Economic Inactivity

HC Deb 05 July 2004 vol 423 cc531-5

2. Mr. David Watts (St. Helens North) (Lab)

What recent progress has been made in tackling economic inactivity. [181888]

10. Jim Knight (South Dorset) (Lab)

What progress has been made in tackling economic inactivity in the last six years. [181896]

The Secretary of State for Work and Pensions (Mr. Andrew Smith)

Thanks to sound economic management and the new deal, Britain has record employment and the lowest unemployment for nearly 30 years. The number of economically inactive people claiming benefits has fallen over the past seven years, with, for example, nearly 200,000 fewer lone parents on income support. While we have achieved a great deal, there is still more to do. We are tackling economic inactivity by requiring everyone applying for benefits to have an interview about work, and by providing effective help so that more lone parents and people on incapacity benefits move off welfare and into jobs.

Mr. Watts

I thank my right hon. Friend for that response. St. Helens has set up a local partnership, but it has found five major problems: a lack of long-term funding; a lack of joined-up government; a lack of training; discrimination by employers; and a low earnings threshold. Will he assure me that all those issues will be addressed in his review?

Mr. Smith

Yes, indeed, and I commend my hon. Friend for the support that he gives to the active partnership in his constituency, which plays such an important part in tackling these challenges successfully. With regard to joined-up government, we are doing pioneering work with the Department of Health on the pathways to work initiative, to bring together at local level primary care providers, rehabilitation services and the Jobcentre Plus effort. This is a clear pointer to the way forward. We are tackling discrimination through the extension of the Disability Discrimination Act 1995 and through the draft Bill that is currently before Parliament, both of which will provide huge moves forward on that agenda.

Jim Knight

Does my right hon. Friend agree that one of the best ways to tackle the problem of economic inactivity is to deal with health-related problems before a pattern of inactivity traps an individual? What is his Department doing to realise the potential role of rehabilitative and occupational therapies in tackling this problem?

Mr. Smith

As I have just been saying, the link with primary care, rehabilitation and condition management services is absolutely crucial. We are running pilots on the role of better occupational health, and on tackling ailments such as back pain and stress. As my hon. Friend says, if we can work with employers to tackle these problems before people leave work in the first place, we will face less of a problem with people moving on to incapacity benefit long-term. Mounting evidence, including an important report published last month by Professors Gordon Waddell and Kim Burton, points to the clear medical benefits of therapeutic and rehabilitation activity in the workplace, and shows how, in most cases, people's medical condition is helped by getting them back to work as soon as is sensible.

Sir Archy Kirkwood (Roxburgh and Berwickshire) (LD)

The Secretary of State will understand that this is one of the most important areas for Government action in the coming months and years, and there is mounting evidence to show that the stock of people on long-term disability benefits is not diminishing at all. How soon will it be before we can evaluate the pathways to work pilots? It would be interesting to know. I am particularly concerned about the case-loading that some personal advisers to jobseekers and disability employment advisers have to cope with. The case load is so great that they cannot give the individual attention that those clients need.

Mr. Smith

Further evidence on the performance of the pathways to work pilot and early indications of the difference it is making will be published over the summer. The information that I have received anecdotally is very encouraging. The first step in full evaluation will not be published until next spring, and we all look forward to that.

On case-loading, I agree about the importance of the work that personal advisers have to undertake. Of course, with the roll-out of Jobcentre Plus and work-focused interviews, everyone who applies for the so-called economically inactive benefits, as well as active benefits, must have those interviews. We are developing further the programme of support that is available to follow up the interviews, as well as the help that is available through the existing new deals and, I might emphasise, the new deal for disabled people, the performance of which is improving month by month.

Mr. Graham Brady (Altrincham and Sale, West) (Con)

The Secretary of State referred to 200,000 lone parents no longer on income support, but a written answer that I received last week from his Department made it clear that 106,570 lone parents have been through the new deal at least twice. Does he accept, therefore, that a large number of people are coming off benefits not because they are moving towards work but because they are trapped in a revolving door that takes them back to the new deal for lone parents, back to benefits and back to the new deal again?

Mr. Smith

I find it difficult to accept that those people would be better off if there were no new deal programme to help them, which, of course, is the policy of the Conservative party. I accept—I am sure everybody would; it is common sense—that we must continue to work to improve those programmes so that a still-higher proportion of those who go through them stay in jobs. As I reported in a previous, similar exchange, the record for [...] parents staying in work who have been through the new deal is considerably stronger than that for those who have moved into work without going through the new deal—so it is definitely adding value in terms of people moving into jobs and staying in them. We need to build on the new deal, not scrap it.

Ms Dari Taylor (Stockton, South) (Lab)

I seek reassurance from my right hon. Friend. Recently, I visited Jobcentre Plus, which, with a private trainer called NETA—the north-east training association—is delivering effective, excellent skill training. It is doing so, however, in response to an employer's demand, so employment is absolutely assured. The work force are in their late 30s or early 40s, and none of them thought that they would get skilled training ever again. Will he reassure me that the Ambition programme will be financed in future? It is excellent, and my people thoroughly approve of it.

Mr. Smith

My hon. Friend, rightly, is enthusiastic about what the Ambition programme is achieving, both in Ambition: Energy and across a number of other sectors. As she says, a distinctive strength of the programme is that it involves not simply programme-push on people being put into the labour market, but employer-pull in ensuring that they have the skills that employers require.

In relation to the Ambition programmes and, more generally, to ensuring that we have better joint working with the Learning and Skills Council and business links, we must ensure that our employment programmes are ever more effectively targeted on ensuring that people have not only the basic skills and employability but the specific vocational skills that employers require to fill their many vacancies.

Mr. Michael Weir (Angus) (SNP)

Economic inactivity is a serious problem in many areas, but the Secretary of State will also be aware that a report last week disclosed that Glasgow is the poorest city in the UK, with 41 per cent. of households in poverty. What good will the measures that he talks about do unless he acts to tackle the low-wage economy that keeps people in poverty, even if they are able to get work?

Mr. Smith

Glasgow is also an employment zone, and as such has seen good achievements in helping the long-term unemployed back into work. Much pioneering work has been done through community-based initiatives in Glasgow to help the economically inactive into jobs. As far as low wages are concerned, this Government have introduced not only a national minimum wage but tax credits that make sure that work pays. As my hon. Friend the Member for Stockton, South (Ms Taylor) said a moment or two ago, the better we equip people with skills, the more we can help them to progress in a job and towards a career: it is not simply welfare to work but welfare to a career. That is the direction in which our policies are moving, and I trust that the hon. Gentleman will support us.

Mr. David Willetts (Havant) (Con)

Will the Secretary of State confirm that, on the latest figures, 1,023,000 people aged between 10 and 24 are not working, not studying and not training? Will he confirm that, despite all the initiatives, programmes and schemes that he has mentioned, the number is virtually unchanged compared with the number in 1997? Why is it unchanged?

Mr. Smith

Thanks to the new deal—[Interruption.] Conservative Members do not like to hear it because it is so important and because it is true. The employment rate is crucial, and the employment rate of the group to which the hon. Gentleman refers is up. As the report of the independent National Institute for Economic and Social Affairs showed, the unemployment rate would be twice as high were it not for the new deal. In making claims about the figure mentioned, the hon. Gentleman ignores the increase in the numbers of students and in the number of people on shorter training courses, who may be classed as inactive but who are moving closer to work, gaining precisely the skills that my hon. Friend the Member for Stockton, South (Ms Taylor) mentioned a moment ago. In proposing to abolish the new deal, the hon. Gentleman would not only deny those young people the help that they need but go back to the bad old days of the stay-in-bed culture, which inflicted so much damage the last time the Tories were responsible for employment policy