Working People’s Finances: Government Policy

Richard Holden Excerpts

Tuesday 21st September 2021 Commons Chamber

[Miriam Cates]

What is far more significant is the way in which we tax individuals—potentially spreading people’s income tax allowance and things like that—rather than looking at household income; that would give families far more choice about how they spend their income and organise their lives, and make family life much more affordable.

Thirdly, we have to address the long-term affordability of our public spending commitments. The welfare state that we have today was designed 80 years ago, when life was very different. Demographics were different then. There was no paid-for childcare or paid-for social care. Most women did not work. There was a huge amount of free care and community living going on that we just do not have, or that there is not nearly as much of, today. Of course, people then also spent a far higher percentage of their life working, whereas now people spend much longer in education and much, much longer in retirement, which means that proportionally, over the course of someone’s life, they are spending far less time paying tax and paying for insurance—paying for the benefits that we all want to enjoy.

The Office for Budget Responsibility forecasts that public sector net debt could rise to 300% of GDP by 2070. We just cannot continue in the way that we are now. We need a reset. We need to redesign our public spending and welfare state for modern life and modern demographics. I think we have already established that we cannot tax our way out of this. Of course, we should be trying to grow our way out of it, but we also need a fundamental redesign of the welfare state and public spending.

We also need much more emphasis on community solutions and prevention. It has been an honour to be part of the early years review of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), whose start for life recommendations look at the importance of the first 1,001 days of a child’s life. If we get that period right, we can prevent so many problems that destroy people’s lives in the long term and which are incredibly expensive for public spending. We must spend more and invest in the early years and health prevention. About 40% of the NHS budget is spent on preventable and lifestyle diseases. We have to tackle those things if the state is going to be affordable in the long term. Of course we should innovate, use technology and look at what other countries are doing to address these issues.

We should be concerned about the cost of living. Families up and down the country are struggling, and there are families that are not able to take advantage of opportunities in jobs and higher wages. But this Government have taken action on jobs over the last 18 months, and that is bearing fruit. As our economy is reset, we now have an important opportunity to solve some of the structural issues that we face.

[Mr Richard Holden (North West Durham) (Con)]

One thing that the Government could look at is the 2017 plan to extend pensions auto-enrolment to people who are 18-plus, rather than 22-plus, and to low-paid workers. Does my hon. Friend agree that the Government should take that forward at the earliest opportunity as part of a long-term solution?

[Miriam Cates]

I absolutely agree. In my speech on national insurance contributions a couple of weeks ago, I made the point that the auto-enrolment scheme was a fantastic invention and that we could extend it, as my hon. Friend says, but also that we could look at using it as a model to help contribute to social care, so that people pay into it now and reap the rewards later.

We have to address some of the structural issues that I have discussed. Now is an excellent time to do that, and I would welcome the opportunity to work with Ministers and colleagues across the House to look at innovative solutions to do that.

--- Later in debate ---

[Mims Davies]

I thank my hon. Friend, and she gives me the opportunity to speak about our unwavering support for the most vulnerable people in our society. Week in and week out, the doors of our jobcentres have remained open for the most vulnerable, but that particular jobcentre has been very difficult to get open safely. I am delighted it is opening imminently, and I know what an impact it has in her community and how much work she does to support that community.

To turn to the thoughtful contribution of my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates), she spoke about the hiring opportunities, the opportunities of rising wages and of course the challenges of raising a family, which we all know.

The hon. Member for Aberdeen North (Kirsty Blackman) rightly raised the cost of broadband. I am happy to say that at the DWP we have a social tariff available. We want to support people on low incomes who need specific help, and we have specific support through the benefits system and the flexible support fund. She should be reassured by that.

There is so much more I would like to say. There was the passionate contribution by my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell). There was the speech from the hon. Member for North East Fife (Wendy Chamberlain), who should please look at the strategy in the disability Green Paper and have a look at the impact of auto-enrolment, which I think will reassure her.

The hon. Member for Aberavon (Stephen Kinnock) mentioned the value of UC and how it had supported many people, and he asked about our plan. We have had a plan for jobs since last July, and I will go on to make further comments shortly.

We in this House engage weekly in our surgeries with constituents who are in times of need, and nobody could have foreseen how difficult the last 18 months or so were going to be for our society because of a global pandemic. Members have raised various challenges faced by their constituents in different sectors, and they are important matters, but it must be noted that many constituents on UC are working, which is exactly why we have a taper rate to support people. There is no cliff edge on UC—if you work hard, UC helps you to keep more of your money.

Through this pandemic the Government have recognised that people needed significant additional support and have stepped in to help pay the wages of millions of workers, investing over £400 billion in an unprecedented package of support, protecting jobs and safeguarding livelihoods, as we have heard throughout this afternoon. Our plan for jobs, which I have been delivering on behalf of the Department for Work and Pensions, is wide-ranging. The package includes kickstart, restart, doubling the number of our work coaches, job entry targeted support, job finding support, sector-based work academy programmes, our enhanced youth offer and new DWP youth hubs, and a significant expansion of our jobcentre network, allowing us to assist our claimants, some for the first time in their lives, with not only benefit support and advice but opportunities to progress or transition to a different sector and harness their skills in a new way.

[Mr Holden]

Does the Minister agree that the best way to help people, especially those changing jobs, is to do everything we can through jobcentres? I thank the Consett, Stanley and Crook jobcentres for attending my recent “jobs, jobs, jobs” fair at Derwentside College in North West Durham, which the Pensions Minister, my hon. Friend the Member for Hexham (Guy Opperman), also kindly came along to. Does the Minister also agree that it is incumbent on all Members to do everything they can to help all their constituents get into new jobs given the record numbers of vacancies across the country?

[Mims Davies]

Absolutely: jobs, jobs, jobs is the right message, but very little of that has been heard in the Chamber this afternoon from those on the Opposition Benches. On jobs fairs, it is vital that people come through our doors and see what is out there, because it is time once again to be, as this Government are being, forward-thinking, pragmatic and responsible as we push to build back better. The reality is that it is unsustainable to carry on spending the amount that we have been on welfare measures during this pandemic without ongoing increases in public expenditure, which Opposition Members have complained about. Inevitably, that would also affect working people’s taxes—which is what the debate is about.

The extra provision this Government have provided during the pandemic was temporary, to deal with the pandemic head on. Now that public health restrictions have been relaxed, it is right that these temporary support measures come to an end. Of course we also have our successful vaccine roll-out, and pleasingly—we must remember this—we are no longer in the same situation we were in at the turn of the year, and nor is our labour market. We have been able to reopen society, and our economy is recovering strongly. Growth is forecast by the OECD to be 7.2% this year, reflecting the bounce back we are already seeing right across the UK. So it is a time to be bold and empower people to harness their opportunities and help them progress on to their next stage—to give people both the hope and the skills and training they need to thrive in this changing economy.