Labour Market Activity

Mel Stride Excerpts

Tuesday 28th February 2023 Commons Chamber

[The Secretary of State for Work and Pensions (Mel Stride)]

It took the right hon. Gentleman a little bit of time to get going, but he certainly got going at the end of his speech—he was both Pinky and Perky at the finish there, which was good to see. I am afraid that I cannot accept the motion as it stands, of course, but I can reassure him that it makes fair points, highlighting the challenges that exist around employment, unemployment and economic inactivity. I welcome the opportunity to have a debate about those issues this afternoon. However, where the motion falls short is that it is entirely wrong, first, to deny the very considerable progress that the Government and previous Conservative Administrations have made in these areas, and secondly, to suggest—as the right hon. Gentleman does—that the Government have somehow been sitting on their hands. Nothing could be further from the truth.

It is this Government and my party that have seen 3.7 million more people in employment since 2010, with 2 million of those being women. We have seen 1.3 million more disabled people in employment since 2017—these are simple facts. We have seen long-term unemployment decline by 12% since before the pandemic, and as the right hon. Gentleman recognises, unemployment stands at 3.7%, which is a near-historic low. Under this Government we have also seen payroll employment at a record level, and of course we saw this Government in action under the then Chancellor, now the Prime Minister, at the time of the pandemic. The Government intervened in the labour market, to the extent that all those economists who said that we would be back to the unemployment levels of the 1980s, up at about 12%, were disproved by the actions of this Government.

[Neil Coyle (Bermondsey and Old Southwark) (Ind)]

Would the Secretary of State extend his gratitude and congratulations to the frontline jobcentre staff who provided the statistics that he has just used? After thanking jobcentres such as Blackfriars Road in my constituency, can he then explain why they are being closed?

[Mel Stride]

It is a fact that we are going through an estate rationalisation programme, and there are very good reasons for that. During the pandemic, we stood up a lot of additional jobcentres for which we do not now have a requirement, and it is also important that we make sure we have an estate that is fit for the 21st century, with the right technology, job opportunities and so on. However, I join the hon. Gentleman in congratulating and thanking those very hard-working frontline staff—the work coaches in our jobcentres up and down the country—who do an extraordinary job. I will pay further tribute to them a little later in my remarks.

[Several hon. Members rose—]

[Mel Stride]

I give way to my right hon. Friend the Member for Wokingham (John Redwood).

[John Redwood]

I am very grateful to the Secretary of State, who is right to point out the excellent record on employment, which is a great strength of our economy. Is he, like me, a bit worried about the fall in self-employment more recently, and will he have a word with the Chancellor? I think some of that is to do with changes in tax rules that now impede the self-employed in getting contracts from companies.

[Mel Stride]

My right hon. Friend makes a really important point, and this Government are absolutely committed to encouraging self-employment. I think it is fair to point out that in the past some apparent growth in self-employment has been due to individuals incorporating themselves for tax purposes, and it may be that more recently some of that effect has started to unwind. However, I totally agree with my right hon. Friend, and I am sure the Chancellor has heard his words, because he has made the point many times before that it is really important that we support the self-employed.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

I have noted down some of the things that the Secretary of State has said the Government have done. I do not see anything about what the Government are doing to tackle the shameful waiting list for Access to Work support. Will he tell us what the Government are doing right now to rectify that problem, and will he admit that the Government have let people down?

[Mel Stride]

The hon. Lady points to an issue that is a focus within the Department. We have taken on more staff, and we are in the process of taking on still more staff. We are also looking at processes and, in the longer term, examining processes that will increase the rapidity of supply of that particular set of support.

I will now turn to where the motion is clearly so wrong.

[Geraint Davies]

A moment ago, the Secretary of State claimed that 500,000 more people are in payroll employment than before the pandemic. Am I not right in saying that the Office for National Statistics says that 400,000 fewer people are in overall employment, because the payroll does not include the massive reduction in self-employment that he has so briskly avoided noticing? Will he now set the record straight: 400,000 fewer people are now in work overall than before the pandemic?

[Mel Stride]

I think it is the hon. Gentleman who has misunderstood what has been said here. There is a distinction between payroll employment, which is clearly those who are on PAYE employed by an employer, and somebody who is self-employed, which is a totally different matter. The statistic, or the fact that I presented, was simply that the level of payroll employment is currently at a record high in this country.

[John Redwood]

I want to clarify that I think there is an issue with capacity in things such as plumbing, jobbing building and that kind of thing. We are short of capacity there, and we need to look at why those trades have been afflicted by some of this decline.

[Mel Stride]

My right hon. Friend is absolutely right, and that is why we have stood up important programmes, such as sector-based work programmes, and it is why skills and apprenticeships are so important—[Interruption] —as are skills bootcamps, as an hon. Friend reminds me.

This motion is wrong on unemployment and employment, but it is also wrong on economic inactivity, because while it is true that economic inactivity rose during the pandemic, it is also true that, with the notable exception of the United States, in most countries it has gone back down to broadly where it was before the pandemic. That has not happened in the UK. It is not true to say that working-age inactivity rates have not been on a long-term decline. They have in this country, and the trajectory has been downwards. The level of economic inactivity in the UK is lower than in the United States, France and Italy. It is below the EU average, and it is below the average of OECD countries.

While there has been some softening in recent months on the level of economic inactivity in the United Kingdom, I accept that there is a lot more work to be done, which is why the Prime Minister has asked me to work across Government to review how we approach these issues, particularly in respect of disability, the long-term sick and those who are over 50 and have retired early.

Before I come to those cohorts, let me state clearly what lies at the heart of this Government’s success on unemployment and employment: the key Conservative belief that we should make work pay. The universal credit roll-out has been a huge success, despite the fact that the Leader of the Opposition suggested as recently as 2021 that it should be scrapped. We have enhanced universal credit by improving the taper, dropping it from 63% to 55%. We have increased the work allowance by £500. In terms of making work pay, for the very lowest paid we will be increasing the national living wage by 9.7% this April. We have stood up a number of important programmes that have helped to encourage people into work, among them Restart and our youth offer.

[Chris Stephens]

The Secretary of State says that the route out of poverty is work and making work pay, but the example I gave to the shadow Minister is one that came up when I was on the Work and Pensions Committee, of a lone parent not taking additional hours because they would lose state support. What are the Government proposing to fix those sorts of issues?

[Mel Stride]

I think the main point—I do not know the specific example to which the hon. Gentleman refers—is that under UC the whole driving principle is that work always pays. As someone gets into work, the benefit is tapered away, but none the less work always pays. That is why we are looking, in part at least, at these very low levels of unemployment and very high levels of paid employment.

[Charlotte Nichols (Warrington North) (Lab)]

The Secretary of State says that work always pays, so why is the clawback rate for universal credit so high? The effective rate of tax for every pound someone earns when on universal credit is about 73%—far beyond what any of us pay in here, and we are in the top 5% of earners in this country. Why does he think it is fair that someone on universal credit should be paying an effective rate that is so high, given the clawback?

[Mel Stride]

It is true that at certain levels of income, marginal tax rates are very high. To improve that situation, we have reduced the taper from 63% to 55%. I would like us to go still further, and if we had the finances we would almost reduce it altogether, but that is not the reality of where we are. None the less, a substantive point remains that people are always better off under UC if they are in work, within the UC benefit environment.

[Angela Richardson (Guildford) (Con)]

Does my right hon. Friend agree that the Labour party has a shambolic record on making work pay in this country, not least because 1.4 million people spent most of the 2000s trapped in out-of-work benefits under Labour?

[Mel Stride]

My hon. Friend is absolutely right, and the 1.4 million figure is depressingly true. Under the last Labour Government, over 1 million people were parked on long-term benefits. Of course, when we talk about unemployment, we know that every Labour Government in history have left unemployment higher at the end of their term in office than it was at the beginning.

[Margaret Greenwood]

I very much appreciate the Secretary of State giving way. He was saying that he had been tasked to work across Government on tackling this issue. Adult education has a really important role to play in building people’s confidence—it can be particularly important for people who, perhaps in midlife, have had to give up work to look after a family member who was ill or whatever, and later find themselves struggling to get back into work and having really lost their confidence—yet the Government, as part of what they call their reorientating the vision for non-qualification provision in adult education, have plans that could actually remove some of the very non-vocational courses that people who may feel daunted at the prospect of having to go for a high qualification would none the less get. Could he please speak to his colleagues to ask them to look at this issue again?

[Mel Stride]

If the hon. Lady would drop me a line about the point she raises, I would be very happy to raise that specifically and to consider it myself as well.

Could I turn to economic inactivity, and to disability and sickness? This Government have been acting, and we will come forward with further measures very shortly, which I am sure will be of interest to the right hon. Member for Leicester South (Jonathan Ashworth). For example, our Work and Health programme has now been extended to September 2024, bringing an extra 100,000 people into support. We have rolled out health adjustment passports to facilitate more structured conversations between those seeking work, those seeking to employ them and employees in jobcentres. We have been co-locating employment advisers alongside therapists in NHS talking therapies. For those with autism, which is often a very considerable barrier to employment, we have funded no less than 28 different initiatives across local authorities.

[Charlotte Nichols]

I am very interested in what the Secretary of State says about the links between poor mental health and economic inactivity, but one thing I find particularly surprising in this context is the fact that the Government—the Home Office in particular—are specifically blocking research into new therapies and new medicines. Would he perhaps have a word with the Home Office, and get it to reschedule the drugs that we could be looking at for curing people with such conditions?

[Mel Stride]

The hon. Lady is tempting me to plunge into the Department of Health. I certainly hear what she has to say, but let me make a general point about mental health. The most important thing—and, to be fair, the right hon. Member for Leicester South made this point—is that we intervene at the point in the health journey that is as close to the labour market as possible and that we do so as early as possible. What we know is that the longer we allow those conditions to develop and persist, the more difficult it becomes to bring those individuals back into the workforce. That is very much at the heart of the approach I am taking in the work I am carrying out at the moment.

We are also providing more support to those who are waiting in the work capability assessment queue, promoting Disability Confident among employers and promoting Access to Work with disability employment advisers up and down the country. All of that has led to 1 million more disabled people in work since 2017, meeting our 1 million target five years early.

Looking to the future, the White Paper probably contains lots of ideas on health and disability that the right hon. Member for Leicester South has pre-empted and pre-judged—perhaps he has come to similar conclusions to those that we have already come to but are unable to speak about at the moment—so he should be a little patient.

On those in early retirement, who have increased significantly in recent times, we have taken action: with a £20 million fund we substantially increased the number of one-on-one sessions in jobcentres; we focused on skills, rolling out 50-plus champions across jobcentres up and down the country; our midlife guarantee ensured that those in that age group are confident in seeking work, understand their potential skills gaps and, critically, have looked closely at finances so that they know whether they can survive comfortably through to the end of their lives or perhaps would benefit from taking on some work. I will have more to say about the over-50s in time.

[Jerome Mayhew (Broadland) (Con)]

Members of the House often hold jobs fairs, which are too often focused on the unemployed and youth sectors—I hope to mention my own jobs fair later. Does my right hon. Friend agree that there is also a need to have jobs fairs to encourage the elderly—by which I mean the over-50s, so I am elderly by that definition—to get back into work where it is suitable for them?

[Mel Stride]

My hon. Friend is absolutely right. The constituency and part of the country that he represents has quite a preponderance of more elderly residents, and there is certainly scope for over-50s jobs fairs. Indeed, there have been successful examples of those up and down the country, sometimes involving support from the Department for Work and Pensions.

I am aware of time, Madam Deputy Speaker, and of finishing by about twenty to six, so let me turn and say something about work coaches. These are truly brilliant people. They are people who know that work is not just a job; they understand that work is about improved health outcomes and self-esteem, and a greater sense of pride. They know it is about not just individual growth, but growing the economy, which in turn allows us to provide more tax revenues to fund those public services that we all know are the hallmark of a civilised society. Our work coaches are right at the centre of all that, and I want them to do even more to support people. I want to reward them for the work they do, where they are particularly successful.

I have laid before the House a written ministerial statement setting out how greater support will be provided to claimants, with two weeks of additional intensive support at the 13-week and 26-week stage of the universal credit journey. That will include more one-to-one support, as well as support in groups. I also want to reward job centres and those individuals who exceed the aspirational targets that we have rightly been setting. I have been carrying out that work through a series of pilots. We started with four, and yesterday I announced that that is expanding to 60. I am confident that the innovation, approach, support and confidence that we are giving our work coaches in those pilots will lead to even better outcomes and an enhancement of even more lives.

Far from being complacent, this is a Government of powerful interventions around covid, and more recently the cost of living crisis, to support people up and down the country. It is a Government of large-scale ambitious programmes to get people into work, and allow them to progress within work. It is a Government who are about creative thinking and innovation, piloting new approaches so that we can ensure we are even more successful in the future. As we met the challenges of the past, so we will continue to meet those challenges in the future.

[Several hon. Members rose—]