Business Hiring

The UK labour market and economy remain resilient despite geopolitical uncertainties. The UK had the fastest-growing economy in the G7 in the first quarter of this year. For the labour market, ONS data shows that there are 399,000 more people in work than a year ago, and its business insights survey shows that over 80% of businesses intend to either maintain or increase their staff levels in July this year.

My Lords, on behalf of the House, I welcome the Minister for her first Question. But is she aware that, last week in the other place, speaker after speaker condemned the Employment Rights Act, the impact of the increase in national insurance contributions and regulations generally, which have created the largest number of young people not in education, employment or training for well over 10 years? Is she further aware that the other place then proceeded to pass a Motion, without one vote against, to say that the Government should change course to support summer jobs, flexible working and seasonal work? Does the Minister accept that judgment of the elected House? What specific changes of policy is the new Prime Minister, Mr Burnham, going to bring in?

That is a nice and easy first question. It is an honour, and slightly terrifying, to answer my first Oral Question from a previous Secretary of State for Employment. It is, however, a very interesting Question. Summer jobs—particularly in hospitality, retail and tourism—are often a young person’s first step into the labour market. My own first summer job was as a guide at the Black Country Museum. As a Government, we are not complacent about the challenges that we face. The Government are investing £2.5 billion through the youth guarantee and the growth and skills levy to support almost 1 million young people and create up to 500,000 opportunities to earn and learn. This includes expanded work experience opportunities, skills boot camps, foundation apprenticeships, sector-based work academy programmes and incentives for employers to hire young apprentices. Alongside this, the Government are supporting hospitality businesses through business rates reforms, sector-specific funding and measures to boost summer demand.

My Lords, the Minister’s statistics match mine. There has been a bit of an uptick in employment, but not in one area: graduates. Graduates are facing a terrible time. Entry-level hiring has dropped to a 13-year low, and it dropped by 45% in January this year. There are graduates with excellent degrees from very good institutions who are receiving literally hundreds of rejections. So widespread has this become that it is deeply demoralising for an important section of society who cannot even get an interview, never mind a job. Does the Minister accept that this is a market failure? If she accepts that, what are she and her colleagues going to do to fix it?

I thank the noble Lord for his question but remind him that, thanks to our industrial strategy, employment is rising. Employment rights are improving too. We are determined to reduce unemployment further, especially among the young, which is why we are investing so much in the youth guarantee and are poised to go further when the Milburn review reports back later this year. I am aware of the situation where AI recruiting is impacting on graduate appointments and recruitment, and I am also aware that the Government have issued guidance to employers to ensure that this is a reducing problem, not an increasing one.

My Lords, is my noble friend aware of the latest Manpower survey of employers that reports a surge in hiring intentions for the third quarter of this year, placing the UK in the top division of the global league? Does she agree that any efforts to suggest that stronger workers’ rights hit hiring intentions do a disservice to the many decent employers who already offer enhanced sick pay and other stronger protections?

Yes. As my noble friend quite rightly points out, it is very encouraging to see Manpower reporting an 18 percentage point increase in businesses planning to recruit since last year, and also reporting that we have the fourth most positive hiring outlook globally. That is undeniably good news, though I am sure the whole House will agree with me when I express my keen hope that the England men’s football team goes beyond fourth to become the very best team globally by the end of the week—with apologies to Welsh, Northern Irish and in particular Scottish colleagues across the House. On the second part of her question, I completely agree with my noble friend that our country has many good employers who see absolutely no conflict between protecting their employees from the consequences of ill health, for example, and running successful companies that compete profitably.

My Lords, the Government’s White Paper Get Britain Working aims for an 80% employment rate, but 20 months on we remain stuck at 75%. With the recent steep drop in new recruits, can the Minister, who I welcome to her position, point to where these 2 million net new jobs will be coming from?

I thank the noble Lord for his question. The UK’s employment rate is in the top half of the OECD economies and is above the G7 average. Unemployment also remains low by international standards: in the bottom half of the OECD and lower than Canada, France and the euro area average. The UK has the third-highest employment rate in the G7. Employment is up, inactivity is down and wages continue to grow. We are particularly pleased to see that 399,000 more people have moved into work in the past year.

My Lords, the area of Greater Manchester, which is largely coterminous with my diocese, has been showing better growth and better employment figures than most other parts of the country. I wonder whether the Minister might reflect that what the wider country needs is a good dose of Manchesterism.

That is a very topical question from the right reverend Prelate. Greater Manchester has shown the value of putting decisions closer to the people and places they affect. Ambitious growth plans are at the heart of its strategy, linking jobs, skills and public services. Collaborative local leadership has supported pathways into work, enabled by infrastructure connecting people to opportunities. Jobs have also flowed from procurement and investment. One of the benefits of devolution is enabling innovation. We look forward to sharing the learning from the success of Manchester across the country.

My Lords, my family owns the local pub, and therefore I can speak from trying to employ people. We have very high employment standards in our business, and we have had to reduce staff because of what the Government have done on employment taxes of all kinds. That is true of the whole hospitality industry. It is all right for people to groan, but those who are actually running pubs know that we are closing one after another because the Government have not helped us; they have made life much more difficult.

We are not complacent. I hear what the noble Lord says. We have introduced permanently lower business rates for retail and hospitality properties. The average pub gains £1,650 this year, and that is in addition to increased hospitality support of over £10 million funding over the next three years. For young people in pubs and hospitality, we are introducing hospitality foundation apprenticeships.

My Lords, I also congratulate my noble friend on her well-deserved appointment. Many of us will share the concerns about the number of young people—16 to 24 year-olds—not in education, employment or training at this time. She has already mentioned the Milburn review, but can she tell the House what she hopes the Milburn review will do to help that young cohort of our people so that their futures are not blighted?

Alan Milburn’s review has reported on an interim basis, and we are expecting the full report in September. This Government will not leave an entire generation of young people behind. We are investing an additional £2.5 billion into the youth guarantee and the growth and skills levy to support nearly 1 million 16 to 24 year-olds into work, education or training. Over the next three years, this investment will deliver up to 300,000 opportunities for workplace experience and training and will unlock up to 200,000 jobs through the £3,000 youth jobs grant to employers and the £2,000 apprenticeship hiring payment for SMEs.