United Kingdom Jobs Market

Question

15:30:00

Asked by

To ask His Majesty’s Government what assessment they have made of the jobs market in the United Kingdom.

My Lords, a near-record number of people are in employment. This has been driven by a fall in economic inactivity, which is now at its lowest rate since 2023. For people in work, real earnings have continued to grow. We want to continue this trajectory and achieve our long-term ambition of an 80% employment rate by reforming employment, health and skills support, as set out in the Get Britain Working White Paper.

My Lords, 274,000 jobs have already vanished on this Government’s watch and the OBR has already warned that the Employment Rights Bill will have an additional negative impact on levels of employment. Why are the Government so stubbornly pursuing and continuing with this legislation —which can only be called the unemployment Bill—when their own forecaster is saying that the Bill will destroy jobs?

I thank the noble Lord for his question. I have enjoyed debating issues around the Government’s flagship Employment Rights Bill with him during some fairly lengthy Committee sessions. Given the debate we had last night, I am somewhat surprised that he returned to this field. We discussed just yesterday evening how one of the main aspects of the Employment Rights Bill is delivering our manifesto commitment to repeal the previous Government’s failed Trade Union Act 2016. I remind noble Lords that that Act delivered more strike days: 2.7 million days were lost to strikes in 2023 and 2.5 million in 2024—the highest levels since 1989. That Act failed and that is why we are reforming it. To pick up the noble Lord’s point on our economic record, let us have a look at it: employment has risen by 0.5 million since the general election and is now at a record high. Economic inactivity is down by more than 20%. Earnings are up and vacancies are down. We have a plan for change and a plan to invest in Britain’s renewal, and we are sticking to those plans.

My Lords, as an MP, it was an absolute pleasure to visit schools, but it was really hard to be unaware of a growing despondency among young people—a real lack of hope for the future, particularly among those who were not hopeful of a university place. Can my noble friend tell us what the Government are going to do to help young people into fulfilling jobs and give real hope to them for a decent future?

I thank my noble friend for that question. She makes an essential point about growing young people’s aspiration and potential, as well as about the future of our economy and of our country. I am pleased to tell her that the Government are supporting more young people into work through our new youth guarantee for all young people aged 18 to 21, including young people with health conditions, to ensure they can access quality training opportunities and apprenticeships, or help to find work. This includes targeted support for young people with learning disabilities. In the other place, we heard the Chancellor set out in the spending review record investment in training and upskilling young people, with £1.2 billion a year by the end of the spending review. That is on top of a record £3 billion spent on the apprenticeships budgets for 2025-26, which is the largest spend on apprenticeships ever. All I will say is that, unlike the previous Government, we are not letting our young people down. They are our future, we have hope for them, and they will deliver for us.

My Lords, can the Minister tell us what assessment has been made of the impact of artificial intelligence on the job market? What measures are being taken to reskill the workforce?

I thank the noble Lord for his question. He, like me, will be waiting with bated breath for the publication of the Government’s industrial strategy White Paper, which will set out the Government’s approach to investing in eight priority sectors—those deemed most likely to drive UK economic growth. It will not surprise the noble Lord or, indeed, the House that digital technologies, including artificial intelligence, will be one of the sectors right at the heart of the Government’s industrial strategy. As I have set out, we have a youth guarantee to deliver a record spend for young people. Ensuring they can take advantage of the opportunities of AI will be at the heart of making that work.

My Lords, could the Minister actually answer the Question, which is about the assessment of jobs that will be available? He has spoken about various things that are in flow, but could he give some indication as to how the Government see the various sectors of our society and the jobs that will be needed? There is always a feeling that we are waiting for some report, but there is no assessment of which sectors are in need of employees and workforce. Can the Minister indicate which sectors of society will be looked at for future employment?

I thank the noble Lord for his question. I am afraid I will repeat myself: a great deal of it will be delivered through the industrial strategy White Paper. We are looking at the sectors that will lead to the future economic growth of this country—advanced manufacturing, clean energy, the creative industries, digital and technologies, defence, financial services, life sciences, and professional business services. As we heard from the noble Lord, Lord Forsyth, on the previous Question, financial services will be a key part of our economic growth. These are the areas in which the jobs will come. It is our role as a Government to make sure everybody can access quality jobs in these economic sectors and that is what we will do.

My Lords, the ONS data shows that job losses accelerated immediately after the Government’s national insurance increase took effect in April, with 109,000 payrolled employees lost in May. That is the biggest monthly drop since the pandemic. I spent my whole working life trying to help people who had lost their jobs get back into work. The impact on individuals is truly devastating, and we should not forget that. How will the Government help those who have lost their jobs—who are competing in a rapidly shrinking jobs market with fewer vacancies—manage their period of inactivity so that their mental health does not deteriorate to the point that they remain out of the labour market permanently and never achieve their destiny?

I thank the noble Baroness for her question. She is right to identify the huge personal impact of long periods of economic inactivity and joblessness, as well as the obvious deleterious economic impact. The Government’s Get Britain Working White Paper sets out a bold and comprehensive vision to tackle that inactivity and build an inclusive labour market. As well as wanting to raise the UK’s employment rate to over 80%, it aims to modernise employment support. We have set out a number of trailblazers—including the first pathfinder, launched just last week in Wakefield—as part of a commitment to create a new jobs and careers service, which will shift the focus of the jobcentre system from box-ticking to job finding. It is a sad fact that only 9% of employers currently recruit through jobcentres. That is too few; they should become recruiters of choice. Our plan in the Get Britain Working White Paper is designed to make that happen.

My Lords, does the Minister accept that, unfortunately, we have a very inefficient jobs market and there are too many artificial barriers? For example, there are requirements for work experience that prevent science graduates entering industry. There is age discrimination and paper qualifications that are not relevant to the job. Those who have criminal records, often from decades before, are prevented from entering the workforce. This applies to both the public and the private sector. Is it not time to sweep away these artificial barriers so that people can get into work, look after themselves and make a contribution to our economy and society?

I thank my noble friend for his question. He is absolutely right: we need to do whatever we can to make sure that those barriers to work are torn down. To refer back to the Question asked by the noble Lord, Lord Hunt of Wirral, obviously we need to make sure that we have fair employment practices, that workplaces are fair, and that people get paid for a fair amount of work. We are taking steps to ensure that we ask people who face barriers to work what those barriers are. For instance, I am pleased to tell my noble friend that we have just set up a youth advisory panel of people who will provide their expertise from their experience to ensure that the voices of young people, most of whom are not in education, employment or training, are central to the design and deployment of the new jobs and careers service.