Working People’s Finances: Government Policy

Aaron Bell Excerpts

Tuesday 21st September 2021 Commons Chamber

[Bridget Phillipson]

First, it is worth considering why the increase to universal credit was put in place. It was because, during the pandemic, the Government had to recognise that universal credit had been set at an inadequate level on which families might survive. On the hon. Lady’s wider point, I have a long list of places where we could find some money, if she is interested: the 1.9 million pieces of personal protective equipment, worth £2.8 billion, procured by the Government that were useless; the stamp duty holiday that was a £1 billion-giveaway to landlords and second homeowners—I could be mistaken, but I do not recall her objecting to that—and the hundreds of millions of pounds about to be wasted on the Prime Minister’s vanity yacht. That is before we get to the Test and Trace system that the National Audit Office said had not worked properly and had had a “minimal impact” on transmissions, literally wasting billions. This is about choices. There is always money for the Government’s projects, their friends and their people, yet when it comes to dealing with some of the poorest families in our community—those who have got us through the pandemic—I am afraid they are told that there is nothing for them.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

rose—

[Bridget Phillipson]

I will make a little more progress but will happily take another intervention in due course. Having gone from no interventions to a flurry of them, I should probably press on.

The scar of poverty is not just about not having material goods, a roof, warm clothes and warm food. It is about a lack of freedom, having nothing to spend on yourself, having choice exercised for you—either by others or by necessity—and finding your voice and your own choice squeezed out. That is what the Government’s changes do, but it does not need to be like that.

Labour has a clear plan for how we would secure a better future for our country and steer a path for our economy in the months ahead. We would not be pretending that a national insurance rise without a plan is the way to fix the NHS, we would not be cutting universal credit in just a few weeks’ time, hitting working families hard, and we would not have spent 18 long months handing out huge amounts of taxpayers’ money through outsourcing and crony contracts while hitting working people for tax again and again. We would not be telling hauliers that they were crying wolf. We would be taking action day and night with employers and trade unions to fix the supply chain disruption that is leading to higher prices and fewer goods. We would not have sat back for the last decade as rent, childcare and rail fares soared.

[Bridget Phillipson]

Yes, absolutely. These are political choices—who we seek to prioritise, what we do from Government and what matters most to us all.

[Aaron Bell]

When the hon. Lady’s boss, the hon. Member for Leeds West (Rachel Reeves), was appointed as shadow Chancellor, she said that not only would all Labour’s policies be fully costed but she would explain how they would be paid for. They need to be paid for on an ongoing basis. It is no use going over incidents from the last 18 months and saying that that would fund the extension to UC forever, that tax credit uplifts would be made permanent and that legacy benefit claimants would also get them, as well as turning the advances we have had into grants, reducing the taper rate and scrapping the benefit cap and the two-child limit. Those are popular policies, but how much would all of that cost and how would Labour pay for it on an ongoing basis? The hon. Lady cannot deny the fiscal reality that we are in a difficult situation because of all the money that the Government have spent on protecting jobs.

[Bridget Phillipson]

The difficulty with the Government’s approach is that they like to pretend that theirs is the only way to do it, with the only option being to hike national insurance on workers and businesses when our recovery is far from clear. Labour would not be putting up national insurance at this point with the recovery far from secure. We have set out in lots of detail the different options available. Just yesterday, my hon. Friend the shadow Chancellor set out further changes that we would make to allow the tax system to become fairer and more progressive. We could say a lot more. It should be shared more evenly across the incomes and across the generations and not through the Government’s approach of hammering working people and their families.

Labour will make more in Britain by giving more public contracts to British companies big and small. We will build a prosperous and resilient economy where every corner of our country can offer decent jobs; where ours is the best country to grow up in and the best country to grow old in. We will use stretching social, environmental and labour clauses in Government contracts to raise standards and to spend and make more in Britain. We will focus on bringing the jobs of the future to Britain by investing in reshoring jobs just as we invest in foreign direct investment. By helping every business access the expertise and support that it needs, we will build a high-skill, high-wage economy, and we will take seriously the challenges that we face outside the EU, fixing the gaping holes in the deal that the Government negotiated.

Let us focus on what the Government can do right now. Earlier this month, the Government felt they just could not wait for next month’s Budget to announce their plan to clobber working people’s incomes through an increase in national insurance, after all that this country has been through. After a pandemic that again and again showed the British people pulling together at their generous, innovative, dedicated best, the Government’s reward was a tax rise on workers and struggling businesses rushed through in less than a week. There is nothing to stop Ministers taking the same decisive action, with the same urgency, to protect the living standards of millions of people. There is nothing to stop them tackling poverty as the scar that it is. I urge the Government to change direction not at their conference, not in October, not at the Budget and not next year but now, as the nights grow cold, the bills mount up and the money runs out. There is no time to spare. The time for action is now.

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[Aaron Bell]

My right hon. Friend is making a powerful speech. He is right about the importance of jobs, and not just well-paid jobs but high skilled jobs. Can he say something about how our plan for jobs is delivering people with skills? We have a limited amount of money to spend and it is better to invest that in people’s skills than endlessly into welfare.

[Mr Clarke]

I absolutely agree: it is very important that we invest in skills. The plan for jobs is not just about getting people into work or keeping them in work; it is about making sure they grow their skills during their working lives, which is why we have a focus on more skills for school leavers and generous apprenticeship hiring incentives. We are also tripling the number of traineeships for 16 to 24-year-olds, and we have the pioneering lifetime skills guarantee. These are all the sorts of things that will make a difference in Staffordshire as they will across the rest of the UK, and we should be incredibly proud of that.

--- Later in debate ---

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to follow the hon. Member for Coventry North East (Colleen Fletcher).

It is also a pleasure to contribute to the debate in which my hon. Friend the Member for Hartlepool (Jill Mortimer) made her maiden speech. When I went up to campaign for her in Hartlepool, I was struck by the reception that we had on the doorsteps and the faith that the people of Hartlepool put in her. That faith has been entirely justified by the tone of her speech. She stands for putting pride back into Hartlepool, exactly the same as other Members in the post-industrial areas that the Government are levelling up and addressing, like me, in Newcastle-under-Lyme, and my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates). It will be good for working people that Newcastle-under-Lyme has a £23.6 million towns deal, just as Hartlepool has its towns deal funding. The Government have taken on that agenda. Let us be fair: it was originally the hon. Member for Wigan (Lisa Nandy) who said that we needed to do more for towns, but the Labour party decided that it did not want to listen to what people in towns have to say—people who voted for Brexit and wanted Brexit to happen—and it did not vote for her to be its leader. That is why it has been reduced to the state that it is in.

I turn to the effect of Government policy on the finances of working people. The key thing is that people should be working and the Government have been extraordinary in ensuring that people can continue working. There was a period when people had to stay at home, but now they have jobs and businesses to go back to because of the extraordinary measures taken by our extraordinary Chancellor in extraordinary times. We saved millions of jobs through furlough—more than 10,000 people in Newcastle-under-Lyme were on furlough. We saved tens of thousands of businesses through the grants and loans that we gave them, and those businesses are now recovering and hiring again. We have also protected people’s salaries through measures such as the energy cap. Yesterday, I was grateful to hear the Secretary of State for Business, Energy and Industrial Strategy say that, with the energy cap put in place by the Government, people will not have to pay much more this winter.

Above all, the Government have kept people in jobs. Unemployment peaked at 2 million fewer people than was initially feared at the start of the pandemic, which is a tribute to what we have done through the pandemic. As my hon. Friend the Member for Penistone and Stocksbridge said, jobs are now available—we have 1 million vacancies out there—and wages are rising because the era of unlimited immigration is over. We have the highest growth in the G7, and the OECD predicts that we will have the highest growth this year and next. We also have, as I said in my intervention on the Chief Secretary to the Treasury, a plan for jobs that is about not just getting people into jobs but getting them into better jobs and getting them better skills in jobs. We have policies such as kickstart and restart, and we are doubling the number of work coaches. I thank the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), for visiting the Newcastle-under-Lyme jobcentre with me in the summer, where he saw what our work coaches are doing to get people into jobs in north Staffordshire.

Of course, the Government also have policies for more skills, including apprenticeships and technical training. For the last two Fridays, I have been giving out awards at Newcastle College, first to those in higher education and last Friday to those in further education. The college’s apprenticeship scheme is outstanding—in fact, it was the first college to be graded “outstanding” across the board with Ofsted—and people who go there and get those technical skills will end up with much better jobs, and much better paid jobs, than they would have done without those innovations. My hon. Friend the Member for Bury North (James Daly) mentioned an Institute of Technology bid. Newcastle College also has one in. If it gets that, that will only enhance our offer to young people in north Staffordshire and Newcastle-under-Lyme.

[Alexander Stafford (Rother Valley) (Con)]

Does my hon. Friend agree that it is about not just creating jobs but creating high-quality jobs? This Friday, United Caps is opening a new manufacturing facility in my constituency, providing high-quality jobs on the top of the old pit site. It is doing that because of the aspiration that the Government have given the company to invest in a former pit town on a former pithead to give us the new high-quality jobs that Government Members want and Opposition Members do not.

[Aaron Bell]

Like my hon. Friend, I have the honour of representing a former mining area, and it is so important that we give our areas the hope, the skills, the jobs and the future they need. So much public money is coming into places such as Newcastle-under-Lyme, but in the long term we will need the private sector to sustain our economy, which we can do by using the pump-priming of the towns fund and the future high streets fund—we have got money from that—to grow our local economy to support people. We can do that by paying people higher wages, and by giving them better skills they can earn those higher wages. He is absolutely right.

The Government have a plan for jobs, but where is the Opposition’s plan? We did not hear one from the shadow Minister, the hon. Member for Houghton and Sunderland South (Bridget Phillipson). Labour must address the fiscal reality; it cannot wish it away. We spent £400 billion in extraordinary support during the pandemic. We now have a £300 billion deficit—nearly 15% of GDP—but we were able to put that support on the table only because previous Conservative Governments accepted that we have to live within our means and get the deficit down when we can. We dealt with Labour’s deficit and we will now have to deal with the deficit that is the legacy of the pandemic.

As the Chief Secretary to the Treasury—I welcome him back to his rightful place at the Dispatch Box—said, the Opposition do not seem to want to accept any of that. They voted against extra money for the NHS, which I find astonishing. They say that we should put the tax elsewhere, but they voted against our increase to corporation tax. They also voted against freezing income tax thresholds, which was not a popular decision but a necessary one in the face of the fiscal realities. They also voted against the reduction in the international aid budget. Again, we breached the manifesto on that, but in the extraordinary economic circumstances we are in, I believe it is the right thing to do.

Labour Members want more spending and they want no tax rises in the face of an unprecedented, enormous deficit. I believe that that is economically incoherent, and it takes the British people for fools. They tried that once before in the face of an enormous deficit during the 2010 to 2015 Parliament, and I have to tell them that it did not work out well for them at the next election. I am reminded by today’s news that they also took the opportunity during that Parliament to change the way they elect their leader. They are trying to do that again now, and that really did not work out well for them, so they really should be very careful what they wish for.

In conclusion, the reason why Government economic policy is working and is in the interests of working people is that it is really all about jobs. Conservative Members all believe that jobs and work are the best way out of poverty. There are more jobs, more people helped into jobs, more training within jobs, including the apprenticeships I talked about earlier—[Interruption]—with up to £3,000, as my hon. Friend the Member for Broadland (Jerome Mayhew) says. There is our lifetime skills guarantee for those who are in the wrong job and want to change jobs, and we have also put an end to unlimited immigration, protecting our citizens from the race to the bottom in wages that, sadly, we have seen so often. The Labour party wants us to rejoin the EU, reopen those borders and force wages back down again.

From the plan for jobs to the increase in the national living wage, I firmly believe that this Government are putting those on lower incomes at the heart of our economic policies and at the heart of our economic planning, and it will be a brighter future for all of us.