Autumn Statement Resolutions

John Redwood Excerpts

Monday 27th November 2023 Commons Chamber

[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register of Members’ Financial Interests. Noting the good words from the Chancellor in favour of self-employment, and noting the national insurance measures to help, are there things that the Department for Work and Pensions is doing, or can do, so that self-employment is an option for people who are currently without work but who may have a lot to offer?

[Mel Stride]

My right hon. Friend is right to draw attention to the self-employed and to the national insurance changes that my right hon. Friend the Chancellor announced in his autumn statement. Of course, my Department does a huge amount to support the self-employed. Many of our programmes are open to self-employed people to ensure that we are there to support them with the wages that they are able to bring home in self-employment, and we will continue to do exactly that.

A compassionate Government also need to be honest about the significant challenge that we face with the rising number of people leaving the labour market due to ill health or disability. Around 2.6 million people are currently off work with a long-term physical or, increasingly, mental health condition. Given the positive impact that work has, not just on finances but on health and wellbeing, there is a clear need to do more to help and encourage those people. In a tight labour market, with employers looking to fill nearly 1 million vacancies, there is also a wider economic imperative. Every time someone returns to work, they benefit and everyone benefits. It helps the economy to grow, debt to fall and inflation to decline still further.

Just as importantly, given the waste of human potential that inactivity often represents, there is a moral case to act. That is why, with the £2.5 billion-worth of investment over the next five years, our back to work plan will help thousands of disabled people and those with health conditions to stay in work, or if they fall out of it, to move quickly back with the right support. A key part of our approach is bringing together employment and health support, because we know that work and health go hand in hand.

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[John Redwood (Wokingham) (Con)]

I have my business interests declared in the Register of Members’ Financial Interests.

Underneath the exchanges of words, I welcome the outbreak of agreement, given that the Labour party now strongly supports the idea of helping more people into work. I suspect that the Opposition will not vote against the main items in the autumn statement because they understand that the Government have had success in keeping so many people in work and promoting employment over the years, despite some extremely difficult situations. They also understand that that is an important thing for a responsible Government to do, and not just to get the benefit bill down. As Labour has eloquently said, life can be so much more worth while when people have suitable work, suitably supported, that gives them a sense of purpose and of contributing to their communities.

I wish to draw brief attention to the issue of getting inflation under control and the inadequacy of forecasts by the Office for Budget Responsibility and the Bank of England. It is extremely difficult for Ministers to conduct consistent policy when the forecasts are zinging around so much and giving different and often misleading ideas of what is feasible and what is not. I welcome the other place’s most recent report on the Bank of England, which highlights how the Bank has been unable to come up with realistic inflation reports over the last three years and has therefore taken inappropriate action. First, it loosened monetary policy in the covid recovery phase, and now its monetary policy is too tight as it seeks to adjust its past mistakes. I hope that the Bernanke review will get on with the important task of adjusting the Bank’s models and coming up with a better answer to help guide our counsels, and particularly those of our Ministers.

I find it odd that we have a Monetary Policy Committee that is not interested in money and credit. As the other place’s report suggests, perhaps it should look at putting money and credit into its thinking—more diversity of thought is recommended—and into the models to try to get them to work. What is the point of the committee sitting around trying to make decisions if the main data it is using—namely, what it thinks the inflation rate will be—can be massively out? It thought that the inflation rate would stay at a pretty consistent 2%, when it was en route to 11%. That was why, for many months, the Monetary Policy Committee did not take appropriate action to rein in potential inflation. Now it is pretty sure that inflation will come under control, but it still has had difficulties and is constantly having to change its inflation forecasts in the meantime, as has the OBR.

The review rightly points out that when looking at money and credit in the economy, we need to look at the experience elsewhere in the world. Of the five most important central banks of the world, including the Bank of England, those in Asia have lived through exactly the same big escalation in food and energy prices as a result of the dreadful war in Ukraine. The two major central bank economies in Asia are very vulnerable, because they import a lot of food and energy, but their inflation stayed around 2%, whereas the three western central banks, including the Bank of England, took much more aggressive monetary action, printing a lot of money and buying an awful lot of bonds, and experienced the inflation rate going up to around 10%. They should pause and ask why.

The review also rightly says that the Bank of England should be more accountable to Parliament—not to the Government, in any way to prejudice its independence—because it is in the process of losing us the most colossal sums of money. Successive Chancellors have guaranteed the Bank of England against all losses from their bond buying programmes, which started under Labour at the end of the first decade of the century and were escalated by the current Government in response to covid. We are now looking at a possible loss of £170 billion, based on the latest figures that it has revealed. Every penny of that has to be paid by the Treasury on behalf of taxpayers as and when it is incurred.

There is absolutely no need for the Bank of England to make those losses bigger and more immediate by wading into the markets at the moment and selling those bonds in a hurry, at very depressed prices—prices that the Bank has deliberately depressed in order to get interest rates higher. It could follow the European Central Bank, which wisely is not selling its bonds at a loss in the market but is awaiting their retirement when they fall due for repayment, when the losses will be less but it can still shrink the balance sheet, which is the main thing it wishes to do.

I hope the Government will look at that, because it has always been a dual-controlled policy: the bond buying required the signatures of successive Chancellors of the Exchequer. It is a matter of legitimate concern for this House when the losses are so colossal, and there is a direct impact on all public expenditure figures, public borrowing and so forth, excluding the Bank of England. As many in the debate will know, we look at the figures both cum the Bank the England and ex the Bank of England. The ex the Bank of England figures look very poor indeed.

I welcome measures in the autumn statement to promote more growth, which is crucial. The way to get inflation down faster is to promote more capacity, so any measure that gets us more capacity is welcome. That is why I am particularly keen that we be much kinder to the self-employed and small businesses. They can do more work immediately, but some of the tax penalties still weigh on them, preventing them from getting self-employed status or winning contracts, or preventing small businesses from growing quickly enough. I repeat my urging for Ministers to look at that: more capacity would be the best way to get inflation down.

I will put in one final plea to Ministers to find some money to cut the taxes on energy. They are making us extremely uncompetitive and are keeping inflation higher for longer. It would be a win-win to get some of the taxes on energy down.

[Mr Speaker]

We now come to the SNP spokesperson.

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[Mr Tobias Ellwood (Bournemouth East) (Con)]

Let me welcome you back from your important visit, Mr Speaker, and begin by welcoming the maiden speech from the hon. Member for Tamworth (Sarah Edwards). She will find this to be quite a robust, feisty place, where perhaps courtesy is not what it should be, but we should commend an exemplary maiden speech and wish her all the best in her parliamentary career.

I am grateful to catch your eye, Mr Speaker, for this important opportunity to comment on the Chancellor’s autumn statement, the Government’s update on the health of the nation’s finances. Members in all parts of the House have recognised that the backdrop to any discussion about our economy would not be complete without recognising the unprecedented, seismic events that have impacted the nation’s finances over the past few years: covid and the Ukraine conflict. Those once-in-a-generation events would have tested any Government, whoever was in power, as indeed they have tested Governments across Europe and beyond. Looking at how we compare with other nations puts the challenges we have experienced in perspective. In 2022, all but one of the G7 nations experienced higher debt-to-GDP ratios than the UK, so we have stabilised the nation’s finances.

It is time to move forward and grow our economy. It is time to take advantage of the welcome fiscal headroom to increase UK productivity; to continue to tackle the cost of living crisis by helping more people back into work; and to map out a clear economic vision for the future. I am sure that reducing national insurance, increasing benefit payments, along with the national minimum wage, and advancing the state pension are changes that will be welcomed, not just by the public but by Labour.

I say to the Minister that I was hoping for more support for the tourism and hospitality industry. The value of tourism to Britain is too often overlooked. It is worth £140 billion to our economy, it accounts for 6% of our GDP and 11% of our workforce are employed in this important sector. I welcome the continued extension of the 75% rate relief for hospitality, but I would like us to go further, with a permanent reduction in VAT for tourism. We saw that briefly during the covid crisis. I know that the discussion is taking place and perhaps—please—we will see that measure come out of the hat in next year’s spring statement. Tourism is vital to our economy and to Bournemouth, so reducing VAT in the tourism and hospitality sector is something I hope Ministers will consider.

[John Redwood]

Does my right hon. Friend agree that the problem is that the OBR’s forecasting never gives any credit for cutting a tax rate in order to get more revenue? This could be a good example of where that would work.

[Mr Ellwood]

My right hon. Friend is absolutely right. The Centre for Economics and Business Research suggests that there is £10 billion to be made in lost GDP at the moment, as we are not attracting overseas visitors because our taxes are higher than those of our continental counterparts.

Looking at the bigger picture, finances certainly remain tight. The national debt, although falling as a percentage of GDP, as I said, remains too high. Our growth, although larger than Germany’s, is not where it should be. Given that we are the sixth largest economy in the world, we need to look at improving productivity, which remains sluggish, as it has been since 2008. A lot of these economic debates focus, understandably, on the micro level—the line-by-line budget allocations to Whitehall Departments, and the changes to general taxation, benefits and pensions—but how all those fiscal jigsaw pieces fit together is often overlooked. Our world is changing fast. Not only is it becoming more internationally competitive, but there is a question mark as to what our role actually is. I am reminded of what John Foster Dulles, the former US Secretary of State, said:

“Britain has lost an empire and not yet found a role.”

What we saw in the autumn statement was interesting indeed. The world is going digital, as IT changes every aspect of our lives: how we communicate, travel, do business and even strengthen our own security. That is all good news for the UK, as we have the third largest tech sector in the world, after the US and China. We are world leaders in pharmaceuticals, life sciences, creative industries, aerospace, fintech and artificial intelligence. With some of the best universities in the world, along with our globally recognised finance sector, we are well placed to become a high-tech superpower—another silicon valley. That is also good news for Bournemouth, because that is exactly where our area focuses; we are focused not just on tourism and financial services, but on the creative industries.

Work Capability Assessment Consultation

John Redwood Excerpts

Tuesday 5th September 2023 Commons Chamber

[Mel Stride]

I thank the hon. Lady for her remarks. It is gratifying that she agrees with much of the premise I set out. She recognises the importance of work and that 2.5 million people, or thereabouts, are on long-term sick and disability benefits—we are all equally concerned that the number is growing. She also argues that the work capability assessment, in its current form, is not fit for its required purpose, which is exactly why we are coming forward with these reforms. She refers to the PIP assessment requirements, which are not relevant to the work capability assessments that we are discussing and that are subject to the current consultation.

We clearly have a plan. The hon. Lady has been in her position for a very short period, and I respect and understand that. I invite her to look closely at the announcements that were made—the £2 billion-worth of support at the last fiscal statement, including our White Paper reforms in exactly the area where she is seeking progress; the universal support; and the WorkWell programme. She mentioned working with local providers, and there is a huge drive on that. As for mental health, we are consulting on occupational health across businesses to make sure that we get in right at the start where people may otherwise end up on a long-term health journey. We are also working closely with the NHS on getting employment advisers involved, for example, in talking therapies, which we know are so effective in addressing mental health concerns.

[John Redwood (Wokingham) (Con)]

I strongly support the initiative to help more people who are long-term sick and disabled into work where they wish to do that. My query is: why on earth is it going to take so long? We need to be doing this now, to ease our workplace shortages and to give those people earlier support and hope. Will my right hon. Friend please work with his officials to speed it all up?

State Pension Age: Review

John Redwood Excerpts

Thursday 30th March 2023 Commons Chamber

[Mel Stride]

The hon. Gentleman raises several points. First, on the publication of Baroness Neville-Rolfe’s report, I have always been clear that we would publish that at or around the time that my report of the review was released, and that is precisely what we have done, including by giving advance sight of my report and her report to the Opposition.

I believe that the hon. Gentleman’s remarks about pensioner poverty are misplaced. Pensioner poverty has fallen since 2009-10, as has poverty across other cohorts of the economy. He will, of course, be aware of the huge amount that this Government have been doing by way of intervention to ensure that we support low-income households, and pensioners up and down this country—many millions of them—with billions of pounds of targeted transfer payments, which will be going out over the coming months.

Finally, the hon. Gentleman mentioned the WASPI women. He will know that I am not able to comment on that matter as it is subject to a current inquiry by the parliamentary ombudsman.

[John Redwood (Wokingham) (Con)]

What would be the saving were the Government to raise the age by one year to 68?

[Mel Stride]

That is a beautiful question because it is precise; it requires an answer that one cannot duck. I will write to my right hon. Friend with that information.

Labour Market Activity

John Redwood Excerpts

Tuesday 28th February 2023 Commons Chamber

[Jonathan Ashworth]

My hon. Friend hits the nail on the head. It is not just that lots of people are not aware of the Access to Work scheme, but some people who apply for Access to Work are then faced with the most ridiculous waiting lists. A constituent of mine accepted a job and was told that there was a 26-week waiting list for an assessment. I raised that case with the Department in my capacity as a local constituency MP and I am pleased that the Department has looked at it again, but lots of people will not go to their local MP asking them to intervene, and we want to get people into work. It is no wonder that the disability employment gap is widening.

As a country, we should be aiming for the highest level of employment in the G7. That would mean living standards raised for every household. The reason we want to extend the opportunity of decent work to all is even more fundamental: when one in five people who have left the labour market in the past two years say that they would like to work, we have a responsibility to help them. Behind every statistic is a story of opportunities missed, talents wasted and extraordinary potential left untapped, none more so than for the now 1 million young people not in education or employment. Increasing numbers of young people are out of work for reasons of mental health. We know the long-term scarring effects of worklessness at a young age; it risks a life on the margins. To do nothing for this group of young people, as is, in effect, the case now, means writing them off. Its means tolerating a situation where only about 4% of people in the employment and support allowance support group return to work each year—to me, that is fundamentally unacceptable. It is a massive social cost and it has a massive economic cost as well, as we will see, because the Office for Budget Responsibility is predicting that the health-related benefit bill will increase, costing us £8 billion extra.

[John Redwood (Wokingham) (Con)]

Most Conservative Members would agree with much of what the right hon. Gentleman has said, so will he offer a bit of guidance as to how the Government should go about contacting people in these positions who might want to get into work? What kind of offer does he think would be best to make so that we can engage with them?

[Jonathan Ashworth]

I am grateful to the right hon. Gentleman for that. I will outline a very detailed plan in my remarks. I hope it finds favour with him, because we want to grow our economy, as he does, and getting people back to work is good for them as individuals, it will make our economy more productive, it will sustainably raise living standards—not by going for growth through inflation—and getting people back to work is surely a good thing. I hope he stays in the Chamber, as I am sure he will, to listen to my speech.

The Government say that they gave us kickstart, but it failed to deliver the 250,000 jobs for young people promised. They say that they gave us restart, but it is expected to help less than half the number of people that Ministers said it would, and it is underspent by around £900 million. However, my argument is not simply that the Minister is doing nothing. It is also that what the Government do do, they do not do very well.

The Local Government Association estimated that the Government—I think that this is last year’s figure—spent £20 billion to deliver 49 different employment and skills-related schemes administered by nine different Government Departments and agencies and, yet, despite all that money, these organisational geniuses have still given us a situation where we have 1 million vacancies, 3 million workless, and the worst employment recovery in the G7. That is surely not good enough for £20 billion-worth of expenditure.

What has been the Government’s answer? It is more of the same. They brief newspapers there will be more daily interviews for the three-month unemployed in the intensive work search group, even though the failure-to-attend rate for weekly appointments is already high. It will no doubt mean more CV writing classes, more applying for jobs online that turn out to be duplications and, of course, more sanctions. Of course there should be conditions applied to unemployment—[Interruption.] We have always been in favour of conditions for unemployment benefit—as many of these hon. Members will find out when they go to the jobcentre after the next general election—but what we need for this country is a plan that widens access to employment support for all who want to work, that brings together health and employment support, that addresses the cost and disincentives of moving into work for parents with childcare needs, for example, and that takes account of the different economic needs of the country.

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[Mel Stride]

I give way to my right hon. Friend the Member for Wokingham (John Redwood).

[John Redwood]

I am very grateful to the Secretary of State, who is right to point out the excellent record on employment, which is a great strength of our economy. Is he, like me, a bit worried about the fall in self-employment more recently, and will he have a word with the Chancellor? I think some of that is to do with changes in tax rules that now impede the self-employed in getting contracts from companies.

[Mel Stride]

My right hon. Friend makes a really important point, and this Government are absolutely committed to encouraging self-employment. I think it is fair to point out that in the past some apparent growth in self-employment has been due to individuals incorporating themselves for tax purposes, and it may be that more recently some of that effect has started to unwind. However, I totally agree with my right hon. Friend, and I am sure the Chancellor has heard his words, because he has made the point many times before that it is really important that we support the self-employed.

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[Mel Stride]

I think it is the hon. Gentleman who has misunderstood what has been said here. There is a distinction between payroll employment, which is clearly those who are on PAYE employed by an employer, and somebody who is self-employed, which is a totally different matter. The statistic, or the fact that I presented, was simply that the level of payroll employment is currently at a record high in this country.

[John Redwood]

I want to clarify that I think there is an issue with capacity in things such as plumbing, jobbing building and that kind of thing. We are short of capacity there, and we need to look at why those trades have been afflicted by some of this decline.

[Mel Stride]

My right hon. Friend is absolutely right, and that is why we have stood up important programmes, such as sector-based work programmes, and it is why skills and apprenticeships are so important—[Interruption] —as are skills bootcamps, as an hon. Friend reminds me.

This motion is wrong on unemployment and employment, but it is also wrong on economic inactivity, because while it is true that economic inactivity rose during the pandemic, it is also true that, with the notable exception of the United States, in most countries it has gone back down to broadly where it was before the pandemic. That has not happened in the UK. It is not true to say that working-age inactivity rates have not been on a long-term decline. They have in this country, and the trajectory has been downwards. The level of economic inactivity in the UK is lower than in the United States, France and Italy. It is below the EU average, and it is below the average of OECD countries.

While there has been some softening in recent months on the level of economic inactivity in the United Kingdom, I accept that there is a lot more work to be done, which is why the Prime Minister has asked me to work across Government to review how we approach these issues, particularly in respect of disability, the long-term sick and those who are over 50 and have retired early.

Before I come to those cohorts, let me state clearly what lies at the heart of this Government’s success on unemployment and employment: the key Conservative belief that we should make work pay. The universal credit roll-out has been a huge success, despite the fact that the Leader of the Opposition suggested as recently as 2021 that it should be scrapped. We have enhanced universal credit by improving the taper, dropping it from 63% to 55%. We have increased the work allowance by £500. In terms of making work pay, for the very lowest paid we will be increasing the national living wage by 9.7% this April. We have stood up a number of important programmes that have helped to encourage people into work, among them Restart and our youth offer.

Health and Social Care Levy (Repeal) Bill

John Redwood Excerpts

Committee stage
Tuesday 11th October 2022 Commons Chamber

[Richard Burgon (Leeds East) (Lab)]

I want to focus my remarks on my new clause 2. I thank the 25 right hon. and hon. Members who added their signature to mine on the amendment paper, and I am pleased that it has support from Plaid Cymru, Alba, Labour, Green, and Social Democratic and Labour party MPs.

The Conservative party was wrong to introduce the health and social care levy, so it is right that it is being scrapped, but it is wrong that the Government are imposing a package of unfunded tax cuts, which have created financial panic and led to interest rates shooting up and millions of people fearing how they will keep their home. The package has created a Tory crisis made in Downing Street, but being paid for by working people.

As I say, I welcome the scrapping of the levy, but of course health and social care still need the extra funding that it would have raised. We only have to look at today’s news about how the number of social care workers has fallen for the first time in a decade to see just how broken our care system is, and rising waiting lists and soaring ambulance waiting times show that the NHS is in dire need of a funding boost. So my new clause 2 would require the Chancellor, in addition to scrapping the levy, to look at different taxes to raise the income that would have been raised by the levy. Specifically, it calls on the Chancellor to look into the iniquity of tax rates on wealth being lower than the taxes paid on income from work.

We are, I am afraid, one of the most unequal countries in Europe when it comes to income distribution, but it is even worse when we look at wealth. The richest 1% hold almost a quarter of UK wealth, so we need a full and wide debate in our country about wealth taxes. I have been calling for a wealth tax—for example, a one-off wealth tax of 10% on wealth over £5 million, which could raise £100 billion and provide an emergency wealth fund to help get us through this crisis—but today, with new clause 2, I want to concentrate not on the taxing of wealth itself, but on taxes on income deriving from wealth.

We have a scandalous situation in our society in which income derived from wealth is taxed below income derived from work. If someone is lucky enough to be able to live off share dividend payouts, they will pay less in tax than someone who earns exactly the same amount by getting up each and every day and going out to work. Likewise, capital gains tax, which is paid on profits when selling assets such as a second home, is paid at rates below income tax rates. How on earth can that ever be justified, and how can it be justified when the Government are plotting—without any democratic mandate, I would add—to cut benefits and public services across society?

In fact, there is huge potential for increasing tax revenues by simply ending the significant tax discounts that go to income from wealth over income from work. How much would be raised by doing this? Ending the lower rates paid on capital gains and share dividends, and removing the related exemptions on those taxes, would raise around £24 billion per year. That is a lot more—nearly double—than the amount from the national insurance tax hike on working people, which would have raised around £12 billion to £13 billion. The funds that my proposal would raise could be a big down payment on the investment that we need to ensure our social care system delivers for everyone, and it could make a big difference in addressing the crisis in our health service.

For those on the Conservative Benches who may be appalled by this idea or this moderate proposal, I want to point out that the former Chancellor—not the last one, but the one before, the right hon. Member for Richmond (Yorks) (Rishi Sunak)—commissioned a review of capital gains tax, and that review recommended slashing the annual allowance and aligning capital gains tax rates more closely with income tax, in a move that could raise billions of pounds for the Exchequer. On this, Margaret Thatcher, even, had an interesting view. Under Thatcher’s premiership, the same basic unfairness of lower taxes on capital gains was ended. It was back in 1988 that the then Chancellor, Nigel Lawson, said that

“there is little…difference between income and capital gains, and many people effectively have the option of choosing…which to receive. And…it is by no means clear why one should be taxed more heavily than the other.”—[Official Report, 15 March 1988; Vol. 129, c. 1005.]

Since then, wealthy people living a low-tax lifestyle have been benefiting from even lower capital gains rates than over 30 years ago, so something has gone wrong and it is now time to put that right. We need solutions to deal with this economic crisis in a socially just way, not through austerity, not through benefits cuts and not through public service cuts. Social justice means putting tax justice at the heart of our economy. We should start by ensuring that those who live off their wealth pay at least the same level of tax as those who live off their own work.

[John Redwood (Wokingham) (Con)]

I disagree with new clause 2 and new clause 1. I welcome very much the legislation. One of the objectionable features of the original proposal was hypothecation, because I do not think it is possible to identify a single tax that just happens to meet the costs of a particular service, let alone a tax that would then have revenue growth at the right pace to take care of the needs of that service. This one was particularly misleading. There was no way that the amount of tax to be levied got anywhere near paying the full costs of social care. It was misleading to make people feel that social care might be as cheap as this particular tax, although the tax itself was burdensome on all those who go to work.

There are still strong elements of hypothecation in new clause 2, which I would equally object to. Again, we should not mislead people into believing there is a simple, relatively low tax that takes care of a huge problem—social care. Indeed, when the Government compounded the difficulty by saying that in the first instance the tax would be mainly used for the health service, and by some magic that would drop away and it would go to social care, it all became incredible to me. That is why I did not like the idea in the first place. It is very good news that we are sorting it out.

The challenge of new clauses 1 and 2 is a perfectly fair one, and I think the answer is straightforward. Social care does need more money to go into it, and it will need progressively more. If we fund our social care better and expand it, it will release some of the pressures on the NHS. There are some people who could vacate a bed quite safely and get better social care if that were available, so this is worthwhile expenditure from that point of view as well. Above all, it is worthwhile expenditure because people deserve better care and better treatment and that should be funded out of general taxation.

The Government are right now to abolish the hypothecated specialist tax, to give up the idea that there is a single, relatively low tax that solves all the problems, and to accept that social care and NHS provision together is a major claim on the general taxation of the country. If the general taxation of the country does not reach total spending—it does not seem to at the moment—it is also a claim on borrowing.

On that last point, we should remember that for the previous two years the Office for Budget Responsibility grossly underestimated the revenues that came into our economy, and we borrowed considerably less than it was forecasting. It may not be so wildly wrong this year, when it looks perhaps as if its borrowing forecast is a bit on the low side, but we must remember that the way to pay for these services is to grow the revenue. That was what we were doing last year and the year before, and that is what we must do next year, to take care of the need to spend more on the NHS and social care.

Pensions Update

John Redwood Excerpts

Tuesday 7th September 2021 Commons Chamber

[Dr Coffey]

In response to the first part of the right hon. Gentleman’s question, the legislation is there regarding the earnings link and we are maintaining that. We will be doing further analysis to understand what proportion of median earnings the pension will be, but I have no plans to change aspects of it. We think it is a sensible approach that we have taken to redress the balance, which had moved away.

Forgive me, but I have forgotten the second part of the right hon. Gentleman’s question. [Hon. Members: “Pension credit.”] Okay. The thing about pension credit is that it is split in two: the income guarantee and the savings credit. As I said to the House, our estimate is that 75% of people we think could be eligible take up the income side of pension credit, but the savings side has a much lower take-up. That is because sometimes when people do the calculation, it may be just 1p or 2p a week and they may not think it worth while to do the whole application. However, even with the savings credit side of pension credit come things like the free TV licence and access to other benefits, so we encourage people to take it up. With the income side, we estimate that three in four eligible pensioners are taking it up.

[John Redwood (Wokingham) (Con)]

Will the Secretary of State promise to publish, at the point when she makes her final determination of the proposed increase, a three-year smoothed average or some other suitable computation so that we can see that the spirit of the promise has been kept, even if the letter could not be because of the strange gyrations of the earnings figure? I think that people would be reassured if they felt that over the longer period we had met that requirement.

[Dr Coffey]

I cannot give that commitment to my right hon. Friend today, because I do not know exactly what it involves, so I will take his request away and consider it. I want to emphasise that overall we have seen a variety of increases over the past decade owing to the triple lock policy. I am confident, as I have flagged already, that we have seen a substantial increase in pensioner income as a result of that policy thus far.

Income Tax (Charge)

John Redwood Excerpts

Thursday 4th March 2021 Commons Chamber

[John Redwood (Wokingham) (Con) [V]]

I have declared my interests in the Register of Members’ Financial Interests.

I welcome the extension of help to individuals and companies. All the time people cannot go to work or businesses cannot trade and all the time that there are pandemic regulations and social distancing that impede people going about their normal business, it is vital that the Government offer alternative income and support. I am pleased that the Government came up with a big response originally, and it is necessary to carry it on for as long as these restrictive measures remain in place.

I also welcome the fact that the OBR has decided that we will be borrowing £39 billion less in the current year than in its recent November forecast. I think that serves as a reminder or a warning to all those trying to debate the economy based on a set of figures; these are very uncertain times. It is difficult for the official forecasters to come up with accurate figures, and we should be especially suspicious of ideas based on what the deficit might be in a couple of years’ time. This deficit will fall very rapidly. Assuming the great success of the vaccines continues, and assuming that we can relax and get people back to normal work and normal business within a few weeks or months, we will then see the deficit come down because so much of the deficit has been caused by the special pandemic measures.

The figures confirm that around £250 billion of extra spending in 2020-21 was the direct result of the special pandemic measures, and that there will be another large figure in the first part of 2021-22. We want to see the end of all those special expenditures—because people have better-paid jobs to go back to, businesses are trading successfully, and there is turnover and profit coming back to our small and large businesses—and so much of that expenditure was a poor substitute for being able to do the thing itself. There was of course some loss of tax revenue, and again, we would expect to see tax revenue rise quite rapidly as soon as people can trade properly again, as soon as there are more transactions in the economy, and as soon as we are making more goods and providing more services to each other, as I am sure we will.

So the Chancellor is right to say that the crucial step to getting the economy back to health, the deficit down and the numbers back into shape is to promote a recovery. He is right to want more investment in our economy. The public sector numbers show public sector investment going up, and it is very important that good projects are chosen that will have a good payback. It is very important, too, that the tax incentives are correctly honed so that we get the boost in private sector investment that we want.

The Chancellor is also right not to rush out any new fiscal rules. We will need a new set of rules in due course, however, and they must be geared to a faster growth policy and a policy about levelling up and investing in great projects around the United Kingdom. That must be linked to sensible discipline on public finances and, above all, to keeping the good control of inflation that we have had for a number of years now. It is reassuring that the OBR and the Bank of England are very confident that inflation will remain low, which gives us a bit more flexibility, but we need to watch that inflation situation.

I note that the OBR thinks the balance of payments is going to be weak for two or three years, and that provides an opportunity. In the post-Brexit world there are huge opportunities that we can exploit more easily in import substitution. Why do we not, for example, with our great green policies, plant many more trees and make sure there is much more sustainable husbandry of trees so that we replace many of the timber imports? And while we are about it, can we replace the pelleted timber coming in to produce power at Drax with home-produced sustainable timber?

We should also put in sufficient electricity capacity, because if we want an electrical revolution we will need a lot more capacity, and while we are doing that we should get rid of the imported electricity through the interconnector, which we rely on more and more for no particular reason. We used to be able to have all our own power provided in the UK with a decent margin and I suggest we return to that.

We can do a lot more on food and fish, too. I urge the relevant Ministers and Departments to promote food and fish, and also to make sure that the grant schemes and regulations that are now under our control are used to increase our capacity so that we start to substitute many of the items that are coming in.

A recovery needs more orders and more investment in capacity; it requires excitement over new products and services and the restoration of old products and services. That must be the single thing that most motivates all the relevant Ministries and Government policy, because the only way to get this very big deficit down is to have more revenue and less expenditure, and the only legitimate expenditure to cut is all the spending we have been doing as a poor substitute for a decent economy with well-paid jobs and successful businesses.

So I say, let’s go for growth; let’s do everything we can to promote more things being made and grown and sold within the United Kingdom. There are huge opportunities, and that will be good economics.

Department for Work and Pensions

John Redwood Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Will Quince]

My hon. Friend has made a very good point. We know that about 20% of people seek help when claiming universal credit. That is why we introduced the Help to Claim service, working with Citizens Advice and Citizens Advice Scotland. However, I am acutely aware that a number of vulnerable groups in my portfolio—care leavers, prison leavers, survivors of domestic abuse, and those who are homeless or sleeping rough—need extra support, and the Secretary of State and I are carefully considering a number of further options ahead of potential spending review bids.

[John Redwood (Wokingham) (Con)]

Will the Minister also confirm that it is now always worthwhile to go to work and that people are better off in work, contrary to what we have just heard?

[Will Quince]

My right hon. Friend is right. By removing the cliff edges, universal credit ensures that work always pays. That was not the case under the previous legacy system.

DWP Ministers always listen and act on feedback. That is why we recently announced that we will end three-year sanctions, initiate programmes to investigate how we can help those in work to progress, work with the Social Metrics Commission on a measurement of poverty, and no longer regularly review those on PIP who have reached state pension age. In addition, I continue to work closely with charities, stakeholders and Members on both sides of the House, using real-life experiences to shape improvements in the Department’s work.

We have worked with the real experts, the stakeholders, including Refuge and Women’s Aid, which have backed training for our work coaches to help victims of domestic abuse so they can better identify, refer and support those in need.

Inequality and Social Mobility

John Redwood Excerpts

Wednesday 12th June 2019 Commons Chamber

[Margaret Greenwood]

The hon. Lady is absolutely right; she raises a shocking example and highlights the importance of this issue. We know that 4.1 million children growing up in poverty is leading to such disadvantage and we have talked about the mental ill health and the effects on children’s educational attainment.

[John Redwood (Wokingham) (Con)]

Will the hon. Lady give way?

[Margaret Greenwood]

I will not give way any further, because a lot of people have put in to speak.

Even graduates who have been on free school meals earn 11% less than their peers five years after graduating. The Joseph Rowntree Foundation reported that 1.5 million people were living in destitution in 2017, including—shockingly —365,000 children.

The last Labour Government understood the importance of tackling child poverty and set statutory targets for reducing it based on household income, with a co-ordinated strategy across government that took 1.1 million children out of poverty. Despite that, the Government abolished those targets and only continued to publish figures for poverty at all after pressure from Labour and voluntary organisations. Will the Secretary of State assure us that the Government will wake up to the crisis in child poverty rather than wasting time by coming up with alternative criteria and trying to dispute the figures, as they have done so far?

We know from the Trussell Trust that Government policy has played a key role in the sharp rise in food bank use. In 2018-19, it distributed around 1.6 million emergency food parcels, of which nearly 600,000 went to children. Low incomes, delays in benefit payments and changes to benefits were the key reasons that people turned to the trust for help. It has made the link clear between universal credit and increased food bank use and it is campaigning, alongside other voluntary organisations such as Citizens Advice, for Government action to end the five-week wait for an initial universal credit payment. It is absolutely right to do so.

[John Redwood]

rose—

[Margaret Greenwood]

As I explained, I am short of time so, unfortunately, I am not going to give way.

Leaving people to wait for over a month without any income at all, when many may not have any savings, is simply callous, so will the Government end the five-week wait? The Joseph Rowntree Foundation has identified cuts to social security, low pay and high housing costs as key reasons for rises in poverty since 2011. It has said that the benefits freeze, which affects 14 million people on low incomes, is the single biggest driver of rising poverty levels. By the time the freeze is due to end in April next year, the JRF estimates that it will have increased the number of people in poverty by 400,000, but of course, the cuts to social security did not begin or end with the benefits freeze alone. By 2020-21, the Government will be spending £36 billion less each year on working-age social security than they did in 2010.

--- Later in debate ---

[John Redwood]

Will the Secretary of State confirm that there was a very sharp fall in real incomes at the end of Labour’s period in office, and the good news is that we are now above that old level and rising? Rising real incomes is the way to get people out of poverty.

[Amber Rudd]

My right hon. Friend is absolutely right. It is now over a year that monthly increases in wages have exceeded inflation. That is the best way to get people out of poverty.

Universal Credit

John Redwood Excerpts

Monday 14th January 2019 Commons Chamber

[Alok Sharma]

I am grateful to the hon. Lady for welcoming the changes that have been announced. She has referred to the Secretary of State. As the hon. Lady will know, the statement about the changes was made in my name, and the regulations were laid in my name. It is therefore entirely appropriate that I should come here and, quite rightly, answer questions asked by colleagues.

The hon. Lady talked about the non-consensual conception clause. Of course I agree with her that women who find themselves in such utterly awful circumstances must be given the help that they need, and that that must be done in the most compassionate way possible. We have discussed the point before, and she knows that it is purely a question of whether the circumstances that are described are consistent with those of someone who has met the criteria for the exception. The individuals who are dealing with this are third-party professionals who already have experience of supporting vulnerable women.

As I have said, we will consider Friday’s court judgment and respond to it.

[John Redwood (Wokingham) (Con)]

I welcome the emphasis on helping people into work, and the idea that the implementation of the policy should be compassionate. With that in mind, may I ask whether there will be changes in the timing of benefit so that those who are most in need of it receive it earlier, and whether there will be a review of the housing element, which has sometimes caused trouble as well?

[Alok Sharma]

My right hon. Friend is, of course, right: throughout this process, we must provide support for the vulnerable in particular. As he will know, once universal credit is fully rolled out, there will be over £2 billion more in the welfare system than there is under the current legacy benefits. One of the changes made in the Budget was the uplifting of work allowances, which will help young parents and also the disabled.