Labour Market Activity

James Murray Excerpts

Tuesday 28th February 2023 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Yesterday, the Leader of the Opposition and the shadow Chancellor set out details of what would be Labour’s first mission in government. The goals of that mission are clear and unashamedly ambitious: to secure the highest sustained growth in the G7, with good jobs and productivity growth in every part of our country.

We know that continuing on the path on which this Government have set our economy will cost people dear. If we continue on that path, we will be poorer than Poland by 2030 and poorer than Romania by 2040. We are being left behind, and people are feeling the impact as they find themselves worse off in their daily lives because of low economic growth under the Conservatives. That is why our mission to achieve the highest sustained economic growth in the G7 is so important: to ensure that everyone in our country is better off.

In setting out the details of our plan, we have made it clear that economic credibility and stability are the bedrock of our approach. Under our plan, we would seize new opportunities for Britain, including catalytic public investment through our green prosperity plan. Under our plan, we would fix the problems that hold back economic growth across the UK by supporting people of all ages and in all places in the country to develop the skills that they need to fulfil their potential and contribute to a growing economy. It is crucial that everyone in the UK can play their part in growing our economy, as my hon. Friend the Member for Leicester West (Liz Kendall) set out in her excellent speech. That is why this debate is such an important part of our approach to the economic future of our country.

When it comes to ensuring that everyone can play their part, it is clear that something is not right when we have near-record vacancies while hundreds of thousands of people who want to work are not being given the support they need to do so. It cannot be right that more than 1 million people are out of work, even though they want jobs, while employers are struggling to fill more than 1 million vacancies. We know that is the result of rising economic inactivity and the Government’s failure to respond to it.

The situation has become more acute in recent years. There are now half a million more economically inactive people of working age than there were before the pandemic. Across London, which includes my Ealing North constituency, 22,400 more people aged 50 to 64 became economically inactive between the start of the pandemic and last September. As greater numbers of older people have been leaving the labour market, we also know that many people are becoming economically inactive as a result of ill health or mental ill health. Long-term sickness has risen fastest in younger age groups, with the biggest increase being for mental health. We all know that the longer a young person is left without work because of ill health, the greater the risk to their life prospects. That is why we need a Government who will help those who want to work but do not have the support that they need.

As the shadow Secretary of State, my right hon. Friend the Member for Leicester South (Jonathan Ashworth), set out, we have a plan to reform the way in which people receive help to get back into work. We would reform employment support and the work capability assessments regime, and fix the Access to Work scheme. We would ensure that there is help for the over-50s, so that those who have recently left the labour market have support and guidance to help them back into work. We would ensure that there is specialist help for those with long-term ill health by building on targeted programmes, including those that join up with the NHS.

Crucially, we would focus on locally delivered services by giving local partnerships the freedom to decide how best to design services, with a focus on tailored support that meets the needs of the local area. Under our plans, combined authorities and local areas would take control of employment support budgets. We would move away from rigid national contracting and ensure that the resources needed to help people find work are closer to the communities that we serve.

Those are our clear principles for reform. It is clear that reform is urgently needed, as the Government already spend billions on employment support programmes that are failing. Making these reforms happen and supporting people of all ages and in all places to contribute to a growing economy is a crucial part of our mission. As the Learning and Work Institute has estimated, increasing employment to the highest in the G7 over the next decade should boost our economy by £23 billion, improve the public finances by £8 billion and raise household finances by an average of £830 a year. That is why today’s debate is so important. By following our plans, the Government could get Britain back to work, help to grow the economy after more than a decade of stagnation and make sure people in every part of our country are better off.

Health and Social Care Levy (Repeal) Bill

James Murray Excerpts

Committee stage
Tuesday 11th October 2022 Commons Chamber

Brought up, and read the First time.

[James Murray]

I beg to move, That the clause be read a Second time.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to consider new clause 2—Assessment of revenue effects on health and social care of increases in the rates of taxes on dividend and capital gains income—

‘The Treasury must lay before the House of Commons within 30 days of the date on which this Act is passed an assessment of the merits of raising at least the same amount of revenue for health and social care as would have been raised by the health and social care levy by instead bringing the rates of taxation on dividends and capital gains income in line with existing rates of taxation of earnings.’

This new clause would require the Treasury to report on an alternative to using the health and social care levy to fund health and social care, by raising more tax revenue from dividends and capital gains.

Schedule stand part.

[James Murray]

We know that the Bill is straightforward in what it seeks to achieve: as clause 1 sets out, it simply repeals the Health and Social Care Levy Act 2021. Ministers are asking us today to overturn a piece of legislation that they and their colleagues strained to defend and voted in favour of a little over a year ago.

As I set out on Second Reading, we welcome Ministers scrapping the tax rise on working people introduced by last year’s Act, but while the levy was not due to come in until April 2023, and the Bill means that the levy will never be charged, the Act also raised national insurance contributions for the current financial year 2022-23 as a transitional measure. As clause 2 confirms, the Bill keeps national insurance contributions at that higher level for the first seven months of this year, before letting them return to their previous levels from November. The decision by Ministers to scrap the national insurance rise is, of course, better to have come late than never, but this in-year change means that yet another cost will be paid for through working people’s taxes, as public money pays to undo the mess created by the Tories having made the wrong call last year. The explanatory notes to the Bill confirm that there will be a cost of an in-year change. Under “Financial implications of the Bill”, they state:

“HMRC anticipates increased call volumes and customer contact as a result of the in-year reduction of NICs rates. There will be delivery costs in implementing this policy. IT changes will be required to be delivered at additional cost to HMRC, to support safe delivery of this policy.”

All this could have been avoided if Ministers had simply listened to people across the country, to the Opposition, to Members on their own side, to the Federation of Small Businesses, the British Chambers of Commerce, the CBI, the TUC and so many others. If Ministers had listened, they would have realised that it was wrong to go ahead with this tax rise on working people in the first place. While we know that the U-turn before us will cost more than if Ministers had made the right call last year, we do not have a figure from the explanatory notes for exactly how much this will cost. On that point, the Bill’s notes simply say that

“Costings will be set out in due course.”

In other times, I might have read that statement and concluded that Ministers genuinely do not know the costings, but if their behaviour over the OBR report is anything to go by, it could be that they are simply refusing to publish those costings for political reasons.

It is because of this Government’s lack of willingness to subject themselves to transparent scrutiny that we have tabled new clause 1. New clause 1 would require the Chancellor to publish a report on the financial implications of the Act on the day that it comes into force. That report must make an assessment of the Treasury’s plans to raise an amount of revenue equivalent to the proceeds of the levy in the context of its approach to general taxation and borrowing.

As I mentioned on Second Reading, the Economic Secretary to the Treasury confirmed in a letter sent to the shadow Chancellor and the shadow Secretary of State for Health and Social Care on 22 September that:

“The additional funding used to replace the expected revenue from the Levy will come from general taxation and may require further borrowing in the short-term.”

We already know that borrowing is set to soar thanks to the Government’s disastrous and discredited approach to the economy. We know that their approach has inflicted huge harm on our economy, damaged our international standing and pushed up mortgage payments for households across the country. We know in particular that the Government’s failure to publish the OBR report showing the detail behind their approach has aggravated the spooking effect on markets. Through our new clause, we would require the Government to explain how they will maintain the funding equivalent to the levy, given their wider reckless decisions on borrowing and the economy.

New clause 1 refers to general taxation. As Members may recall, when they announced the health and social care levy last year, the former Prime Minister and Chancellor explained that, alongside the national insurance increase, the Government would also increase taxes on income from dividends at the same time. On 7 September last year, the previous Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), said:

“because we are also increasing dividends tax rates, we will be asking better-off business owners and investors to make a fair contribution too.”—[Official Report, 7 September 2021; Vol. 700, c. 154.]

The question arises of why the current Prime Minister and Chancellor have decided to cut this tax rate from April 2023. They do not need to scrap the dividends tax rise as part of the repeal of the Health and Social Care Levy Act—the dividend rate does not appear in that Act—but they have none the less committed to doing so. I would be grateful if the Minister could set out whether he agrees with the former Prime Minister’s argument that having a higher tax rate on dividends means asking better-off people to make a fair contribution. If so, can he confirm why the Government have decided that it is the right time to cut taxes for those who are better off, even if that means greater borrowing funded by all taxpayers?

As I have made clear throughout, we are glad that the Government are using the Bill to finally scrap this tax rise on working people, but it is clear that taxpayers will pay yet again to fix the mess the Tories have created, that Ministers are planning to again cut taxes for those they have described as the better-off and that this Government are desperate to avoid scrutiny of their plans. It is with that final point in mind that we ask Conservative Members who are uncomfortable with their Government’s approach to join us in supporting new clause 1.

Our new clause would simply require the Treasury to be transparent about how it will replace the money for health and social care that will no longer accrue from the health and social care levy, in the context of its wider approach to taxation, borrowing and the economy. As we have heard throughout the day in Parliament, there is widespread concern that the Government’s plans do not add up and that their lack of transparency is making matters worse. Our new clause makes clear to Ministers that this must change.

[Steve Brine]

I was not planning on speaking, but there are a couple of points that I would like to put on record, as a former Health Minister. I will not revisit the debate on the leadership campaign in the summer, or support new clause 1. I listened carefully to the hon. Member for Ealing North (James Murray) setting out his argument, and I have some sympathy with some of it, as he probably gathered from some of my interventions earlier.

I was happy to support the Second Reading of this repeal Bill—not that we had a Division on it. The Bill was well trailed throughout the ridiculously long leadership campaign in the summer; I do not think that that was the issue that spooked the markets at the time of the fiscal event a couple of weeks ago.

As my hon. Friend the Member for South Suffolk (James Cartlidge) said so eloquently on Second Reading, this is probably the most important debate that we could be having; I am miffed that the House of Commons is so quiet. It is about funding the British public’s No. 1 priority: the national health service. It was about that when we passed legislation on the levy, and it is about it now that we are repealing it. The issues have not gone away. I will listen carefully when the case for new clause 2 is outlined, but new clause 1 looks down the wrong end of the telescope. My hon. Friend cited the Office for Budget Responsibility’s projection that NHS funding will, in coming years, go from about 10.3% to 17.5% of GDP. Those are eye-watering figures. I have to say, as a former Minister for public health, primary care and prevention, that we cannot simply carry on that curve.

I want to put on record my points on three or four of the big challenges that the health service faces. If the Government let ideology get in the way of facing down those challenges, future generations—and Governments, whether Conservative or Labour—will pay the price. Take obesity. UK-wide, the NHS costs attributed to being overweight and obesity are projected to reach £9.7 billion by 2050. When I was in the Department of Health, we wrote the child obesity strategy. It is fair to say that the former Prime Minister, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), did not like a lot of it when he was running for the leadership of our party. In fact, I think he referred to the sugar tax as a sin tax, but—let the sinner repent—he came round to it. Now I hear rumours that it is for the bin.

I hear rumours that many other measures, including those around price promotion—"buy one, get one free”, as it is colloquially known—are also potentially for the bin, because we do not want to be seen as a nanny state. This from the state that recently passed a law making it illegal to leave the house without good reason. Sometimes, the state does things in the interests of the population that it serves, and there is no shame in that. If we do not tackle the obesity challenge, it will have not only a big financial impact on the NHS, which we are talking about how to fund, but a big social impact.

That takes me to my second point, which is on cancer. Around four in 10 cancers today are preventable. Smoking causes at least 15 different types of cancer. It is the biggest cause of cancer in the world today. Earlier, the hon. Member for Stockton North (Alex Cunningham) mentioned the smoking cessation plan, which I published when I was in office, and subsequently updated. We are still waiting for its revision. Press reports say that it is to be dropped as well. I gently suggest that that would be a massive own goal for our Government, and for the NHS, which we argue about how to fund.

Universal Credit and Working Tax Credit

James Murray Excerpts

Monday 18th January 2021 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op) [V]]

Our country went into 2021 with soaring covid infection rates, the highest excess death rate in Europe, and having had the worst recession of any major economy. Whatever happens with the vaccination programme, we face many more months of restrictions and the economic impacts will be felt for years to come. Yet the Chancellor and the Government cannot see how wrong it is to take away £20 a week from families who, having been hit by 10 years of cuts to social security and incomes, are now struggling with the extra costs of food and bills in the middle of the worst economic crisis in 300 years. It is a disgrace that today’s debate is even necessary.

This cut to universal credit will hit millions of the poorest families across the country. In my constituency in west London, 44% of children are living in poverty. The cut will hit thousands of families in Ealing North, where over 4,300 households with children received universal credit in August last year, up by more than 1,800 since the start of last year.

The mother of one of those families, Clare, wrote to me on Friday night about today’s debate. She kindly agreed that I could read out a few sentences from her email. She explained that

“the £20 weekly boost is such a lifeline for us, especially for my family. I am a single parent and have an autistic son who is extremely vulnerable.

I also have severe COPD and this extra amount has allowed us to buy some good reading books and nice food which we could not afford without the £20 boost.

My son needs constant care, and just for him to have the books to read gives me some free time to relax and have some time to catch up on chores, and also my sleep as my son only sleeps 4 hours max at night.

I have also been able to bake some nice meals that are nutritious where I could not afford most of the ingredients before the extra was put in place.”

Families such as Clare’s and others across the country need that extra help. The Government must cancel this cut, extend the uplift across legacy benefits and show that they understand the impact that their approach to social security has on people’s lives.

The outbreak has confirmed how inadequate our social security system has become and how challenging it is for so many people to get by from one week to the next. The fact that the Government felt they had to increase universal credit by £20 a week at the outset of the covid crisis shows how insufficient it already was. Beyond the outbreak, we are clear that the system should be replaced with one that offers a proper safety net and decent support for all. Cancelling the £20 cut to universal credit will not right all that is wrong, but it will be a lifeline for millions as we come through this crisis.

[Mr Deputy Speaker (Mr Nigel Evans)]

We will now go back to Sarah Dines; we have an audio link. Sarah, you have the full three minutes, so start right from the very beginning.