Low Pay Commission Recommendations
Laura Trott Excerpts(5 months, 2 weeks ago)
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The Chief Secretary to the Treasury (Laura Trott)
Today I can inform the House that the Government will accept all of the independent Low Pay Commission’s recommendations for the new national living wage and national minimum wage rates, which will come into force in April 2024.
In April the Government published their remit to the Low Pay Commission for 2023, asking them to make recommendations for the national living wage in line with the Government’s ambitious target and manifesto commitment to reach two-thirds of median earnings by 2024 and the age threshold lowered to 21 years, provided that economic conditions allow.
The Low Pay Commission has recommended that:
The national living wage should increase by 9.8%, from £10.42 to £11.44 an hour, with the age threshold lowered from 23 to 21 years old;
The rate for 18 to 20-year-olds should increase by 14.8%, from £7.49 to £8.60 an hour; and
The rate for 16 to 17-year-olds and the apprentice rate should both increase by 21.2%, from £5.28 to £6.40 an hour.
The Low Pay Commission has also recommended that the accommodation offset increases from the current rate of £9.10 to £9.99 from 1 April 2024.
By accepting the Low Pay Commission’s recommendations, the Government will meet their target, ending low hourly pay for eligible workers.
The new national living wage rate of £11.44 will be a record increase and represents an increase of over £1,800 to the annual earnings of a full-time worker on the national living wage. The increases to both national living wage and national minimum wage rates are expected to benefit nearly three million workers.
These increases are due to come into effect from 1 April 2024, subject to parliamentary approval. The Government intend to lay implementing regulations before Parliament in due course.
[HCWS59]
Oral Answers to Questions
Laura Trott Excerpts(5 months, 3 weeks ago)
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Richard Foord (Tiverton and Honiton) (LD)
The Chief Secretary to the Treasury (Laura Trott)
As a result of the Government’s triple lock, the basic state pension is now more than 50% higher in cash terms than it was in 2011. The Secretary of State for Work and Pensions is undertaking his review at the moment, and I cannot pre-empt that.
Richard Foord
Now that Lord Cameron has returned to the Cabinet, it is probably a good time for us to remember that the pensions triple lock was a Liberal Democrat initiative. The 2010 Liberal Democrat manifesto said:
“We will uprate the state pension annually by whichever is the higher of growth in earnings, growth in prices or 2.5 per cent.”
Given that the triple lock has now been operational for more than a decade, will the Chancellor and his team commit to putting the triple lock in the next manifesto?
Laura Trott
Nice try. The triple lock was a Conservative invention, delivered by the Conservatives, and it is something to which we remain committed.
Mr Ranil Jayawardena (North East Hampshire) (Con)
I welcome my hon. Friend to her new role. Given that it is right that we look after our pensioners and ensure that people are well looked after in later life, it is important that we have the right tax base to fund our pensions. Will she meet me to consider ways in which we can make our taxation system more family friendly, to encourage more people to have more children and to ensure that we can pay for our pensions in the years ahead?
Laura Trott
My right hon. Friend is a brilliant advocate on these issues, and of course I would be delighted to meet him.
Alison Thewliss (Glasgow Central) (SNP)
Wendy Chamberlain (North East Fife) (LD)
The Chief Secretary to the Treasury (Laura Trott)
The Government are committed to supporting households with the cost of living, delivering over £94 billion of support, including uprating benefits by 10.1% this year. As I have said, the Secretary of State for Work and Pensions is undertaking his review, and I cannot pre-empt that.
Wendy Chamberlain
Figures from the Trussell Trust show that food bank usage is at its highest ever level, and over the summer months a record 41,878 parcels of food were provided to 21,000 children in Scotland alone. Meanwhile, child poverty costs the Government £39 billion per year in poor health and educational outcomes. In order to tackle child poverty properly, will the Government commit to keeping benefits in line with inflation and lifting the two-child cap?
Laura Trott
We understand that things are really tough at the moment, which is why we have put in place £900 of cost of living support this year, but we also all need to work on bearing down on inflation. We are seeing it start to come down, but we know it is still too high, and we hope we will reach the Prime Minister’s pledge of halving inflation, because that is the biggest help we can give to households this year.
Alexander Stafford (Rother Valley) (Con)
Mr Laurence Robertson (Tewkesbury) (Con)
The Chief Secretary to the Treasury (Laura Trott)
Tuition fees have been frozen for 2023-24 and 2024-25, which will help affordability for future graduates. For new graduates, interest rates will move with the retail prices index but will have nothing added.
Mr Robertson
I thank the Minister for that response but, of course, interest rates have made matters much more difficult for graduates, who cannot afford to both pay off their student loan and buy their own property. Is there anything further that the Government can do to help graduates, who are struggling to do both? One of the things we could do is raise the threshold at which they start to pay back the loans.
Laura Trott
I thank my hon. Friend for his question. The most important thing we can do is bear down on inflation, because that will bear down on interest rates, which affect us all. I would also point to the cost of living support that the Department for Education is providing for students. I would be happy to discuss the matter with him further.
Chris Elmore (Ogmore) (Lab)
Alex Cunningham (Stockton North) (Lab)
The Chief Secretary to the Treasury (Laura Trott)
My hon. Friend is rightly very focused on making sure that every single pound of taxpayers’ money is spent wisely, and I can assure him that the Government share that goal. In June, the previous Chief Secretary to the Treasury launched the public sector productivity programme, and we will provide an update at the autumn statement.
Marco Longhi
Estimates show that the public sector today is 7.5% less productive than in the environment just before covid. Does the Minister agree that this could possibly be down to a continued more liberal working from home ethic? How much is this costing the taxpayer?
Laura Trott
My hon. Friend is right that public sector productivity must be improved. That is exactly what the review is looking at and what we will address. I look forward to talking to him more about it in due course.
Alex Cunningham
I welcome the fact that the taxpayer has spent hundreds of millions of pounds on remediation work at the Teesworks site in Redcar. I do not welcome the fact that the assets, including 90% of the operating company and tens of millions of pounds of scrap, have been handed over by the Tees Valley Mayor to two private companies, whose owners are laughing all the way to the bank. Is that really good value for taxpayers’ money?
Laura Trott
I think these claims have been addressed by the Mayor, and I will not have anything further to say about them.
Michael Shanks (Rutherglen and Hamilton West) (Lab)
The Chief Secretary to the Treasury (Laura Trott)
We have announced UK-wide support for households, including cost of living payments, the energy price guarantee and the energy bills support scheme. Taken together, support for households is worth £94 billion and is among the largest packages in Europe.
Michael Shanks
The Institute for Fiscal Studies recently reported that wages in Scotland have risen by 1.5% since 2015, compared with 5% in England. In the face of a cost of living crisis brought about by the Conservative party’s disastrous mini-Budget, wages simply are not keeping up with the cost of living. What can the Minister commit the Government to doing next to help make work pay? Will she, for example, support Labour’s new deal for working people?
Laura Trott
I was pleased to see this morning’s figures, which show that wages are going ahead of inflation. This is very good news and I hope it spreads to Scotland.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Economic Growth
Laura Trott Excerpts(5 months, 3 weeks ago)
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The Chief Secretary to the Treasury (Laura Trott)
It is an honour to participate in the debates following the first King’s Speech for more than 70 years. I thank all hon. Members who have contributed to this debate, including the hon. Member for Bristol North West (Darren Jones) both for his warmish welcome and for his remarks. He and I are both quite new to our posts, and much as we might disagree quite fundamentally on major topics such as taxes and spending, I am sure he agrees that it is a privilege to be closing today’s debate.
During my time at the Department for Work and Pensions, I saw at first hand the impact that Government decisions have on people, and the hugely positive effect that work has on households and regions. I will continue to hold that understanding as I take on my new role, and I look forward to working with Members across the House to make sure that the economy grows, that the wealth spreads, and that the Government are responsible and restrained with the public purse strings. I am sure the hon. Gentleman recognises, as I do, that the Chief Secretary’s job is a vital one that shows a clear difference between our two parties, and I am sure we will have robust discussions in the months ahead. I very much look forward to those opportunities.
We live in a changing world. Even since this Government set out their previous legislative agenda in 2022, we have seen huge upheavals. Putin’s appalling war in Ukraine has now dragged into another year of suffering and brave defiance; the terrorist actions of Hamas in the middle east have caused unspeakable suffering in Israel and Gaza; and all the while, the spectre of inflation haunts the globe, as the financial echoes of Putin’s war, covid-19 and the global financial crisis continue to ring out. What will work to address them is the careful, deliberate efforts that this Government are pursuing, which we will continue in the Chancellor’s forthcoming autumn statement. This is what the Government have done ever since we came to power, and this is what the King’s Speech does now.
Before I turn to the measures in the King’s Speech, it is worth taking a look at what this Government have already achieved. We came to power with a duty to tackle what was then the worst recession since the second world war: 2.5 million people were unemployed and 1.4 million were stuck on out-of-work benefits. What has changed since 2010? Unemployment is down by 1 million people, and 1.7 million have been able to lift themselves out of poverty thanks to a new living wage.
While many in the EU are experiencing a recession, here in the UK, as my right hon. Friend the Member for North Somerset (Dr Fox) regularly points out, since 2010 we have grown faster than France, Germany, Italy, Spain, the Netherlands and Japan, and our recovery from the pandemic has been one of the strongest in the G7. We have grown our economy by 65%, and cut our emissions by almost 50% since 1990. Perhaps most impressive of all, we have done this while slashing our borrowing by 70% between 2010 and the start of the pandemic. This is what a Conservative Government deliver.
Here I should consider the amendment in the name of the Leader of the Opposition and the shadow Chancellor, the right hon. Member for Leeds West (Rachel Reeves), although I will be brief as Opposition Members did not cover it much. If their amendment had been in force in 2020, we surely would have found ourselves in a much worse position. It would have hampered the Government from acting in an emergency, as we did during the pandemic, because instead of taking decisive action to support people and businesses up and down the United Kingdom, we would have been forced into a 12-week process with the OBR before we were able to deliver any support whatsoever. I am sure even Opposition Members would recognise that that is not an optimal outcome. Indeed, the Opposition seem to have put forward a plethora of new spending commitments today prior to an updated OBR forecast, which I would suggest is not in the spirit of their own amendment.
Turning to some of the measures mentioned today, the shadow Chancellor criticised the lack of action on the cost of living, yet did not once mention inflation. It is up there with the right hon. Member for Doncaster North (Edward Miliband) forgetting the deficit. Getting inflation down is the ultimate solution to the cost of living pressures we face. It requires disciplined, unglamorous work, which means keeping inflationary spending down. There was not one proposal in the shadow Chancellor’s speech to address it. It is true that she did not mention the deficit-busting, inflation-producing £28 billion of borrowing in her speech, but that is another Labour policy well overdue for a U-turn.
Key to driving non-inflationary growth will be boosting trade. The Brexit zombies on the SNP Benches fail to recognise the potential of the trade deals we have with the rest of the world. My right hon. Friend the Member for North Somerset and my hon. Friends the Members for Crawley (Henry Smith) and for Burnley (Antony Higginbotham) know the benefits that our open, international, free trading stance will bring. Deals such as the CPTPP with the fastest-growing economies in the world will deliver the clear benefits of Brexit, and we should be talking them up, not down.
Indeed, there was too much talking down in the debate today. The hon. Member for Birmingham, Selly Oak (Steve McCabe) asked who is better off. I will tell him who is better off: the 1.7 million people who have been taken out of poverty since 2010, the 200,000 pensioners taken out of poverty, those helped by the 40% drop in youth unemployment, those for whom it now pays to go out to work, children learning in schools that are more likely to be good or outstanding and, as my hon. Friend the Member for West Worcestershire (Harriett Baldwin) said, the low-paid, the number of whom has dramatically fallen since the national living wage was introduced. Since 2015, the proportion of people on low pay has halved.
My right hon. Friend the Member for Middlesbrough South and East Cleveland (Sir Simon Clarke), with whom I hope to engage a lot as I hugely respect the work he did as Chief Secretary to the Treasury, pointed out the dramatic impact that a Conservative Government and a Conservative Mayor, the brilliant Ben Houchen, have had on Teesside. He talked about Labour’s legacy there as one of mediocrity and failure, and he is right. With steelmaking back, carbon capture and storage, and a new net zero power station, this is levelling up in action, and that is what a Conservative Government deliver.
Turning to growth and supply side reform, which lots of people have mentioned today, at the spring Budget we announced a comprehensive employment package designed to remove the barriers that are preventing people from getting back into work. This is the welfare reform that was called for by my hon. Friend the Member for Waveney (Peter Aldous) and others. At the autumn statement, the Government will announce a package of long-term measures, creating an investment economy by unlocking business investment.
I welcome the remarks by my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) about the digital network Bill and the importance of broadband. I am glad to have heard the hon. Members for Lancaster and Fleetwood (Cat Smith) and for Walthamstow (Stella Creasy) bring up childcare. This is an important measure for growth as well as the right thing to do, and I hope that they welcome our £200 million investment. I do not think that the hon. Member for Lancaster and Fleetwood is in her place, but I note her remarks on sodium valproate and will make sure that they are fed into the Health team. That was very important.
On the supply side, many Members, including my hon. Friends the Members for Burnley, for Burton (Kate Kniveton) and for Hastings and Rye (Sally-Ann Hart), the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) and my hon. Friend the Member for Stoke-on-Trent South, talked about the importance of transport in their local areas and of protecting consumers travelling by air.
Housing has been brought up by a number of Members. We are on track to deliver the 1 million houses over this Parliament, and the Chancellor is looking at what more we can do to support planning reform, particularly on infrastructure. I was slightly incredulous to hear the Opposition talk about boosting housing when they have just blocked a measure that would have added 100,000 much-needed homes. Being in opposition is as much about what to support as it is about what to oppose, and that was a mistake. However, I welcome the Opposition’s support, albeit grudging, for the Renters (Reform) Bill and the leasehold Bill.
Before I close, I should mention the brilliant maiden speech by the hon. Member for Mid Bedfordshire (Alistair Strathern), whose beautiful constituency we have all been seeing a little bit too much of recently. It was a gracious and accomplished maiden speech that spoke to his decency in the way he conducted the campaign. I wholeheartedly agree with him that there is nothing better than to represent the place in which one grew up. It is the world’s greatest privilege. This place, across the House, does an enormous amount of good. I hope and expect that the family, colleagues and friends that he brought along today were proud to see his excellent speech, and I look forward to further contributions.
We are taking the actions that will make this country better. The King’s Speech aims to push the UK into the spotlight on the international stage, embracing our role as a champion of global free trade, open for business and investment from around the world. Just look at our decision to scrap HS2, a one-route project where the right decision was postponed and kicked down the road as costs mounted up. The £36 billion that we are saving by cancelling HS2 will be reinvested to deliver Network North, improving journeys and infrastructure between and within the towns and cities of the north and the midlands, instead of just giving the people of the north a quicker way to move south.
The legislative agenda cuts through the noise of those who want to talk Britain down, who speak freely about our challenges but are tight lipped on solutions, and provides clarity, certainty and stability for those who need it most.
The last years have not been easy; the coming ones will offer their own challenges. I understand those who want to wish those truths away, but this Government’s instinct is to treat the public like adults. It is important that the public understand the challenges that we face, so that they can understand the changes we have made to safeguard their future. This Government’s legislative agenda recognises that, balancing the delivery of both security and opportunity. The Government have a track record and a long-term plan to do just that, and I am hugely proud to play my part as Chief Secretary to the Treasury.
That is why we will deliver licences for fresh oil and gas fields, continue to work to halve inflation and bring forward the trade Bill, cementing our place in the comprehensive and progressive agreement for trans-Pacific partnership, locking in long-term rights for UK firms to do business in the fastest growing region of the world.
None of this is easy. These decisions involve tough trade-offs, but because of our history of delivery and our long-term plan for the future captured in this King’s Speech, I know that the Government can achieve their aims for this country and help every part of the country to reach its potential. I commend the Loyal Address, unamended, to the House.
Mr Deputy Speaker (Mr Nigel Evans)
For those who are a bit rusty on King’s Speech procedure, I hope to assist. I will put only the amendment in the name of the Opposition today. Other questions will be put tomorrow.
Question put, That the amendment be made.
Oral Answers to Questions
Laura Trott Excerpts(1 year, 6 months ago)
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Kwasi Kwarteng
As my right hon. Friend the Chief Secretary said earlier, most of the measures that constitute the £37 billion intervention were targeted directly at the vulnerable constituents of all of us in this House. The energy price guarantee will also be greatly beneficial to people across our country who are suffering because of the cost of living. The Government are committed to a huge amount of intervention, and our top priority is making sure that everyone gets through challenging times as best they can.
Laura Trott (Sevenoaks) (Con)
Kwasi Kwarteng
Absolutely. I am in frequent contact with my right hon. Friend the Business Secretary, and we have sequestered and dedicated a pot to help people who are off the gas grid. We are happy to help my hon. Friend and her constituents in this challenging time.
Economy Update
Laura Trott Excerpts(1 year, 11 months ago)
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Rishi Sunak
I know that my right hon. Friend the Energy Secretary is engaged with all the companies on how best to support people through this. With regard to the support that we have announced today, about 7% of households are on non-smart pre-payment meters and we want to make sure that we get their support to them. That has been taken into account and will be delivered through vouchers. The remaining pre-payment meters are smart, and the credit can be put straight on those meters so those people benefit.
Laura Trott (Sevenoaks) (Con)
Can my right hon. Friend confirm that, under Labour’s plans, my most vulnerable constituents in Swanley, Westerham and elsewhere will receive £600, while under our plans they will receive £1,200?
Tackling Short-term and Long-term Cost of Living Increases
Laura Trott Excerpts(1 year, 11 months ago)
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Edward Miliband
The hon. Gentleman is absolutely right. I have been around politics for a long time, as the House knows, but I cannot remember—nobody in the House can remember—facing the kind of emergency that we do currently.
The spring statement was the most recent chance for the Chancellor to redeem himself; it was just days before the April energy price rise came into effect. It was apparent to everyone across this House and in the country that what he had offered was woefully inadequate. People were literally pleading with him to do more on energy bills, but he just doubled down on his failure. He has had three chances in the past seven months, and none of his responses has been equal to the emergency. The truth about this Chancellor is that at every step of the way he has been in denial, slow to act and wholly out of touch in his response.
Laura Trott (Sevenoaks) (Con)
It is right that we debate what more we can do, but does the right hon. Gentleman accept that the measures that we have put forward on the national living wage and universal credit, and the national insurance threshold changes, add up to more than he is suggesting?
Edward Miliband
No, I do not accept that, and I can tell the hon. Lady that 8,014 families in her constituency will benefit from the changes we are suggesting if she votes for them tonight. Let me tell her and the House what the Chancellor’s failure means in reality. This year, the basic level of universal credit for a single person aged over 25 is £334 a month. The Chancellor’s measures this April were so feeble that someone on that benefit will be expected to find as much as £50 or more a month simply to cover the increase in their energy bills. That is leaving aside the soaring costs of food and other goods. That £50 is around 15% of their income, so what are they going to do? They will not be able to afford to pay their bills, they will get deeply into debt and they will go without food. It is already happening to millions.
On Friday, in the citizens advice bureau in my constituency, I met someone who is in circumstances similar to those I described. Let me be honest: I have no idea how I would cope in those circumstances. Does any Member of this House? Maybe the Chancellor can tell us what somebody in those circumstances is supposed to do. If he cannot answer that question, it should tell him something—that he is failing in his duty to the people of this country who most need his help.
What makes the Chancellor even more culpable is that something that could help is staring him right in the face. It is something on which the case has become unanswerable, and on which the Government have run out of excuses, while oil and gas producers are making billions: a windfall tax. It is so hard to keep track of the Government’s position on a windfall tax that I have given up, but I think the Chancellor has said he is prepared to look at the idea. Honestly, the British people cannot afford to wait for him and his dithering anymore, or for his hopeless excuses.
I want to go through the hopeless excuses, because this is an important argument that this House and this country need to have. What are the Government’s excuses for not applying a windfall tax? First, they said in January that the oil and gas companies were, in the words of the Education Secretary, “struggling”. BP has its highest profits for a decade, Shell has its highest profits ever, and the boss of BP, Bernard Looney, describes the price hike as a “cash machine”—and these people say the companies are struggling. Perhaps we can have a show of hands: does anyone on the Government Benches still believe that those companies are struggling? What is the Government’s next excuse? They argue that a windfall tax will hurt investment—
Laura Trott (Sevenoaks) (Con)
I welcome the opportunity to debate this topic and discuss what we can best do to help all of our constituents who are suffering today. Inflation is running at 7% here, 7.5% in Europe and 8.5% in the United States of America. The Bank of England Governor has been clear that 80% of the inflationary forces are outside the Government’s control and the reach of monetary policy, so we must look to fiscal policy to do as much as we can, while not making the problem worse by being inflationary.
I turn first to the windfall tax. It is important to get the quantum in perspective. A windfall tax is not a silver bullet. It would be worth £2 billion overall, I think, which is about £72 a household or, if we targeted that at the lowest 25%, £280 a household. Of course that is helpful, but would it solve the problem? No.
I have three concerns about the design of a windfall tax and whether we employ it. First, on protecting consumers, it is unorthodox to suggest that price reductions in a sector are best served by whacking a tax on the producers. It is difficult to see how that would result in price reductions in the sector. Of course, we have the price cap, and that would help in some respects, but without proper controls it is difficult to see how the costs would not ultimately be passed on to consumers.
Secondly, on competition in the market, we all know that the industry is volatile: BP’s profits last year were at a record low, and they are now at an enormous high. The right hon. Member for Doncaster North (Edward Miliband) was absolutely right that BP and Shell have not said that a windfall tax would be a disaster for them, but in many ways they would not say that, because they are huge players in the market and they could absorb it. The problem will be much more with the smaller players and the discouragement to competition that such a tax might result in. I strongly believe that the best way to drive down prices in the market is by encouraging competition. We have lost that recently, and I do not see how a windfall tax would encourage it or get it back in place.
Finally, we need to be clear that the best thing we can do to help everyone is drive up economic growth, which is best served by businesses creating jobs and driving consumption. If we put a windfall tax on industries at random, that will discourage investment. I am not talking about individual projects here and there, and I recognise what BP has said, but in the business environment overall we need to be extremely clear about what our criteria are for imposing windfall taxes and, therefore, the impact those will have on investment in business overall. What we cannot do under any circumstances is give up our reputation for being a stable, low-taxation economy.
That aside, I have one idea of my own to put to the Front-Bench team. I think that we should introduce a measure to make it illegal to disconnect the energy supply, similar to that for the water supply. Following privatisation in 1989, the Water Act 1989 prohibited the disconnection of the water supply to domestic customers for reasons of non-payment. Companies can therefore still take people to court for moneys owed, but they cannot cut off supply. Currently, energy suppliers cannot disconnect households over the winter months in some situations, such as those who live alone or with other people who have reached the state pension age. I propose that we extend that more widely to ensure that, in the very worst circumstances, we do not have people’s homes cut off. I hope that can be taken away and considered. More broadly, when we are talking about these issues and how we best help people, let us think about the potential quantum for the windfall tax: what it will raise, the potential harm it may cause and what the alternatives are.
Health and Social Care Levy
Laura Trott ExcerptsWednesday 8th September 2021
(2 years, 8 months ago)
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Rachel Reeves
My hon. Friend speaks well of what our constituents in Leeds North West and Leeds West will be facing with that double whammy of universal credit and the national insurance increase, in addition to the other tax increases from this Government. I will take a final intervention and then I will start to wind up.
Laura Trott (Sevenoaks) (Con)
I thank the hon. Lady for giving way. There is an obvious precedent for this national insurance rise to raise money for the national health service, which is from 2003. Were Labour wrong to raise national insurance for the national health service in 2003?
Rachel Reeves
We had a clear plan to bring down waiting lists, a plan that this Government are sorely lacking. The economic circumstances are different, too. The Government’s tax on jobs comes at the worst possible time. Businesses create jobs and will drive our recovery. Labour is a party that is pro-worker and proudly pro-business, too. I am proud of the decisions that the former Prime Minister and the former Chancellor made that brought down waiting lists to their lowest ever level—targets that have never been met under 11 years of Tory Government. We want business to succeed, to invest more, to employ more, to pay more and to create more wealth.
These are still precarious times, with many businesses in all our constituencies not yet back to full capacity and others considering how they are going to repay the loans taken on during the pandemic. What do the Chancellor and the Minister think the effect of this tax rise on jobs will be? That has not been set out. It could mean an attempted squeeze on wages and conditions, even higher prices for customers, or the scaling back of recruitment and growth plans. It will affect people and it will affect the Exchequer, too. It is a false economy. The Chancellor and the Minister do not need to take my word for it. The British Chambers of Commerce described it as:
“a drag anchor on jobs growth”
and believes it will
“dampen the entrepreneurial spirit needed to drive the recovery”.
Make UK says it is
“ill-timed as well as illogical”.
The CBI says that it
“will directly hurt a business’s ability to hire staff at a time when businesses have faced a torrid 18 months.”
The Federation of Small Businesses says that
“this increase will stifle recruitment, investment and efforts to upskill”.
They are joined by the trade unions. The TUC says it is wrong to hit young people and low-paid workers
“while leaving the wealthy untouched.”
We agree with businesses and we agree with our trades unions, too. They are right. This is a tax on jobs. It is a tax on the economic recovery and we will not support it.
Let us go back to the key questions that need answering. Will this plan deliver what is promised for our health and social care sectors? No. Will it clear the NHS backlog by the end of this Parliament? No—and the Health Secretary says no. Will it give social care the resources it needs for the next three years? [Hon. Members: “No.”] Is there a plan to reform social care? [Hon. Members: “No.”] Will it create more and better paid jobs in the economy? [Hon. Members: “No.”] Is it fair across the regions? [Hon. Members: “No.”] Will people be prevented from selling their homes to fund their care? [Hon. Members: “No.”] Will this tax bombshell help our economic recovery? No. Is it the last tax increase in this Parliament? No. This whole thing is unravelling. No wonder that Ministers are in a desperate rush to get it through. The Chancellor is absent today. Perhaps he has gone for a swim.
Covid has tested the people of our country like nothing else in any of our lifetimes. After the last year and a half the country deserves a much better future, a recovery that enhances and enriches all our lives and in all parts of the country. Social care is a huge challenge and there are other challenges coming too. We need to do things differently. Labour’s test is simple: does it fix the problem and does it do it in a fair way? The answer to both of those questions is no. That is why Labour will vote against this unfair, job-taxing, manifesto-shredding tax bombshell this evening.
Laura Trott (Sevenoaks) (Con)
This area of social care has not had a happy history in respect of political point scoring, and, unfortunately, we have seen plenty of that today on the Opposition Benches. However, it is unacceptable for us to play Russian roulette with people’s life savings when it comes to social care. One in seven people are going to be affected by this. Just because their loved one died of dementia rather than cancer, their life savings are being entirely wiped out. That is not right, but it is right that we are doing something about it, and I am glad that we are seeing some element of cross-party consensus on the model. It is the Dilnot model, and the Health and Social Committee, of which I am a member, put it forward as a proposal. It was supported by the Liberal Democrats when we were in government with them, and to a degree, I think, by the Labour party. So at least we are moving forward slightly in that regard. The real question now is how we pay for this. There has been a lot of confected indignation on the other side of the House to cover up a lack of a plan. National insurance is imperfect in many ways, but, as Tony Blair said:
“If we want sustained investment in the NHS over a period of time, we are going to have to pay for it.”
He suggested that national insurance was the fairest and best way to do it. I agree with him, even if members of his own party do not seem to. Paul Johnson from the Institute for Fiscal Studies says that
“overall much needed reforms to social care are being introduced and unavoidable pressures on the NHS are being funded through a broad based and broadly progressive tax increase. That is better than doing nothing.”
It is incumbent on Opposition Members to really look at themselves and to understand whether they think real change is needed. If it is, they need to come up with a better alternative. Otherwise, they need to walk through the Lobby with Members on this side of the House who are taking difficult decisions on behalf of our constituents. These are not easy decisions. They are not decisions that can be explained away by saying that we are not doing this in a broad-based way when we are, or by making things up about this not being progressive when it is. We are taking these difficult decisions because that is what the Conservatives do in a moment of crisis.
My colleague on the Select Committee, my hon. Friend the Member for Peterborough (Paul Bristow), was right to say that reform was needed. This is an awful lot of money that we are putting into a system that is very broken. A third of social care staff leave every year and there are 120,000 vacancies in the sector. We will need to up the quality of provision and to inspect it properly. We will need to ensure that the integrated care services that are being put in place are assessed by the Care Quality Commission. We will also need to ensure that local government is held to account on the standards of care that it provides. These are all important reforms. We need to ensure that social care is truly part of the NHS, so that a nurse can take a year to go and work in the care service and then come back into a hospital. These reforms will all be necessary to ensure that we deliver on our high ambitions for change. We are taking steps to make that change. We will ensure that the options available to families are of high quality and that they will not take away their life savings. We are taking difficult decisions, and the Opposition need to look at themselves and decide whether they are doing the same.
Oral Answers to Questions
Laura Trott Excerpts(3 years, 2 months ago)
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Tom Hunt (Ipswich) (Con)
Laura Trott (Sevenoaks) (Con)
Greg Smith (Buckingham) (Con)
Rishi Sunak
My hon. Friend is absolutely right, and I congratulate him; he has long campaigned on the importance of a town deal for his local community and, indeed, a freeport. I am delighted that this Budget could deliver both of those for his constituents and I agree with him that it will deliver growth, jobs and prosperity to his local area.
Laura Trott [V]
I thank the Chancellor for his earlier response. The measures in the Budget provided a lifeline to high streets in my constituency, from Westerham to Swanley. In particular, the restart grants are much anticipated. Can the Chancellor confirm when local authorities will be able to begin distributing these vital grants?
Covid-19: Economy Update
Laura Trott Excerpts(3 years, 6 months ago)
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Rishi Sunak
I thank the hon. Gentleman for his comments. He is right and I can appreciate the confusion. We try to do things on a UK-wide level, but obviously not everything will be on that level. I cannot give him a precise figure, because these are demand-led schemes. What we have tried to do is provide upfront funding guarantees in advance of that demand being drawn down in England and the Barnett consequentials being delivered. We true those up on a regular basis—I am happy to write to him with further details—but we try to provide the funding to Wales, Scotland and Northern Ireland in advance of that demand actually occurring in England. I think that is a better and more generous approach for the devolved nations.
Laura Trott (Sevenoaks) (Con)
I welcome the Chancellor’s statement. Keeping a link to viable jobs is absolutely crucial, so does my right hon. Friend agree that it is better to keep businesses open and functioning where possible with support, rather than locking down nationally, multiple times?
Rishi Sunak
My hon. Friend is absolutely right. When I talk to both businesses and employees, they say that what they want is to be able to go to the jobs they love. They want to be able to do that. They want to be able to serve customers and they want to be able to welcome us all back to their restaurants, pubs, cafés and so on. She is right that we have to strike that balance. I think the approach that the Government have taken does that—it strikes that balance. The support we have put in place today will enable as many of those people to remain in their job working hard and hopefully have a fulfilling future to come.
Coronavirus Job Retention Scheme
Laura Trott Excerpts(3 years, 7 months ago)
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Patricia Gibson
I will make some progress.
Many businesses are awaiting further lockdown easing before some or all of their staff return to pre-covid working hours. Numerous other viable businesses are simply not in a position to keep staff in their jobs without this crucial support. Indeed, in our own island communities, such as the Isle of Arran in my constituency and the Isle of Cumbrae, there has been even greater disruption with the necessity of capacity restrictions on ferries. With the main tourism season drawing to a close, further support for viable jobs is essential.
Government Members continue to throw their hands in the air and ask, “For how long should support continue?”, to which we on the SNP Benches reply, “For as long as necessary to save tens of thousands of viable jobs, perhaps millions in the longer term.” We say: we want the Chancellor to keep his word when he said he would do “whatever it takes” to save jobs. Let us put to bed this economic illiteracy about what that would cost. The direct cost to the Government of extending furlough would be offset by income tax and national insurance contributions paid on the wages of those remaining on furlough and by savings on unemployment benefits that would not need to be paid. The net cost of extending the furlough scheme across the UK would be around £10 billion, according to the National Institute of Economic and Social Research. We also need to factor in how that would help economic growth and leave public debt slightly lower as a share of GDP than if the scheme were closed down next month, and that is before we factor in the likely significant social cost of not extending the scheme. Without an extension, unemployment is likely to be as high as 10%.
Laura Trott (Sevenoaks) (Con)
I accept many of the points that the hon. Lady is making, but does she also accept that some of the jobs she is talking about will not be viable when the furlough scheme ends and that extending it would delay the opportunities to retrain or accept jobs in other sectors?
Patricia Gibson
I thank the hon. Lady for her point, but again we hear the argument that, because some of these jobs cannot be saved, no jobs should be saved. We say: let us invest in our people and assess the economic damage afterwards. At the moment, when the picture is not clear and the facts are still emerging, and when the extent of the damage is still unknown and the economy is still in a critical condition, we cannot afford to wind the scheme down in October.
Laura Trott (Sevenoaks) (Con)
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate. I am glad that the motion welcomes the job retention scheme. It is clear from the contributions we have heard so far, from across the House, that the scheme has been an absolute lifeline for people’s jobs. It has certainly been a lifeline in Sevenoaks, where it has saved 12,000 jobs and been vital for so many institutions, from the brilliant Stag theatre to the equally brilliant Bricklayers Arms in Chipstead. But the question now is what we do next.
I will focus my remarks on women and women’s jobs, which have been disproportionately affected by the crisis. I will argue that we do that by encouraging opportunities for women to be economically active where possible, rather than not. It is worth dwelling at the outset on the impact of coronavirus on women. Before the crisis, we had a record 75% participation rate, but the pandemic has hit women’s jobs hard. Women are more likely to work in sectors that have been completely shut down, such as hospitality. The virus has increased the burden of unpaid care, disproportionately affecting women, according to McKinsey and other studies. Mothers have reduced their paid working hours as a result, and by more than fathers. Overall, women’s jobs are almost twice as likely to be vulnerable than men’s jobs, and there is a fear that the gender wage gap will rise because women’s jobs are more likely to be interrupted in the workplace than men’s jobs.
It is in that context that the furlough scheme has been absolutely crucial. Women are 14% more likely to be furloughed, and from July they have been able to come back flexibly, which is crucial. The flexibility shown by employers in relation to home working has also helped many. How do we make sure that women can continue at that high participation rate? How do we ensure that the impact they felt over the crisis does not continue to high rates of unemployment?
To continue furlough indefinitely would, in my view, risk rising female unemployment. It would keep women in jobs that simply, and very sadly, just do not exist. I argue that we should instead focus on encouraging employers to rehire; creating new jobs; supporting childcare and making sure that schools stay open; and encouraging employers to continue being flexible, and indeed to increase flexibility.
On rehiring, I disagree with the hon. Member for Blaydon (Liz Twist). I think that the job retention bonus scheme will be crucial to allowing women to get back into work. As I have said, women are more likely to be furloughed, so the scheme is more likely to benefit them. It is something I welcome and encourage.
With regard to creating new jobs, Andy Haldane—I am sure that he will be quoted at length today—has said clearly that
“keeping… jobs on life support is in some ways prolonging the inevitable in a way that probably doesn’t help either the individual”.
I agree. What we need are new, flexible opportunities in the workplace, such as the green jobs encouraged by the green homes grant, and we should offer retraining opportunities. I hope that we will see that in the upcoming Budget, because that would really make a difference for women, enabling them to move into new jobs in the new workplace that we are inevitably coming into.
We also need to support childcare and keep schools open. It is critical that nurseries, childminders and schools stay open. Whatever happens over the next few months, it is absolutely essential that we make sure we do not see a drop-off in female employment rates, particularly as we see the end of furlough. I would also like to see continuing flexibility. The pandemic has caused a shift in working that has been fought for for years. It helps working parents. We should encourage it and see it continue.
To conclude, I welcome furlough, but continuing it for too long would risk women’s jobs in the long term. We need to focus on getting women economically active, back in work and supported by childcare.