Budget Resolutions and Economic Situation

James Cartlidge Excerpts

Thursday 16th March 2023 Commons Chamber

[The Exchequer Secretary to the Treasury (James Cartlidge)]

It is a real pleasure to conclude today’s debate. I am glad that the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) welcomed the measures in relation to the north-west and the Mayor. I join him in congratulating the hon. Member for West Lancashire (Ashley Dalton) on her brilliant maiden speech, which I very much enjoyed. I especially enjoyed hearing about the women of Ormskirk and their famous gingerbread. I understand that King Edward VII is rumoured to have stopped the royal train in Ormskirk to get his supply of gingerbread to take with him to Balmoral. Her speech was delivered with great passion and I was particularly pleased to hear her tribute to her predecessor, with which we all agreed.

Yesterday, the Chancellor delivered a Budget for growth —a Budget that builds on the decisions we took in the autumn to deliver stability and sound money; that provides a blueprint for prosperity that will spur on the economy and make us one of the most prosperous nations in the world; and that spreads opportunity. At the heart of the Budget is the steps we are taking to spread the opportunities of employment, to tackle labour shortage and to tear down the walls that stop people working.

Many Opposition Members said there was nothing in the Budget about public sector workers. I hope they will join me in welcoming the fantastic news we heard, less than an hour ago, that an agreement has been reached that will provide a fair and reasonable pay deal for health workers, from nurses to paramedics and midwives, thereby ending strike action across the NHS.

On the subject of workers in our brilliant NHS, we have seen today the most extraordinary U-turn yet by the Labour party. We should remember that barely six months ago the shadow Secretary of State for Health and Social Care, the hon. Member for Ilford North (Wes Streeting), told us that Labour policy was not to have a specific scheme for the NHS but to abolish the lifetime cap. Let me quote what he said six months ago:

“I’m not pretending that doing away with the cap is a particularly progressive move. But it is one that sees patients seen faster, and will inevitably save lives. I’m just being hard-headed and pragmatic about this.”

We totally agree with him.

[Mr Dhesi]

Perhaps the Minister would like to retract his statement, because I think he is inadvertently misleading the House. When the shadow Secretary of State said that, he referred specifically to that scheme for doctors, not for everybody. He was not talking about giving the 1% throughout our whole country—the rich—that huge tax cut.

[James Cartlidge]

The quote says,

“doing away with the cap”.

The removal of the cap is a tax measure that applies to all people who qualify for it. There is a really important point that Opposition Members probably want to listen to: there is a real danger in making up policy as one goes along. To be clear, our tax change will come in immediately, or as soon as we can possibly do it—it will come in on 6 April—but it is our view that a specific scheme for the NHS would take up to a year to put in place. Were we to bring forward an NHS-only scheme, the Department of Health and Social Care would have to consult on that scheme and then respond to the consultation. Only after that could it start to develop the scheme, because it could not predetermine the consultation. After that, the Department would have to transfer eligible people into the scheme. All that assumes that there would not be legal challenges from those who would argue that such a scheme should apply to other key people in the public sector, such as headteachers, senior police officers and senior people in the Ministry of Defence who might think that they too work hard in our public services. The Labour party has made it up as it has gone along. The fact is that Labour has U-turned from a perfectly sensible policy back to being ridden with the politics of envy, which we have heard from every single Opposition Member today.

Turning to some of the speeches, my right hon. Friend the Member for Norwich North (Chloe Smith) made an excellent contribution. She speaks with great expertise and passion on the matter of getting the disabled into work. She made the very important point that that is not just for the Government and that we also need to talk about the role that employers can play. I hope she will be pleased to hear that in the build-up to the Budget I, along with my hon. Friend the Minister for Employment and the small business Minister—my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—engaged directly with employer groups and worked with them to come up with some of the Budget’s proposals, particularly the extension of the occupational health subsidy pilot, the returneeship policy and boot camps for over-50s. Those are very positive measures.

The hon. Member for Glasgow South West (Chris Stephens) said that all the measures we have taken are on the backs of the poor, while the hon. Member for Jarrow (Kate Osborne) and other Opposition Members said that we have let down those on the lowest incomes. I remind the House that this year it is possible, for the first time, to earn £1,000 a month without having to pay any income tax or national insurance. We have doubled the personal income tax allowance since 2010, and in the last year we have increased benefits in line with inflation. On energy support, this financial year we have given a £650 cost of living payment to those on benefits, and in the financial year to come it will be £900. Those are not the actions of a Government turning their back on the poor. This is a Government taking difficult decisions to balance the books of this country, but in a compassionate way that helps those who have the least.

[Chris Stephens]

If the Government are doing so much for the poor, can the Minister tell us why in-work poverty is on the rise and why 40,000 civil servants, who work for this Government, are having to use food banks?

[James Cartlidge]

The key statistic is that since 2010 we have cut unemployment by 1.2 million. We have near record lows in unemployment and almost record highs in employment. Of course, we want to go further.

I am glad that the Chairman of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), welcomed some of the Budget’s measures, particularly the important increase in the universal credit childcare cap and aspects of the White Paper. I am sure he is looking forward to engaging in detail with my right hon. Friend the Work and Pensions Secretary, who is sitting next to me.

My right hon. Friend the Member for Chipping Barnet (Theresa Villiers) was absolutely right to say that the Prime Minister has set these targets and that this year we are making fantastic progress on three of them. Inflation is set to more than halve this year. That is not a minor detail. Inflation—driven, after all, by Putin’s invasion of Ukraine—has been the biggest reason why there have been problems with growth in countries all around the world. She also made very important points about the extension of the energy price guarantee. Yes, inflation is falling, but that shows that we continue to take steps to support people with the cost of living. We know that those pressures have not completely gone away. The elevated prices of food and other products in our shops have all come from that surge in energy prices. That is why we have extended the energy price guarantee and continued the freeze on fuel duty and the 5p tax cut on petrol and diesel for motorists.

The hon. Members for Eltham (Clive Efford) and for Easington (Grahame Morris) both put forward some very interesting proposals, which I hope have been noted by shadow Front Benchers, for a range of new wealth taxes to undermine the competitiveness of the UK. If there has been a theme among Opposition Members today, it has been a return to the politics of envy and of undermining aspiration and competitiveness.

My hon. Friend the Member for South Dorset (Richard Drax) made an excellent point. We may exchange views on which taxes we should take action on, but he reminded us of the reason why we have had to take those difficult decisions. It is because of huge external factors that Opposition Members do not like to talk about. They include a pandemic, followed, literally, on 24 February, the day on which the pandemic regulations ceased, by Putin’s invasion of Ukraine. It has been an extraordinarily challenging time, requiring us to put in place £390 billion of additional support. We can debate whether it should have happened, but it did happen and, as my hon. Friend the Member for Thurrock (Jackie Doyle-Price) has said, that has consequences for taxes and we have had to take those difficult decisions.

I also agree with the very important point made by my hon. Friend the Member for South Dorset about energy security. He is absolutely right. We are proud of the huge progress that we have made in reducing our emissions, at a faster rate than any other G7 country. Last year, 40% of our electricity was from renewables. The figure in the United States was just 20%. Yes, we welcome the steps that the US is taking through the Inflation Reduction Act 2022, but no one should be under any illusion that we are not making huge steps forward ourselves. However, we must always remember the role of energy security, which is why my hon. Friend the Member for South Dorset is right that, rather than turning our back on the North sea as others have suggested, we should be maximising the UK’s domestic supplies of energy. That is why I hope that colleagues will welcome the steps that we are taking in respect of small modular reactors. There was also the important announcement, which was welcomed by several Opposition Members, including the hon. Members for Preston (Sir Mark Hendrick) and for Stockton North (Alex Cunningham), of £20 billion investment in carbon capture and storage.

I am delighted that my hon. Friend the Member for Milton Keynes South (Iain Stewart), the Chair of the Transport Committee, welcomed the news on East West Rail, which we have had exchanges on in previous Treasury questions. He is absolutely right about the central role that new infrastructure plays in driving growth and connectivity, and I hope that the announcement brings great benefit to his constituents.

[Alex Cunningham]

I am grateful to the Minister for acknowledging the support for carbon capture and storage, but this must be the start of the investment. We need another wave of investment followed by another wave after that. Are the Government really committed to it?

[James Cartlidge]

We have announced £20 billion of funding, which shows the strength of our commitment. We want to decarbonise and continue our rapid progress to net zero, but, along the way, we must maintain energy security, otherwise what have we learned from what has happened in the past 12 months, following the invasion of Ukraine? Our constituents want to know that we will do everything possible to grow the supply of UK domestic energy.

[Sir Mark Hendrick]

rose—

[James Cartlidge]

This is the last time I shall give way.

[Sir Mark Hendrick]

Is the Minister aware of Newcleo, a British company, that will burn waste plutonium in Cumbria without public subsidy or recourse to public funds, but purely with private investment?

[James Cartlidge]

I am not aware of that specific company but the hon. Gentleman is welcome to write to me. None the less, he is right to talk about the need for private investment.

Another important step that we took in the Budget, which the hon. Member for Inverclyde (Ronnie Cowan) referred to—I am not sure whether he was supportive of it—was changing the taxonomy so that we encourage more private investment into nuclear, which is so important.

[Ronnie Cowan]

rose—

[James Cartlidge]

I apologise, but I cannot give way. I only have two and a half minutes left. The hon. Gentleman made a very entertaining speech and I enjoyed what he said on hemp, and I hope that he writes to the Secretary of State for Environment, Food and Rural Affairs to pursue that.

Yesterday, the Chancellor unveiled the biggest ever employment package. In the knowledge that, following Brexit, we will move from an employment model based on unlimited low-skilled migration to one based on high wages and high skills, we brought forward a set of major reforms to remove barriers to work. We have incredible potential. The World Bank has said that, out of all big European countries, we are the best place in which to do business. In the sectors of the future, we lead the world—whether that is financial services, life sciences, advanced manufacturing, creative industries or tech, but those sectors, and the entire economy, need a pipeline of talent. That is why we are introducing reforms that say to those who are long-term sick or have a disability that we will help you into, and at, work; reforms that ensure that those who can and want to work, do work, because independence is always better than dependence; reforms that help some of the most experienced people back into work; and reforms that mean women are no longer held back by the cost of childcare. With those reforms, we can grow our economy.

Ordered, That the debate be now adjourned.—(Scott Mann.)

Debate to be resumed Monday 20 March.

Health and Social Care Levy (Repeal) Bill

James Cartlidge Excerpts

Committee stage
Tuesday 11th October 2022 Commons Chamber

[Steve Brine]

I know why Dame Rosie is smiling: she thinks that I have possibly attempted to fit my Second Reading speech into this response to new clause 1. If I go down the road of energy policy, I may test her patience. All I would say to my hon. Friend is that, if the energy price guarantee was a price cap, and people could not pay more than the amount at which the cap was set, there would be some argument for not having a public campaign advising people on their energy use. It is not a cap; it is an energy price guarantee. If people use more energy, they will pay for more energy. It therefore seems logical to me, on lots of levels, to help people save energy—but what do I know?

I was just coming to diabetes. The NHS spends about £10 billion a year—that was about 10% of its budget, when I was in the Department—on diabetes care. That is a phenomenal amount of money, yet type 2 diabetes is preventable and, as we have heard from Members, people can turn it around. Why would we not want to encourage people to manage their weight better, when weight is one of the big drivers of diabetes?

Finally, stoke is a big killer in this country. It costs the NHS billions. During conference recess, I visited a group in my constituency called Say Aphasia—I figured it was a better use of my time. I met a group of 15 men who had had strokes. One was two years younger than me. They had severe communication difficulties. I see my hon. Friend the Member for Bury St Edmunds (Jo Churchill), a former public health Minister, by the Front Bench. She knows what I am going to say. Why would we not want to help the NHS prevent stroke through a proper salt reduction strategy? Given my surname, when I tried to suggest one to the Department, it caused some amusement among officials, but I think it is the right thing to do. If we cannot prevent stroke, I will meet a lot more people like those I met in the Say Aphasia group last week. Their ongoing cost to the NHS is significant.

In conclusion, the point I am trying to make, and maybe I am not making it very well, is that, if we do not believe in prevention—and in my heart I believe that those on the Front Bench do believe in prevention—the costs of the NHS predicted in the OBR book are going to look quite conservative. I think I am right in saying that those projections include this levy being in place, not repealed—

[James Cartlidge]

And corporation tax.

[Steve Brine]

And corporation tax, as my hon. Friend says from a sedentary position. If we believe in prevention—and, as I say, I believe that those on the Front Bench do—we need to have the courage to act on that. That will mean doing unpopular things, but sometimes we have to do unpopular things to do the right things, and that means preventing some of the major killers and some of the major causes of ill health that I have mentioned. If we do not do that, the NHS will continue to cost unsustainable amounts of money and it will become unsustainable. There endeth the lesson of Dr Brine.

Universal Credit and Working Tax Credits

James Cartlidge Excerpts

Wednesday 15th September 2021 Commons Chamber

[Jonathan Reynolds]

My hon. Friend is exactly right. The reduction of £20 a week for 6 million low-income families will be the single biggest overnight cut in the history of the welfare state—bigger even than the cut to unemployment benefit in 1931 that caused the Government of the day to collapse. The scope of the cut, affecting one in 14 British workers, is also unprecedented. For those reasons alone, it is right that we are having this debate and that our constituents know where we stand.

[James Cartlidge (South Suffolk) (Con)]

The hon. Member is courteous in giving way, but his proposal would cost £6 billion. Which tax would he raise to pay for that?

[Jonathan Reynolds]

Will the hon. Member tell me how many households in his constituency are in receipt of universal credit? I am giving him a chance to put on the record how many of his constituents are affected. There is a whole section of my speech in which I will tell him how the Government can afford to pay for this.

I did not know that the hon. Member did not know the figure for his constituency—I promise that I was not trying to catch him out. I was simply trying to make the point that the recovery of his local economy would be adversely affected by taking that spending power away, as my hon. Friend the Member for Wallasey (Dame Angela Eagle) made clear for her constituency.

--- Later in debate ---

[Jonathan Reynolds]

In the right hon. Member’s constituency, 4,000 households are in receipt of universal credit. I want to ensure that, at the beginning of the debate, we knock down the argument, which we have also heard from the Prime Minister, that a focus on jobs will somehow mean that we do not need to keep universal credit at its current level. Of course we should get people back into jobs, but it is simply false to say that the choice is between keeping the uplift and doing that.

Let me remind the House again that universal credit is an in-work benefit. Almost half of the incomes that Government Members wish to cut are of people in work. Either the Prime Minister, the Cabinet and several Conservative MPs do not know how universal credit works or they are being wilfully misleading. I do not know which is worse. Let us have a real debate rather than this ignorant rhetoric about work or welfare, because—this is the crucial point—if as a country we could get the people affected into better-paying jobs, the cost of keeping universal credit at its current level would go down automatically. That is exactly how the system is designed to work. Anyone saying that the cut needs to happen to get people back into work, or to get them working more hours, does not know what they are talking about.

[James Cartlidge]

rose—

[Jonathan Reynolds]

I will give way to the hon. Member one more time.

[James Cartlidge]

The hon. Member is kind. I hope he will answer my intervention rather than re-intervene on me; I found that very odd earlier. Is it better in principle that people receive £20 through the benefits system or through going into longer hours, with more progress in work and building up a career where there is no limit on what they achieve?

[Jonathan Reynolds]

Of course it is better that people are in work, but the whole point of reform in this area over the last decade and a half has been to try to create a system that integrates with the world of work. I cannot see how the hon. Member does not understand that. I cannot see the logic in his argument that a cliff edge is necessary for the outcome that he wishes to see.

--- Later in debate ---

[Jonathan Reynolds]

I have dealt with this intervention before—being involved in so many Finance Bills does give that experience—and that is false; a quick Google search will put the record straight for the hon. Gentleman.

The great Labour Government after the second world war who created the welfare state, built 1 million council houses and created the national parks while having to deal with demobilisation after the war are not hugely relevant to people who want to cut £20 a week from 6 million families today. But I will always defend the post-war Labour Government, the greatest Government in the history of this country.

[James Cartlidge]

Will the hon. Gentleman give way?

[Jonathan Reynolds]

No, we have had enough history and the hon. Gentleman has intervened twice; we can look forward to his speech.

In relation to the tax rises announced last week, the combination of this cut and the rise in national insurance is absolutely outrageous. As many as 2.5 million families will lose £1,300 a year. This Government are already a high tax Government, and due to that and the decision to freeze personal allowances and hike council tax combined with the much lower than expected Government borrowing costs, projections are already coming in for the October spending review suggesting that there is far more room for manoeuvre than anyone previously thought.

The Resolution Foundation, the most respected analyst of the labour market and welfare state in the country, said last week that the Chancellor

“will be significantly boosted by the good news the Office for Budget Responsibility (OBR) will deliver within its updated forecasts on 27 October. Borrowing this year is likely to come in several tens of billions lower than expected, having already borrowed £26 billion less than previously forecast in the first four months of 2021-22. More importantly, if the OBR moves its forecast for the long-term scarring effect of the pandemic on the British economy (currently 3 per cent of GDP) into line with the more optimistic consensus (the Bank of England now expects scarring of just 1 per cent) he will have a windfall that lasts, possibly to the tune of around £25 billion a year.”

I believe the final forecast might be slightly less generous than that, but the point remains that a decision to keep UC and working tax credit at the current levels could be made within the fiscal headroom the Chancellor already has when the spending review takes place.

As the Resolution Foundation made clear,

“To govern is to choose”,

and the question for hon. Members today is do they really believe that those on the lowest incomes, in some of the hardest jobs in the country, who got us through the pandemic, should take a disproportionate share of the burden going forward? Is that fair, is that a recipe for national success and is that ensuring our country is as resilient as it needs to be to meet future challenges? No, no, and no again.

Looking to the future, I want to replace UC with a better system because I recognise that the argument we are having today over the core amount is not the only problem: the five-week wait is a huge issue for people; the level the taper rate is set at is wholly wrong; and people should be able to keep more of the money they earn. Fundamentally, the Treasury caused a huge problem by causing UC to be associated for many of our constituents with austerity, cuts and sanctions, but that is an argument for another day. The choice we have to make right now is whether to proceed with this cut and, whichever way we look at it, we should not. I hear there are rumours that a reshuffle is under way. As Members will know, if a Cabinet Minister were to lose their job today and return to the Back Benches, they would receive a pay-off of £15,000. Will anyone in this debate say that that is unaffordable? It always seems to be a different rule for the people we are talking about than for everyone else in the country.

I implore Members to think about the wide-ranging effects of their decision in this place today. Charities say that the cut will cut a lifeline to millions. Economists say it will suck spending from our local high streets. Even the Government’s own internal analysis makes it clear that it will be catastrophic. No one in this House can say they did not know. No one will be able to say they were not warned. The effects of this cut are clear as day. It is wrong for our constituents, wrong for the British economy; quite simply, it is wrong for Britain. Conservative Members have a choice to make. I, and the millions this cut will hit, implore them to see sense, back the families who sent them here, and cancel the cut.

--- Later in debate ---

[Sir Desmond Swayne]

rose—

[James Cartlidge]

rose—

[Dr Coffey]

I give way to my honourable neighbour from Suffolk.

[James Cartlidge]

I am grateful to my right hon. Friend and neighbour, who is making an excellent speech. She is right to highlight the resilience of the universal credit system, but on the point that is made about taking money out of local economies, is that not an insult to John Maynard Keynes? Is it not a fact that if individuals get more hours and better-paid work, there will be more money going into their economies, and on a more sustainable basis?

[Dr Coffey]

I would not normally rely on John Maynard Keynes to help the cause, but undoubtedly, there is an element of investment; we are seeing plenty of investment by the Government in our economies and in businesses in support of that, not least the £650 billion programme announced by my right hon. Friends the Prime Minister and the Chancellor earlier this week, which we estimate will generate an extra 425,000 jobs just in the next few years. We want people to have more take-home pay. That is why we have pursued increases to the national living wage, which is now at 60% of median earnings. The intention is that it will reach 66% of median earnings before the end of this Parliament—and that is just the minimum. We want people to have high-skilled, high-paid jobs, and that is why our plan for jobs is all about helping people take advantage of the support that is there.

--- Later in debate ---

[James Cartlidge (South Suffolk) (Con)]

It is a pleasure to follow the hon. Member for Halifax (Holly Lynch).

This is not a decision anybody or any Government take lightly. Members in all parts of the House are right to raise the real-life cases to which they refer; these are our constituents and the people we are sent here to represent. I have the greatest respect for the former Secretary of State, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), and for my hon. Friend the Member for Carlisle (John Stevenson), who I know feels strongly on this subject. He talked about the need to level up through raising real wages. I totally agree with him on that, and I will be coming back to that point.

However, I wish to start by focusing on the opening remarks of the hon. Member for Stalybridge and Hyde (Jonathan Reynolds). I have a lot of time for him. He puts his case in a very reasonable tone, and I am sure he feels as passionately about his views as I do about mine. His argument was, in essence, that Conservative Members do not understand the benefits system and the fact that some people in work receive these benefits. That is very far from the truth. Let me share with him my real-world experience. I have put this point on the record several times in these debates, because it is incredibly important to understand this.

Before becoming an MP, I ran a small business. We decided to award pay rises, and I was shocked when three members of staff declined: one declined the actual pay rise and the other two would not work more than 16 hours. I admit that at that point I did not know about the tax credits system—I had never claimed on it myself and I had not employed people on it—but I then discovered the hard reality of its cliff edges. When two skilled members of staff said to me, “James, I’m sorry but I just can’t do more than 16 hours because of this cliff edge,” I realised the insanity of that—of the state spending billions to put a ceiling on people’s working life and ambitions and on the limits to what they can achieve.

We should never have any ceiling on ambition; we should always seek to enable people to make the most of the natural talents with which everyone is born. That is a fundamental view that I hold, so although this issue is very difficult—I accept that people will be affected, including in my constituency—the Government are, fundamentally, doing the right thing.

We have to consider three key points, the first of which is the impact on individuals, which is the hardest part. It is a question of the extent to which one has faith that individuals can work the extra hours, and that in a vibrant economy with 1.2 million vacancies they can recover that income—and far more, over time—either by working more hours if they are in work or, if they do not have a job, by moving into work.

[David Linden]

Just short of two hours ago, the shadow Secretary of State, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), asked the hon. Gentleman how many households in his constituency will be affected by this cut; has he been able to work that out in the past two hours? If he does not know that figure, it would be reckless for him to go through the Lobby today and vote for this cut to his constituents.

[James Cartlidge]

That was quite an odd moment because, as the hon. Gentleman will have noticed, I intervened on the shadow Secretary of State and, slightly cheekily, he then intervened on me, in a completely novel form of Commons procedure. No, I do not know that figure off the top of my head. I represent those households in this House and I know some of them, and we all know that this change will cause issues. This is not an easy decision, and, as I said at the beginning of my speech, it is not taken lightly, but I have faith in our economy. There are 1.2 million vacancies and the owners of small and medium-sized enterprises—such as me—and the owners of big businesses are crying out for labour. They are desperate for staff.

On 5 August, the Governor of the Bank of England, Andrew Bailey, said something incredibly important:

“The challenge of avoiding a steep rise in unemployment has been replaced by that of ensuring a flow of labour into jobs.”

What a position to be in. At the start of the pandemic, we were all fearful that we would see a huge rise in unemployment—probably one of the biggest in generations. The peak was predicted to be 2 million higher; that is an entire recession’s worth of unemployment. I am proud of what we have achieved in keeping unemployment far lower than that, because it is so damaging.

On the impact on individuals, therefore, we must look to the economy and the extent to which people can work the extra hours to make up the lost income, which I am confident people can. The second key point is the impact on the public finances. It would be extraordinary for us, who are charged with being in Parliament to hold the Executive to account for the moneys they raise, not to consider that impact. The hon. Member for Stalybridge and Hyde said from the Labour Front Bench that we could use the headroom to fund the £6 billion, which basically means borrowing the money. But this commitment will be permanent. The hon. Gentleman wants to use what is potentially a short-term position in the public finances to fund a permanent increase in the welfare state.

Here is the context. Labour has said that, one way or the other, it will keep the triple lock—perhaps not the exact scheme, but it would cost several billion pounds more than the cost of the decision we have made. Labour has also said that it would keep the overseas development spend at 0.7%. Those commitments amount to more than £10 billion, and possibly to £15 billion. It is not good enough simply to say, “Use the headroom.” We know what happened when we had a Labour Government who were irresponsible with public money: we had the great recession and all that that meant for people’s livelihoods and for the poorest in society in particular.

The third key point is the impact on the wider economy. As the Governor of the Bank of England said in the quote that I read out, the issue that we now have is not mass unemployment, as we all feared, but a lack of workers. In many ways, that brings its own headaches. Going back to the point made by my hon. Friend the Member for Carlisle, the upside is that we could be moving into a new era in which those on lower wages see much higher real-terms pay growth than they would otherwise have had. That is an incredibly important development. The focus of Government policy should be to improve real wages, bring unemployment down even further, manage the public finances responsibly and drive the economic recovery forward. That is the correct thing to do.

Universal Credit: Delayed Roll-Out

James Cartlidge Excerpts

Tuesday 4th February 2020 Commons Chamber

[Will Quince]

I hope you recall, Mr Speaker, that I did make a full, frank and unreserved apology in this Chamber. As for the case that the hon. Lady raises, if she would like to write to me with the details, I will happily look into it. There are strict Treasury rules about errors and deductions, but I will be happy to look at them.

[James Cartlidge (South Suffolk) (Con)]

Will my hon. Friend confirm that today’s announcement does not change the fundamental course of our policy, which is to move away from a perverse legacy system that incentivised claimants to minimise the number of hours worked to one that incentivises them to maximise their hours and gives them a chance to move away from long-term benefit dependency?

[Will Quince]

I thank my hon. Friend for that question and for his support for universal credit and, indeed, his local jobcentre. We believe that work should always pay, and we need a welfare system that helps people into work, supports those who need help, and is fair to the taxpayers who pay for it. It is important to stress—my hon. Friend is right about this—that it always pays to work and increase one’s hours under universal credit. That was not the case under the legacy benefit system.