Budget Resolutions and Economic Situation

Christian Wakeford Excerpts

Thursday 16th March 2023 Commons Chamber

[Mel Stride]

I point the hon. Gentleman to page 9 of the distributional analysis that accompanied the Budget, where he will find that those in the lowest income deciles proportionally benefit the most from the measures in this Budget. It is thoroughly progressive. I urge him to look at page 9 of the distribution report, where he will find his answer.

This is also a Budget for people who are looking for work and want to earn more, with more intensive support through jobcentres to help people to get a job or increase their pay. In total, my Department’s measures in this Budget represent an investment of £3.5 billion to boost workforce participation.

[Christian Wakeford (Bury South) (Lab)]

To go back to the childcare proposals, they have the potential to be transformative, although the Chancellor did say that they will not fully come into force until 2026. For someone who has a one-year-old or a two-year-old now, their child will be too old to benefit. What is being done to help parents who are struggling right now?

[Mel Stride]

The answer to the hon. Gentleman’s inquiry is in the early measures, which I was going to come on to. The Chancellor has dealt with the one-month requirement for the up-front payment by making it clear that jobcentres will fund that payment. That will come in in the short term, as will the increase in the cap—the maximum amount that those who claim those benefits can receive.

Before I come on to specific measures in detail, I think it is important to put workplace participation in the wider context of a robust and resilient UK labour market and economy. As confirmed again by Tuesday’s labour market statistics, unemployment is at a near-historic low of 3.7%, payroll employment is at an all-time high and economic inactivity continues its downward trend. However, there are still 1.1 million job vacancies, and we have many people who could work and want to work, but who do not work. This Budget will help to unlock that potential and fill the vacancies. It builds on our key Conservative belief that we should make work pay, and on our sustained efforts to reward and incentivise employment to get more people into work. That is why, as well as keeping unemployment low, I am determined to see participation in the labour market continue to rise and inactivity fall. In doing so, we will see more people fulfil their potential and more employers get the skills they need to support their businesses and ensure the economy grows for the future.

Over the past few months, I and my Ministers have been leading work across Government to look in detail at the issue of participation in the labour market. I have looked carefully at the cohorts that make up the 8.9 million inactive people in the economy and the nature of the barriers these groups face, and I and others have thought innovatively about how we can help many of them into the workforce. That involved examining in detail international comparators, as well as engaging with a wide range of stakeholders and experts, and I thank in particular those who served on my expert panel.

It is clear from this work that concerted action across the board is required, and yet it is important to recognise that the level of economic activity in the UK is lower than in the United States, France and Italy. It is below the EU average and below the average of OECD countries. However, it is equally important to recognise that, whereas for most other comparable countries the increase in inactivity that occurred during the pandemic has since returned broadly to its pre-pandemic level, in the UK it has remained elevated. So this Budget focuses on economic inactivity and on the key groups that I considered in my review: disabled people and those with health conditions, the over-50s, parents and carers, and people looking for work or working a low number of hours.

We know that many disabled people and people with health conditions want to work and benefit from the positive impact on health and wellbeing that employment can bring. We have made good progress, contrary to the remarks of the right hon. Member for Leeds West. There are over 1 million more disabled people in work compared with 2017—a milestone that I am particularly proud of and that we marked last year, having delivered on this commitment five years early. That is a record of which this Government can be proud.

--- Later in debate ---

[Christian Wakeford (Bury South) (Lab)]

It is an honour to follow the hon. Member for Darlington (Peter Gibson), although he appears to have listened to a slightly different Budget statement yesterday.

I would like to start by welcoming my hon. Friend the Member for West Lancashire (Ashley Dalton) to her place and congratulate her on her magnificent maiden speech. It is certainly an achievement to not mention any roundabouts whatsoever when talking about West Lancs.

This Budget was a huge opportunity for the Government to make amends for the previous Prime Minister they burdened us with and the kami-Kwasi Budget that they unleashed on the country. But it is an opportunity that the Government missed. This could have been a Budget for workers, but it was not. This could have been a Budget for health, but it was not. This could have been a budget for justice, but it was not. This could have been a Budget for growth, but it really was not. This could also have been a Budget for education, but guess what? It was not.

What we got was a sticking-plaster Budget from a Government on life support. There was nothing for public sector workers, nothing to tackle court backlogs, nothing for dentistry and nothing for health inequalities. Growth has been downgraded and we have the biggest fall in living standards since records began. Is it any wonder that the proud people of this country are living without any hope, wondering how they will get by? They lie awake at night waiting for the next heating bill and are filled with dread as that brown envelope comes through the letterbox. They have no chance to save, their dreams of buying a home are dashed, the fridge grows ever emptier and they have no money to fill it. This is a Budget that lets the people of this country down. Quite frankly, they deserve better.

I will, however, go on record to give credit to the Chancellor for the action on pegging alcohol duty to inflation. Having previously accompanied alcohol-related charities to a meeting with the Exchequer Secretary, I know that that is hugely welcome and I thank him for it. The action taken on prepayment meters will also help many of my constituents. Such actions can and will save lives, and I give credit where it is due on those two matters.

However, among G7 countries we have the lowest rate of business investment and are likely to have the weakest economy and to be the only country with negative growth. The list of self-inflicted problems on the Chancellor’s desk must have been piling up so high that it was possible to see them from Trafalgar Square.

The problem that persists is that of childcare. One third of parents who use formal childcare say that they have to rely on some form of debt just to pay for it. One in four parents also say that childcare costs now account for more than three quarters of their take-home pay. Although action is welcome, without any new investment I am afraid that it is doomed to fail. It does not benefit people who have children now, and there are so many questions about whether it will benefit them at all. Will it cut the cost of childcare? Will it deliver high-quality childcare for every family? Will it deliver the growth that our country needs?

But not to worry, because the Budget had some of the tax cuts for which Government Back Benchers have been begging. To be fair, the Government have borrowed the money—£1 billion, to be precise—from the magic money tree. I am afraid, however, that this is not good news for nurses, junior doctors or people who work in retail, and it is definitely not good news for posties, firefighters, teachers or cleaners. In fact, it is not really good news for anyone other than the Government’s friends in the City, who they seem to care about so much. Yes, abolishing the lifetime allowance and increasing the annual allowance paid into pensions will affect about 1% of people in this country, but they happen to be the wealthiest 1%. That is the Chancellor’s answer to the cost of living crisis—giving more bankers a tax cut.

I heard the Chancellor this morning trot out the line that this is to help doctors, but that gives rise to a question. If this really is about doctors, why not introduce a bespoke scheme similar to that suggested by the shadow Health and Social Care Secretary, my hon. Friend the Member for Ilford North (Wes Streeting)? A conscious and political choice has been made to ignore the people of this country who are struggling to make ends meet, while at the same time giving all higher earners the benefit of a further tax cut.

If the Chancellor wanted to help the NHS, he would have found the money to pay for nurses and junior doctors, and to bring down waiting lists, but they were not mentioned in the Budget statement. Right now, a junior doctor on the lowest band level in Bury earns less per hour than a barista in Pret. They have also experienced a wage decrease of more than 14%, while nurses have experienced a decrease of more than 10%. People in Bury South are waiting on average eight weeks for a mental health appointment, 28 days for a GP appointment and over a year for an operation. That is before we get to the complete impossibility of accessing a dentist. In 2023, this is the Government’s legacy for the NHS, and it is not one that anyone is proud of.



Let me be clear: only a Labour Government will improve the NHS, reform the justice system, raise education standards and provide growth to the country. Only a Labour Government can protect the country from this reckless Conservative party, which is increasingly out of touch and out of ideas, and thankfully, running out of time.