk about employment and unemployment, to look carefully at how much people earn, and at what kind of job security, and what kind of training, they have? Then we could arrive at a sensible discussion that would reflect much better on this noble House.

[Lord Freud]

The noble Lord makes an excellent point. This is a complicated area. We have had some large-scale debates in which we have had some very interesting contributions from all over the House. One of the most important things that the Government are trying to do is restructure the market so that we have sustained genuine employment. One of the most encouraging figures that we have seen is that the number of untrained people who have moved into the middle section of the market has improved quite strongly over the past four years.

[Baroness Whitaker (Lab)]

My Lords, I welcome what the Minister said about genuine employment, but following the questions from the two noble Lords opposite, which he must have welcomed, can he say what is the median annual pay of those new jobs?

[Lord Freud]

All I can say on what is happening in the market in terms of real disposable incomes is that we are now seeing inflation falling below the level of pay increases. In the latest set of figures, regular pay went up by 1.8%, compared to a 1% rise in inflation in the same period. We have seen some extremely encouraging forecasts. I cite the Ernst & Young ITEM Club forecast that real disposable incomes were likely to rise by 3.7% in 2015.