Economy: Sustainable Jobs

Lord Kirkwood of Kirkhope Excerpts

Thursday 27th June 2013 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, it is a signal pleasure to follow the right reverend Prelate because I agree with every word that he has said. He was absolutely correct to concentrate on the contribution that social enterprises can make to our economy. I can say that as a non-remunerated, non-executive director of the Wise Group in Glasgow, which is a social enterprise that has been involved in employability for the past 30 years. It adds value to the provision of support for unemployed people in a way that I think other more statutory government bodies struggle to do. I am very pleased to endorse everything that the right reverend Prelate has said.

This is a very timely debate. I add my congratulations to those already offered to my noble friend on securing the time. I want to take a slightly different approach to the debate and I want to start by making a political point. I hope I can carry the House with me on this but I am very concerned about the potential stigmatisation of the unemployed. In my experience, which is mainly derived from my work in the Wise Group, people in households that suffer worklessness are strivers as much as anyone else and they try to better themselves and their families.

Of course, I have been in politics long enough to know that a game is played but I do not say that pejoratively. I know that there are points to be scored in the public debate in trading positions and policies as part of the coming and going of politics, but I am worried. I have been concerned about this policy area for some time and I have never known the psychological effect to be so bad on people who suffer unemployment. My plea to my noble friend on the Front Bench—this is certainly not directed at him personally, as he knows—is that he will take the message back from me, if from no one else, that we need to be careful about our use of language.

The second thing that I want to talk about is the environment of unemployment and welfare-to-work, which has substantially changed, certainly since I was initially elected to the House of Commons in 1983, and whose development I have been following during that time. It is now harder to make work pay. Colleagues are probably now familiar with the substantial change that is encapsulated by the fact that the majority of poor, working-age adults and children in the United Kingdom now live in families containing at least one worker. That is a hard prospect for policymakers and none of this is easy. The adage that we all used to hide behind, because it was true 10 or 15 years ago, that you could work your way off benefits and out of poverty is not necessarily true at all. We therefore need to weigh that in the balance when we make changes.

The environment that we are now in is characterised by no guarantees of secure work in contracts of employment. The labour market that we now face has a problem about low wages, temporary jobs and zero-hours contracts, which used to be peculiar employment devices used in proper circumstances and for understandable reasons in industries such as hotels, catering and entertainment. These contracts are now being used much more widely, including in education and health. If we do not recognise that, we are not properly doing our job as policymakers. It has also been suggested to me that a massive 20 million hours a month of underemployment persists in the United Kingdom labour market. That is completely new and none of us has properly started to address it in a way that is necessary.

I wish to make a final point about the context because I have noticed from working with a client group in Glasgow that the level of uncertainty about being in work has changed significantly. Even if you can get people off benefits—and you can if you give them proper support—they go into a world of work that is full of uncertainty. It has one of the most destabilising effects on households because you never know just how long it will be before you are going to have to switch back to benefits, low-hours contracts or low-pay contracts. I accept that universal credit will help, at least in theory, if we can introduce it safely and as soon as possible. However, we need to do more to address uncertainty in the workplace, which is a serious problem.

I listened carefully to what my noble friend Lord German said about the Work Programme, of which I have some experience. I am interested to hear that the figures for the second year of the programme are now available. I should be grateful if my noble friend, if he has the figures, could differentiate between the minimum performance levels that are in the contracts for the prime providers—levels that I have always thought were unrealistically high; and the DWP was not sensible in setting them at these levels. As far as I can recall, the JSA 25-plus minimum performance level for providers was 27.5% of the referred group, the JSA 18-24 cohort figure was 33%, and the ESA caseload was 16.5%. These are not targets. DWP expectations were much higher. I have not had the benefit of access to the latest figures and I look forward to studying them as soon as the debate concludes because I am interested, but I should be reassured if my noble friend could confirm that if the minimum performance levels are not reached by prime providers their contracts will be re-examined. That was the promise made: if they did not reach these levels in year two, the contracts would be at risk, and rightly so because the figures for the first year were de minimis. That was perhaps understandable in year one but we would be looking for serious progress in year two. I am not satisfied that we are looking at only minimum performance requirements. We should look at the DWP expectation levels for these client groups in order to test whether we are making progress in the Work Programme.

It is also foolish for the DWP to offer people who have done their two years on the Work Programme and have still not found work to the Troubled Families programme run by the department. These client groups are chalk and cheese. The Work Programme people are there because they are required under the jobseekers commitment to be there. The Troubled Families initiative, which I support and was pleased when it was given extra money from the Government in the past few days, is a voluntary programme. In my experience, you cannot put conscripted people into a programme that was originally designed for volunteer clients and have any expectation that it will succeed. That idea needs to be rethought.

Finally, given the £248 million underspend on the Work Programme—I think we can all understand that an underspend might be a consequence of not having as many people on the unemployment lists as we had anticipated in the first year—can my noble friend confirm that the full amount for the programme will be spent supporting moving people from benefits into work? It is a flagship, essential and crucial programme, and I wish it well. I support it but I have some serious concerns about how it is being implemented. In fact, it may well be that we should talk to colleagues on local authorities about increasing their involvement in delivering and implementing some of these national programmes, some of which have been more successful than others.

I wish briefly to raise two other matters before I sit down. First, can we work more with employers? It is absolutely right that we concentrate on supply-side measures, upskilling people, and helping people who are furthest from the market. There remains a problem of “parking and creaming” in some of the schemes and I understand that we will need to address that issue. However, can we get alongside employers more systematically? They need help as well if they are offering contracts of employment to people who have sometimes been out of the labour market for more than two years. That would be a development that would help the Work Programme to improve and be more successful.

Finally, there are three priorities, all of which have been touched on by colleagues in their excellent speeches in this debate in which I am pleased to take part. The three priorities for me include youth unemployment, which affects just shy of 1 million young people. They in particular suffer from the precariousness of unemployment—and employment, even when they get jobs. We really need a concerted cross-party approach to youth unemployment. Also, nearly 36% of the caseload is made up of people in long-term unemployment. It is a proxy for household distress, which the Troubled Families programme is beginning to address. If people are unemployed, have been through the Work Programme for a full two years and still cannot find their way into the labour market, we should treat them more holistically. A multiagency approach such as that provided in the Troubled Families programme—it is a horrible name and I wish we had a different one—is important. Finally, there is the hard-to-reach group, who are the third category of clients whose chances we need to do more to improve in the future.