Employment

Lord Soley Excerpts

Thursday 20th March 2014 Lords Chamber

[Lord Soley (Lab)]

My Lords, I thank the Minister for putting this debate before the House and I share his pleasure at the good news within the employment figures. However, my noble friend Lord Haskel—who, as usual, gives us the benefit of his experience of working in industry and being an employer in the past—is right to point to the dangers of low productivity and low wages. My noble friend Lady Donaghy also made some very forceful points. The Minister might have found her attack slightly critical but if he looks at the figures she produced, I think he will see that they bear further examination.

I say in passing to the noble Lord, Lord Shipley, that yes, the previous Labour Government have to accept responsibility for not regulating the banks and the finance industry much better than they did. However, I would be more respectful of that argument if every other political party, not just in Britain but throughout the western world, had argued for greater accountability of the banks and finance industry. If you strip out the effect of the banking finance collapse you will find that this country's economy has not been in a bad position for a very long time. We need to acknowledge that and get some of the rubbish out of this debate.

I want to focus my comments today on the difficulty that all parties share in addressing the problem of those, particularly young people, but not just young people, who have difficulty in finding a job or maintaining a regular work pattern. My comments follow the direction set not just by my noble friend Lord Haskel but also by the noble Lords, Lord Bilimoria and Lord Giddens, because the science and technology aspect is vital. Changes in science and technology have been a factor in driving the economy forward since the Industrial Revolution but such change is an even bigger factor now.

I do not usually bore the House with my own experiences in life but I should say that my own experiences are one of the reasons why I have always looked sceptically at the unemployment and training issues. I left school at the age of 15 in 1954 and with an appallingly low educational achievement. The first thing that the school’s job officer, as they were then, said to me was, “You look like a nice young man. Why don’t you work in an office?”. So I went to work in the solicitor’s office that he sent me to. The first thing I did was to make the tea and the second was to run messages. That went on for a year.

The great advantage of the 1950s, at that stage, was that there were still plenty of jobs, so after a while I got fed up with my first job and left. You could earn much more on building sites and in factories, and that is what I did. I am not sure that some of those building sites would be open these days after a visit from a health and safety officer. I was quite relieved to discover that one building I worked on in Essex was still standing some years later, although I have to confess that it has been knocked down since. I just hope that that had nothing to do with the young man who was mixing the cement. The reality was that there were plenty of jobs and you could switch around. However, some of the people I knew at that stage did suffer quite long-term unemployment. They were not getting into the job market. Often, it was because of a lack of educational skills.

Just over 100 years ago, in the middle and late 19th century, people became aware of the fact that the abilities to read, to write and to do basic arithmetic were not only good for them but, above all, good for the economy. Those skills enabled them to use the emerging new technologies, and to develop them very effectively. In no way do I want to undermine any attempt to ensure that people leave school with good educational abilities in reading, writing and arithmetic. However, it is a digital economy now, so we need to make sure that everyone who is struggling to get and maintain a job has those skills.

My main question for the Minister is: can we look rather more creatively at how we involve people—not just young people, but particularly young people—in digital training? I do not think that any young person who has had a history of uncertain employment—let us use that phrase rather than “unemployment”—should be allowed to go through the employment agencies without addressing the questions, “What skills do you have and what skills can we give you?”. The same applies to many of the other government departments and the organisations that work with government on this. The same questions should be asked. Do they have the basic skills? “Basic skills” does not mean just being able to use a computer. It does not mean just being able to search the internet. It means an ability to operate in a much more complex area, including the increasingly important one of coding.

I can give a simple recent example. Some youngsters I know who had literally just left school and did not have jobs painted T-shirts and shoes which they had bought and on which they then applied special designs. They sold them at school fetes and charities for anything up to £100. It was pretty impressive. They were certainly able to use computers and they knew how to use the internet but they did not have the digital skills to design a website where they could sell these items. We need to remember that many of the new industries can be run from home; it is much easier to do it now, but not easy unless you have those digital skills. With some basic training, could not those young people have done it? They had computers at home, so they had the technology sitting there, but they could not design websites and therefore promote sales in that way. That is one of the ways forward. I had a conversation the other day with the noble Baroness, Lady Lane-Fox, in which she drew my attention to an organisation called Go ON UK—which I know has been in contact with the Government. It is saying that that is precisely what we need to do. When young people—or older people, because we should not describe this issue only by age—go to a jobcentre or other government agency and their technical skills, such as coding, are assessed, training should be offered immediately to those who do not have the necessary skills.

I would go so far as to say, given the Minister’s involvement in the benefits area, that there ought to be a way that we can offer financial help or recompense—I would almost dare to call it a bribe—for such training. A lot of this is about a lack of confidence, which is particularly true of older people. If you do not have the confidence to use the internet well or to use IT to create, run or work for an existing business, the right training can give you the confidence. As I said, financial support might be needed to encourage that. We need to look much more creatively at this because, for all the reasons that the noble Lord, Lord Giddens, gave, we are looking at an economy which is much more driven by science and technology than ever before. Perhaps I may expand on my example of the late 19th century, when people began to recognise that reading, writing and arithmetic was good, and speculate that if we fast forward a hundred years from now, people will look back and say that we were only just becoming aware in the early 21st century of the importance of digital skills.

There is an opportunity here for Governments and for political parties of all persuasions to look at the way in which new technologies are used to enable people to earn an income wherever they are in life. I want my own party to look into this and it is very encouraging that it is doing so. We have got very much better at this with people with severe disabilities. There is now much greater help in this area. No person should get through an employment agency or some of the other agencies without us gaining some idea of the digital skills which that person has, what more could be offered to them and how they could be encouraged to take up those skills.

--- Later in debate ---

[Lord Freud]

Not by that much—not by a factor of 30, or whatever it is.

The noble Baroness, Lady Turner, spoke of her concerns about childcare. We have also been concerned about childcare. Clearly, not only will she have seen the announcement yesterday about the money for taxpayers but she will have also spotted that within universal credit the rate will now be 85%. I know that she and a lot of other noble Lords will welcome that.

My noble friend Lord Soley mentioned skills. I am sorry, he is not my noble friend: I quite like the noble Lord, Lord Soley, but cannot call him a noble friend. On skills, our priority must be to get English and maths training first. One of the things we are doing with universal credit is ratcheting up the requirement for getting people to the basic level of digital involvement. We are doing a lot of work currently to work out how to help people to get to that basic level. The noble Lord is looking at a slightly higher level—into coding. That would be something separate.

[Lord Soley]

I understand what the Minister is saying. However, many people who are not good at reading, writing and arithmetic actually have quite good keyboard skills, but that does not get picked up. You can see that with kids. My noble friend on the Front Bench leading for the Opposition referred to ex-prisoners. If you look at their digital skills they are actually very good but they are not targeted in a way that enables them to do jobs.

[Lord Freud]

That is a very good point. I looked a couple of years ago at a scheme that went very specifically for youngsters who had failed in the conventional exams-based syllabus. They were given a chance by various companies to work on computers. Actually, some of them did very well and it was a new recruitment line because they were just tuned that way. There is something very real there that one could probably expand.

My noble friend Lord Shipley—he is indeed my noble friend—raised procurement. That is a matter for the Cabinet Office. I will not predict anything for the next year.

On zero hours, people are more likely to be satisfied than dissatisfied with their hours, mainly because the flexibility suits their current circumstances. While there has been an increase in the estimate, that does not mean there has been a recent increase over that period in the number—as the noble Baroness, Lady Sherlock, would accept. The implication is that, even using the very largest estimate, we are talking about only three in every 100 workers. We are looking currently at making sure that the zero-hours system is appropriate and not abused. That is in hand at BIS.

We accept the point on the enforcement of the minimum wage. Employers who fail to pay can now be publicly named and shamed. That is on top of financial penalties, and civil and criminal proceedings for the most serious offenders. The minimum wage will rise by 3% from October this year to £6.50. That will produce a pay increase for more than 1 million people—the largest cash increase in the minimum wage since 2008.

It is clear, as my noble friend Lord Shipley said, that the Government inherited a very damaged economy, with high levels of unemployment and inactivity. We are now getting back on our feet. The better news on the economy is feeding through to an improving picture in the labour market. As a result, the number of people in work has now exceeded 30 million. We have record numbers of men and women in work and the highest female employment rate on record. As I said earlier, excluding students, we are now at an all-time peak in the employment rate and inactivity is the lowest on record. Given the context of what we have been handling in terms of the recession, that is an extraordinary achievement.

Despite the difficult global economy, over 1.3 million people more now have a job than in 2010—600,000 more than at the peak before the last recession. There are 1.7 million more people working in the private sector. Despite contrary perceptions, the rise in employment—both over the year and since the election—has been dominated by full-time permanent jobs. Things are still looking up. According to the OBR, the economy is expected to grow by 2.7% this year and the number of people in work is expected to increase by 3.3% by 2018. That does not take us quite to the figures I was working with when I wrote my report in 2007, but it does not leave them that far short.