Labour Market Activity

Angela Richardson Excerpts

Tuesday 28th February 2023 Commons Chamber

[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.

--- Later in debate ---

[Angela Richardson (Guildford) (Con)]

This Government rightly recognise that increasing workforce activity is an essential part of growth, as we work hard to halve inflation this year. The labour market has been recovering since the pandemic and we have seen the employment rate rising across the UK. The employment rate in December was 0.2 percentage points higher than in the previous three-month period, and the number of payrolled employees increased by 102,000 in January this year, to 30 million. However, in recent years, we have seen a rise in economic inactivity, including in my Guildford constituency. I am pleased to see that this is now falling as our economic recovery continues. The latest figures from the Office for National Statistics show that the economic inactivity rate across the UK decreased by 0.3 percentage points to 21.4% in October to December 2022.

This Government have been reviewing labour market participation across our economy and are looking for ways to support, encourage and incentivise those who are currently economically inactive to re-join the labour market. It is right that we provide the necessary support to encourage those who may have long-term sickness or caring responsibilities, or are over the age of 50 to return to the workplace when they can. We have seen a rise in people aged 50 to 64 leaving the workforce, accounting for the largest increase among all age groups since the start of the pandemic. I welcome the dedicated 50PLUS champions put in place by this Government, backed by £22 million of funding, to improve bespoke support for those in that age group.

The pandemic also had a significant impact on the mental health of people across our country, and mental health represents an important factor for many economically inactive people. I welcome the measures that the Government are taking to provide support where it is needed in this area. First, they are rolling out an NHS England mental health support service nationally, backed with £120 million, providing mental health support together with employment advice. It will help those already in work to stay in work and help those temporarily out of work to return to the workplace. Alongside that, a £6.4 million investment in a new online service to help employers to support employees experiencing difficulties with their mental health is welcome.

This Government are taking the right steps to reduce economic inactivity. I look forward to seeing the positive outcomes of those measures.