Employment Rates

Luke Pollard Excerpts

Wednesday 6th June 2018 Westminster Hall

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

I congratulate the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) on securing this important debate. Sometimes we do not get into the nitty-gritty of the stories behind the statistics, so I would like to focus on that today. In particular, I will focus my remarks, as would be expected of a Plymouth MP, on the experience of Plymouth, which, as we know, is the centre of the world. However, I also want to delve into the statistics and to look at unemployment not in isolation but as part of a basket of measures, because there needs to be greater focus not just on one raw indicator, standing in isolation, but on the broader picture if we are to safeguard the job creation, stability and quality of employment that we all want to see throughout the country.

Unemployment statistics are only one part of the picture, and I am always a bit cautious about Government statistics, whether they were produced under the coalition or the current Government or, indeed, when Labour was in power, because they are designed to tell one part of the story only. Although the overall jobless figures may be falling, which is to be welcomed, in-work poverty, insecure employment and the use of zero-hours contracts are rising. Food bank use is up. The housing crisis continues, and the welfare system continues to be cruel, all too often creating poverty and worry, where it should be achieving the opposite.

[Michael Tomlinson]

The hon. Gentleman will forgive me for interrupting him so early in his remarks, but I want to take him back to what he said about Government statistics. I agree that we should be cautious and have a healthy scepticism about statistics, but, of course, the statistics under discussion are ONS statistics, not Government statistics, so perhaps we can lend them greater weight than a sceptical public otherwise might.

[Luke Pollard]

Indeed. The hon. Gentleman makes a good point. How statistics are presented by Government can sometimes devalue some of the credibility that the original source may provide, and I am sure that we can all bring to mind examples of that. On the subject of statistics, I am a great believer in the way inflation is calculated. If hon. Members will indulge me for a few seconds, I will explain. Inflation is calculated by taking a basket of measures, of everyday goods, and calculating the inflation rate based on the real-world experience of many measures, many goods, not just one of them. In that sense, a basket of measures can create a fuller, more thorough illustration of what is actually happening.

The reality gap between individual employment statistics and the lived experiences, especially of young people, would be addressed much more thoroughly by having a basket of measures than by focusing just on the jobless figures or any other singular reality. I suggest that when we look at how we talk about unemployment statistics, employment statistics and debt, we look at a basket of measures, which needs to include employment, wages and wage growth, in-work poverty, child poverty, homelessness and temporary housing, disposable income, the number and penetration of zero-hours contracts and especially their demographic targeting, benefit take-up, sanction levels, household debt and overall personal indebtedness. Perhaps those things could be wrapped up together as a new basket of measures whereby we can look at the lived experience of people in employment, because all too often the fact that someone is in a job and that there is a tick beside that box is what is presented by Governments of all colours. We know that the lived experience of people in work, especially in today’s economy, where simply having a contract does not guarantee that someone will get any wages at the end of the week or month, devalues some of the credibility that the jobless figures or employment figures may have carried in the past, when employment was more secure and long term.

[Matt Western (Warwick and Leamington) (Lab)]

My hon. Friend is making a very important point. I thank the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) for initiating the debate. My hon. Friend discusses a basket of measures. Does he agree that one thing that we would want to establish, if it was a business that we were looking at, would be the number of hours being worked by those in work—that is, the number of hours or days available to work? That could be one of the measures showing that we actually have significant under-employment in this country and that, rather than a jobs miracle, we have something of a jobs mirage.

[Luke Pollard]

My hon. Friend has a way with words. Looking at the measure to which he refers as part of the basket of measures could well be useful. Indeed, we might also look at the number of jobs that individuals have, because although we have seen a rise in the number of people with contracts, many of those are part-time contracts, and people in Plymouth have certainly been telling me of needing not just one job but two, three or, in some cases, four or five jobs to pay their bills, because of the insecurity of those jobs and the hours they provide. Consideration of all those measures together would make possible a more informed value judgment about the state of the economy.

In recent years, we have seen a rapid shift towards a gig economy, and despite calls for an end to zero-hours contracts, many people are still struggling with the precarious nature of those contracts. There are some people who value zero-hours contracts, but my fear about what has happened with zero-hours contracts is that their utility for that small group of people has been overtaken by employers using them as a way of being more flexible with their workforce or cash flow. As a consequence, the utility of those contracts for a small number of individuals, because of the workplace flexibility they provide, has been eroded because they are being used to devalue secure work.

Before I came to the debate, I posted on my Facebook page—if anyone has not visited it, the address is facebook.com/LukePollard—to ask people what their experience was. I said, “I am going to a debate about employment statistics. Can you tell me your stories?” Normally on my Facebook page, I have a few regular posters, as I am sure other hon. Members do. What struck me about the response to this post was how personal, emotional and honest people were in telling me their experiences. If hon. Members have not done this on their own Facebook page, I encourage them to do so, because it helps to create a fuller picture.

Let me give some examples of what people said. Erin, who is one of my constituents, is a qualified secondary school teacher who has been forced to take zero-hours contracts by an employment agency for the past three years. She told me that, despite years of training, she was struggling to find permanent work, and that that has impacted her ability to pass the tenancy checks required for private renting. The figure for private renters in Plymouth, Sutton and Devonport is 43.5%, which shows just how important that can be. Erin now plans to leave the teaching profession for good and will be retraining in September. She is just one example of someone we need to retain in their role with more secure work.

Melanie is another example. She worked for three years at Royal Mail in Plymouth. She was on a fixed-term, 20-hours contract that was reviewed every six months. As a single parent, she spoke of the stress that the uncertainty of that brought, as she could never be sure that she would still have a job once the end of her contract rolled around. Although Melanie has managed to secure permanent employment elsewhere, her story is not uncommon.

Those types of lived experience are the stories behind the statistics. I am talking about the frequency of needing to go to another interview to get extra hours and then the concern and worry about what happens if an employer wants their hours to coincide with another employer’s hours. Those are concerns that many in this Chamber may not have experienced themselves, but they are genuine worries for many people up and down the country. That situation is adding to the complexity and inequality within our system.

Colleagues will know of the problems that universal credit has brought to the system. Indeed, the House of Commons Library points out that the roll-out of universal credit, which is taking place in part of the area that I represent but not all of it, skews the jobless figures for this period, so looking behind those figures is a little more complex and complicated than it might have been before universal credit was rolled out. I ask the Minister whether there is a way of navigating through that complexity and that added dimension to see what the underlying picture is. The roll-out of UC complicates that and affects our ability to get an accurate sense of where we are.

Universal credit is failing many people. We know the experiences that have been shared in this Chamber and elsewhere. Our benefits system should not allow people to spiral into more debt, and I am concerned about the sustainability of the system in its current form. Concerns around UC and the roll-out on to UC, especially for people in insecure work—although they may not be in the jobless figures that the Government provide—need to be addressed.

We also need to look at in-work poverty. I believe it is fundamental to most people’s reasons for entering politics in the first place—be they on the red team or the blue team—that they want to make the world a better place. The only disagreement I perhaps have with colleagues on the Conservative side is how to do that. In-work poverty should be anathema from the perspective of the Labour party, the Conservative party and other parties as well. We all aspire to help people into work so that they can provide for their families through the hard work of their own labour. If someone is in work and still unable to provide for their family, something is wrong with our economy.

We know that that is the case in Plymouth and elsewhere at the moment, because we are seeing a rise in food bank use. One day I hope that we will no longer need food banks and that the fantastic volunteers who staff them can be redeployed to other endeavours. However, I know that food bank use is going up, and having seen the work of the fantastic soup kitchens and soup runs in Plymouth, I know that demand is increasing among not just rough sleepers, but those in insecure work and temporary accommodation, who cannot make ends meet and who struggle to feed themselves and their families.

I highly recommend that Members of Parliament and those watching at home go out on a soup run. It is an eye-opener in terms of the lived experiences of those in our communities whom we may not see during the day. When they are handed a pasty or a banana from the back of an old Transit van—as happens every now and then in Plymouth—they give back stories and gratitude. It is a really humbling experience to see people who, in many cases, are now in work but still struggling to make ends meet.

We need safeguards to help those who are struggling to break into the job market and permanent employment, as well as to help those who are in the job market by making sure that work can truly pay. That is not where we are at the moment, and that is especially true for those with disabilities. One of my constituents, Jo, who works in the employment sector, told me that the job opportunities advertised for students and graduates often involve temporary contracts in low-skilled roles. Similarly, Mat, from Plymouth, shared his experience of having high-functioning autism and described his job search as “impossible”. That should shame us all. The challenge for us is how and where we present job adverts, what the employment process is and the jobs themselves. I am concerned that the lack of opportunities is impacting people in Plymouth on a personal and economic level, and we must act to contain the ongoing effects of not only unemployment, but under-employment and the impossibility of getting employment in many cases.

Many hon. Members will know of my desire to talk about transport. I occasionally talk about trains in this place. Connectivity for the far south-west is a complicating factor in the economic performance of Plymouth and the wider south-west economy, as it is for many other parts of the country. The investment we need in structural transport, both on road and rail, and bus services within cities, can open up and transform job opportunities.

I want to talk about buses for a moment, because when we look at under-employment, one concern that a number of people tell me about is that, without a car, they are sometimes unable to get to their workplace. That is because there is no public transport available or the buses stop at a certain time. That is especially true of low-wage service work. The hon. Member for Mid Dorset and North Poole talked about our hospitality sector. Without decent public transport, it is impossible for those people to get to shops, tourist attractions, cafes and restaurants early in the morning to provide sleepless people with their coffee on the way to work. The concern is that that means some people are spending their already low wages on taxis to get to work before the working day has started, eroding the value of that day’s work for them.

There is a lot we need to do to look behind the statistics. I encourage the Minister to look at whether a basket of measures could be more appropriate. To an extent, the debate as to what goes in that basket of measures—just as the debate as to what goes into the inflation measure—tells a story about our modern Britain. For example, when we take a record player out from the basket of inflation measures and put in an MP3 download, we can see the way the economy is changing. That same principle should apply to how we look at employment statistics and the lived experience of people seeking employment or in employment. One day I hope we will be able to take out sanctions and food bank use from that basket of measures. That should be a collective aspiration for all parties. Until the time when they are no longer in use, we should feature those as part of that collective basket of stories—that human lived experience—that sits behind the unemployment statistics. There are many other things we could add into that basket, such as mental health provision, which I have not spoken about, but I hope colleagues might add to the list in the debate.

So I ask the Minister whether the Department has considered a basket of measures in how it presents these stories, and I encourage all hon. Members to do as I did on my Facebook page and to get the lived experiences of constituents, because it is the most powerful and humbling experience.

--- Later in debate ---

[Alok Sharma]

Frankly, any kind of bullying and any such acts are completely unacceptable, whether someone is on a zero-hours contract or a full-time contract. As the hon. Lady knows, there are avenues open to people, but if she has specific cases, she is welcome to come and talk to me about them. It is important that we have flexibility in work patterns, which is what zero-hours contracts allow, but it is also right that the Government have banned exclusive zero-hours contracts.

We have discussed employment outcomes by groups. If we look at some of the groups that have historically been under-represented in the employment market, we have seen a significant improvement in their participation in the workforce. The hon. Member for Edinburgh North and Leith (Deidre Brock) welcomed the record high of 71.2% in the female employment rate, which I of course welcome as well. There are now more than 3.8 million people from ethnic minorities in work—an increase of 1.1 million since 2010. The ethnic minority employment rate currently stands at 65.1 %, which is a record high. However, I completely accept that the employment gap between ethnic minorities and the white population is too high, at 12%, and we are working to address that. If I have time, I will talk about the response to the race disparity audit.

My hon. Friend the Member for Ayr, Carrick and Cumnock talked about disabled people. We have seen a welcome rise in the employment of disabled people—600,000 in the past four years—to around 3.5 million people today. He also talked about the Disability Confident scheme. More than 6,000 employers are involved in that and in Access to Work support. That is really important in encouraging everyone in our country who aspires to work to have an opportunity to do so.

My hon. Friend the Member for Mid Dorset and North Poole made a powerful opening speech and highlighted the excellent work of the all-party group on youth employment, which he chairs. He has shared with various ministerial colleagues reports from inquiries that the APPG has conducted. Of course, I would be delighted to come to the APPG to discuss its work and to meet the youth ambassadors, who I am sure will ask challenging questions. As my hon. Friend highlighted, we have made progress on youth employment. The employment rate for those not in full-time education stands at 74.9%, and youth unemployment is down by 40% since 2010.

My hon. Friend made international comparisons, some of which I will repeat. The UK youth employment rate is 18.3 percentage points above that of the euro area and more than 16% above the EU average, but of course I agree with him that we need to do more. We therefore have a skills agenda, with a focus on apprenticeships and technical education. Colleagues have talked about the youth obligation support programme, which started in April last year, and about the ability to get work experience. We have also been encouraging work-based academies, which I think have been very successful.

My hon. Friend talked about whether there should be better working across Government on these issues. Of course, many are joined up. I can confirm that we have a number of taskforce initiatives where Ministers work together. He will be pleased to know that straight after this debate I will be having a meeting with the Minister for Apprenticeships and Skills to discuss precisely these issues.

The Government are funding lifelong learning pilots, investing in a national retraining scheme, and delivering basic digital skills and careers advice for older workers who need them. We are also ensuring there is support to assist those with a health condition or disability, to make sure they are able to access the support they need to move into work.

On the cost of living, I know that all Members will welcome the fact that the ONS reported last month that salaries are starting to outpace inflation. I certainly want to see that very welcome trend continue. We absolutely recognise that people need additional support with living costs, and we have been providing that support. We have recognised that high childcare costs can affect parents’ decisions to take up paid work or increase their working hours. That is why, by 2019-20, we will be spending around £6 billion a year on childcare support. That includes 30 hours’ free childcare for working parents of three and four-year-olds. Within universal credit, claimants are eligible to claim up to 85% of their childcare costs. The outcome from independent evaluation in areas of early introduction shows that, with increased childcare support, parents are able to work more flexibly and increase their hours. We are championing shared parental leave and have introduced a right to request flexible working.

My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) welcomed the increase in personal allowances, which means that a typical basic rate taxpayer now pays more than £1,000 less in income tax than in 2010. We also introduced the national living wage in 2016, which increased by 4.4% this April. Thanks to the national living wage, full-time minimum wage workers have had a boost of £2,000 since 2016.

Numerous colleagues, including the hon. Members for Edinburgh North and Leith and for Plymouth, Sutton and Devonport and my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk, talked about job quality and the Matthew Taylor review. Although we need to continue to work to maintain high levels of employment, I absolutely agree that we must also address the important issue of job quality. Among its recommendations, last year’s Taylor review asked the Government to focus on the quality of work and to identify a set of measures to evaluate job quality.

A strand of the Government’s industrial strategy has a focus on the creation of good jobs and greater earnings power for all, so the Government have outlined five foundational aspects of good work: overall satisfaction; good pay, which includes perceptions of fairness relative to one’s peers; participation and progression in the workforce, which includes the ability to work flexibly and acquire new skills; wellbeing, safety and security at work; and voice and autonomy in the workplace. It is self-evident that if people feel a sense of control over how they carry out their job, they will generally feel much more positive about it. The Government are working with experts to identify a set of measures against which we can evaluate quality of work, and I certainly look forward to the outcome of that work.

I have time to go through a number of points that colleagues have raised. My hon. Friend the Member for Mid Dorset and North Poole talked about the hospitality industry, and we absolutely want to see a strong and vibrant hospitality sector. I recently met Brigid Simmonds, chief executive officer of the British Beer & Pub Association, to talk about the hospitality sector. In February this year, the Department for Work and Pensions ran the annual Hospitality Works campaign, which aims to raise awareness of the thousands of great career options that exist in the sector and to showcase some of the key employers we work with.

[Luke Pollard]

Yesterday, in Question Time, the hon. Member for St Austell and Newquay (Steve Double) raised the issue of introducing a seasonal hospitality workers scheme similar to the agricultural workers scheme. The one thing we know is that, after Brexit, there is a real risk that many roles in the hospitality sector could be eroded by the lack of available labour, which would impact on the domestic market, as well as on incoming tourists. Will the Minister briefly reflect on that?

[Alok Sharma]

I am, of course, happy to reflect on that. Perhaps it would be useful to have a discussion with the hon. Gentleman after the debate on any thoughts that he may have.

The hon. Gentleman mentioned the claimant count, which is down significantly in his constituency from 2010. However, the claimant count is no longer a consistent indicator. The ONS has acknowledged that and removed it from its monthly labour market statistics. As he will know, we have launched a consultation on a new measure, and I hope that he and all colleagues will take part in that. Previously, the claimant count looked at people purely on jobseeker’s allowance, whereas now, with universal credit, which is both an in-work and out-of-work benefit, those numbers are increasing. They do not necessarily have a bearing on what is going on in the labour market, but clearly we need a consistent set of figures. I hope that colleagues will respond to that consultation, which closes on 21 July.

The hon. Gentleman also raised the issue of in-work poverty for working-age adults. Whichever way one looks at it, poverty rates, whether relative or absolute, or before or after housing, are lower than in 2010. Adults in workless families are four times more likely to be in poverty than those in working families, which is why we are keen to see more people move into employment.

The hon. Gentleman also mentioned people with disabilities. I have talked about the Disability Confident scheme and the Access to Work scheme. The number of people with disabilities in work has increased significantly over the last four years. That is something that both he and I greatly welcome. He also made a point about having a basket of measures. The Government already use a range of measures to assess labour market performance. We look at not only employment rates, but pay and productivity, security of work, and employment by labour market group—we have already talked about women, people from ethnic minority backgrounds and older workers.

My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk raised the issue of productivity. That is an important point, in the sense that our productivity levels have lagged behind those of some of our peers for a long time. That is why we now have a national £31 billion productivity investment plan, focused on exactly the sort of issues that colleagues have been highlighting, such as housing, physical infrastructure, digital infrastructure and, of course, research and development.

The hon. Member for Edinburgh North and Leith mentioned the working relationship between Westminster and the Government in Scotland. Actually, I have had a very good set of conversations with the Minister for Employability and Training in Scotland. In fact, when we spoke about Fair Start Scotland in our last conversation, he highlighted that as an example of the UK Government and the Scottish Government working well together. Of course we want to work together, but it requires both parties to come to the table when there are decisions to be made.

The hon. Member for Wirral West talked about the gender pay gap and the race disparity audit. That audit was conducted under a Conservative Government, by a Conservative Prime Minister who cares deeply about the issue. It is the first time that such an audit has happened, and I know the hon. Lady will welcome it. In terms of the plans we have to assist people, we have identified 20 challenge areas where the employment gap between the white population and the black and minority ethnic population is quite large. We are looking at a number of pilot schemes to see what can eventually be rolled out across the country.

The hon. Lady talked about public sector pay. As she will know, the Government ended the 1% pay policy in September last year, and pay review bodies will now come forward with proposals for pay that will be considered by the relevant Ministers. We have already announced that many of the lowest paid NHS workers will see double digit pay rises over the next three years.

I think I have answered many of the points that were raised, so I will conclude by saying that the recent trends in employment are very positive. It is a welcome development that we are starting to see wages outpace inflation, and the Government are enacting measures to help people with the cost of living. We are ensuring that our population, both younger and older workers, are able to upskill for the jobs of the future.