Budget Resolutions and Economic Situation

Chloe Smith Excerpts

Thursday 16th March 2023 Commons Chamber

[Mel Stride]

As I just suggested, we will take a measured and appropriate approach to the delivery of a fundamental reform of how these benefits will work. It will involve primary legislation, most likely in the next Session next year, and it will be rolled out some time after that. There will be plenty of time to ensure that we have thorough engagement with stakeholders, disabled people and those who represent them, to ensure that we get exactly those matters right.

In addition, our new Work Well partnerships programme —delivered through the health system—will pilot a new model for delivering integrated work and health support in local areas, providing employment-based targeted health support to prevent people from falling out of work or to enable a return to work quickly. For those who need more intensive help, there will be universal support. We will work directly with employers to quickly match people with jobs and provide up to 12 months of personalised place and train support. This approach means that after helping someone into work, we will stay with them to ensure that they remain in employment.

We are also investing to expand the additional one-to-one support that work coaches are already providing to disabled claimants in one third of jobcentres. From the spring, we will start to make this extra support more widely available, so that it is in place across the entire jobcentre network by 2024. We will also work with the occupational health sector and employers to reform the market and improve access to quality occupational health services. That will include testing financial incentive and support models to help small and medium-sized businesses and the self-employed overcome barriers to occupational health services.

[Chloe Smith (Norwich North) (Con)]

rose—

[Mel Stride]

It gives me great pleasure to give way to my illustrious predecessor.

[Chloe Smith]

My right hon. Friend is very kind. May I say how pleased I am to see this work making progress? Does he agree that all these factors together make for a golden opportunity to encourage employers to rise to the challenge and do more? All the support that he is laying out, and the major reforms that have been put on the table, also represent an opportunity for employers to recognise that they, too, will get support to encourage somebody to start with them, stay with them and succeed in their workplace.

[Mel Stride]

My right hon. Friend is absolutely right, and I thank her for what she did when she was Secretary of State, and before that as Minister for Disabled People, Health and Work. I am fully aware of the contribution that she made, having spent some months in the Department. She is right that we need to think about not just providing support on what one might say is the supply side, but making sure that employers are in the right place so that the demand is there. We see that across the various cohorts, including with Disability Confident and with those who interface with our 50-plus job champions, to make sure that they engage with more elderly workers in an appropriate way. She is right to raise that point.

There is little doubt that the experience and skills of older workers are a huge asset to our economy, but more than 1 million over-50s have taken early retirement. With them, they taken many skills and much experience from which business could benefit. Let me slay one myth: that older people will never return to work. We know that four in 10 50 to 65-year-olds who have left their jobs since the start of the pandemic would consider returning to work. Last year, we introduced a package of additional support for the over-50s, including DWP’s network of 50-plus champions, which is carrying out outstanding work. My right hon. Friend the Chancellor introduced significant encouragement to the over-50s through the changes he made to the lifetime allowance for pensions yesterday.

We know many people overestimate how far their savings and pensions will go in retirement, so to help more people in their 40s and 50s get a reality check about what retirement decisions mean for their long-term wealth and wellbeing, we are digitising the midlife MOT. This will deliver a fivefold increase in the number universal credit claimants who access the tool each year in jobcentres. We will also work with employers and pension providers to help nudge people to access it.

Gaining new skills and getting the right training and experience are vital to helping people move back into work, and that is why we are significantly expanding the number of placements in the DWP’s sector-based work academy programmes by 40,000 in the next two years, with around £30 million in funding just announced. Our new type of apprenticeship, returnerships, to be introduced by the Department for Education, will bring together the Government’s existing skills programmes, focusing on flexibility and previous experience and speeding up training.

Turning to parents and carers, we know that 1.7 million people say they are economically inactive because they have caring responsibilities. One of the biggest barriers to work is the affordability of childcare. To help parents return to work, the Budget expands the support on offer by providing 30 hours a week of free childcare for 38 weeks a year to eligible working parents of children aged nine months to 3 years. We will also increase support for parents on universal credit by paying the initial childcare costs for parents on universal credit up front, instead of in arrears, which we know creates one of the biggest barriers to moving into work. We are, as I have already stated, increasing the maximum amount that can be claimed.

It is right that people who can work and are available for work are helped to do so wherever possible. That is why I have put a particular focus within the DWP on testing and implementing new and innovative interventions that help unemployed people on universal credit to move into work and to support people who work only a small number of hours to progress. Through our additional jobcentre support pilot, we are rolling out daily work support across 60 jobcentres. That will occur over two weeks at two crucial points in a claimant’s journey when they are most at risk of falling out of the labour market.

We are also increasing the administrative earnings threshold in universal credit to increase conditionality. We are stepping up jobcentre engagement for partners in universal credit households who are not working or who have low earnings. Because this Conservative Government are on the side of young people, we are expanding the DWP youth offer to enable more people on universal credit to see a work coach in a youth hub or to benefit from the expertise of our youth employability coaches.

This Budget, together with our White Paper, will fundamentally change and enhance the effectiveness of the benefits system. It will provide more practical and financial support. It will boost participation in the workforce. It will turbocharge our labour market. It will unleash untapped talent up and down the country. It will pump renewed life into our businesses. It will strengthen our economy, and so strengthen our communities. It will still and will always be there to place an arm around those who need help the most. We on the Government Benches will never forget the power of work to change lives and to give to each and every one of us that vital chance—that gift—that employment brings.

--- Later in debate ---

[Chloe Smith (Norwich North) (Con)]

May I—possibly in advance of myself—welcome the hon. Member for West Lancashire (Ashley Dalton) to the House? I worked closely with her predecessor on the British Sign Language Act 2022, and I look forward to her also taking a close interest in related matters.

I support this Budget, because I think that the Government can help British businesses to grow and British people to succeed. The Chancellor is right to try to do both by focusing on employment, because he can help more people into jobs. Three quarters of UK companies struggle with labour shortages, although we are not alone in that internationally. With over 1 million job vacancies, employers have to find talent in new places. They should be open to the nearly 9 million people who have not recently looked for work—people who are, in the jargon, “economically inactive”.

That is more than one in five people of working age. They include people who have retired early, are long-term sick or disabled, or have caring responsibilities. Among those 9 million people, there are 1.7 million who say that they want jobs. If businesses do not match those people with their 1.1 million vacancies, the country is stunted. Too many people are being wrongly written off.

My right hon. Friend the Secretary of State for Work and Pensions is right, then, to look at why fewer Brits are participating in the economy. The Chancellor knows what all our constituents know—namely, that taxes must stretch to pay for every person who is on benefits rather than in work. I think we all also know that immigration is not the solution to businesses’ gaps if billions of pounds are spent in failing to get British workers fit for where their talents can take them. I understand the Government’s acknowledgement in this Budget that the UK labour market can have access to talent from abroad where needed. I see the Migration Advisory Committee’s recommendations to address short-term pressures, but as the MAC does its wider shortage occupation list review, which will conclude this autumn, I urge my right hon. Friend the Work and Pensions Secretary not to waver in putting the health and skills of our own workforce first.

Every unfilled vacancy is a missed chance for a person to gain skills and experience. The cost of having millions of people who are not in work but who could be in work is both billions of pounds and an appalling waste of opportunity. The human price of 2.5 million people out of work with long-term sickness is an even greater tragedy. We should be moving heaven and earth to treat them and help them to be well.

We know that work is good for health, but the NHS does not link up with work. Musculoskeletal problems and mental ill health are two of the most widespread constraints on people’s functional ability, but in many cases they are treatable. I welcome the Budget’s tailored employment support in mental health and MSK health services, as well as the expansion of the well-established and successful individual placement and support scheme. Those measures and a few others will support people with long-term health conditions to access the services they need, effectively manage their conditions and feel supported to return to or reman in employment. I will be particularly interested to see the results of the pilot of the new programme, Work Well.

In the autumn, the Chancellor correctly prescribed:

“The NHS must help people into work.”

It was welcome that he explained yesterday that, to implement this idea successfully, the Department for Work and Pensions and the Department of Health and Social Care will work together. That is vital. When I served as Minister for Disabled People, Health and Work, and later as Secretary of State, we made some progress, but there is much more to do to demand, define and deliver what citizens really need from public support across both health and welfare.

The Budget is sensible in further promoting occupational health; businesses also have to invest more to help people to stay healthy in the workforce, because British firms need a strong workforce of their own and have every interest in retaining brilliant people once they have recruited them.

I wish to touch on the doubters who say that the Budget targets too few people given the gaps in our workforce, the million vacancies out there and the millions of people who could work. To that argument I say that it is not all about what the Government can do; it is about employers and society as well. The Chancellor is right to pull the levers that he has, but he does not have all the levers. Businesses must plan and invest in both skills and health to get the workforce that they need.

Society must recognise the urgent imperatives of inclusion. If our buildings, high streets and transport networks are not physically open to people with disabilities, and the boulevards of our culture contain blocks as well, some people simply cannot take part. I argue for universal design—for inclusive design from the outset—for tangible and intangible things throughout our society, because it allows everyone to take part from the start. That is the right thing to do and, what’s more, it is the smart thing to do for businesses as well.

Across Government, business and society, now is the time for high ambitions. That is one reason why I welcome the bold reforms to welfare that are set out in the “Transforming Support” White Paper. The other reason that I welcome that publication is that I wrote most of it. I hope it remains a great read.

Work will not be right for all, but it is wrong that too many people are written off from even trying a job. Everyone should have the same opportunity for a fulfilling working life, regardless of whether they have a disability or health condition. Many disabled people say they would like to work, with the right support, and thousands had their say as part of the process to put the White Paper’s ideas together. We focused, therefore, on stepping up employment support; improving trust and transparency in the system overall; and reforming the system for the future so that it focuses on what people can do rather than what they cannot.

People need to have the confidence that they will have the support they require for as long as it is needed, without the worry of losing out if they try work. We should not encourage people to “pass a test” by proving how ill they are; we should not sustain a distortion and disincentive in the welfare system that stops people from trying work if that is suitable for them.

Hand in hand with reform goes more support, so the new universal support scheme will be welcomed. I hope that the Chancellor and my right hon. Friend the Secretary of State have heard the cross-party determination— I add my own voice to it—that access to work should keep pace. We have seen strong progress with more disabled people being in work, and we should build on this momentum by setting a new disability employment goal and capitalising on employers’ willingness and need to find new talent.

I also wish to reflect on the other employment measures that the Chancellor announced yesterday. He is right to take an approach that spans all the elements of the problem of economic inactivity—or, in other words, do things for all the people who want to work and whose talents are wanted—so we should welcome the childcare measures, the measures for the over-50s, the focus on flexible working and more. We should also look around the globe: we could learn from Sweden and from Japan’s ageing society; on ill health and disability, we could look to Australia; and on making sure that the workplace and everything related to it is open to all, Canada’s Accessible Canada Act sets a clear vision of a country with no disabling barriers by 2040.

We need a range of solutions, because people’s positions, problems, motivations and incentives vary. But make no mistake: we face an urgent imperative. We need to take steps now, because the goals of growing the economy and halving inflation are important ones. Continued labour shortages block growth and bring inflation. The Prime Minister is morally right to cut NHS backlogs anyway, but he must also do so with this urgent need in mind: to get British people and the British economy back on their feet together.

The Prime Minister will also need to demand delivery across all of government to deliver such a big and important goal. I would like to see continued accountability, under one Secretary of State, for the labour market and all the levers that the Government hold to help people to start, stay and succeed in work. This should include the wide-ranging work of the Minister for Disabled People, Health and Work and the ministerial disability champions who need to drive transformation across all of government—national and local—on behalf of disabled people who should not have to battle bureaucracy daily.

Together, Government and employers can bridge the gap in our labour market. Without the action outlined in this Budget, the gap will get even bigger, which would be a tragedy for millions of Britons. With the action in this Budget and the progress on which it builds—of which I am proud to be a part—we can help more British people to succeed. Everybody’s talents should be included in growing our economy.