Autumn Statement Resolutions

Steve McCabe Excerpts

Monday 27th November 2023 Commons Chamber

[Mel Stride]

I was expecting a devastating, killer intervention, given how keen the hon. Lady was to intervene, but it never quite arrived. She will know that in the Budget, the Chancellor made a substantial investment—the hon. Lady mentioned the figure £5 billion—in childcare. In my Department that is huge, because it means that we will deal with the retrospective nature of the first month’s payment, and that the amount available to those wishing to take advantage of childcare will be increased by some 49%.

Through our back to work plan, we are phasing in more intensive support and more rigorous requirements on jobseekers much earlier in their claim. We are accelerating the point at which claimants are required to undergo a more intensive 12-month work-search regime, which will kick in six months, rather than nine months, after the start of a claim. Anyone who has not moved into work by the end of that will be required to accept a mandatory work placement or other intensive activity to improve their chances of employment.

For those who refuse that support, it is right that there should be consequences. If a claimant does not accept those new conditions without good reason, their universal credit claim will be closed. As a result, no claimant should reach 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with jobcentre support. We will back that up with closer monitoring to ensure that the rules are being followed, including by tracking claimants’ attendance at jobs fairs and at interviews organised by jobcentres. That will mean that work coaches have the information that they need to know whether claimants are meeting their commitments. As part of this more rigorous approach, we will continue looking at the impact of more intensive support at seven weeks into a claim being delivered through our additional jobcentre support.

These back to work reforms strike at the heart of the quid pro quo that defines the contract between the state and individual. We are saying, “The Government will provide you with the support you need to move into work, but if you fail to keep your side of the bargain—if you refuse to engage or ignore available job opportunities —we will stop your benefits.”

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I do not think that many people will object to the idea that those who can work should work, and that the Secretary of State’s measures to get people who are capable back into work should be adopted. However, he will be aware that the Work and Pensions Committee has recently been considering vulnerable people who are entitled to benefits but do not get them. What safeguards can he provide to guarantee that the health of people who are ill is not made worse by the pressure that some jobcentres will apply in trying to meet his targets?

[Mel Stride]

The hon. Gentleman raises a really important point. I have great respect for him, and I have appeared before the Select Committee and been cross-examined by him. He is right to raise those kinds of concerns. They are concerns that we think about on a daily basis in my Department, to make sure that we get it right.

The regime I am outlining is for people who have been intensively supported for 18 months during their job search, who are fit and able—so they are not the people the hon. Gentleman described—and who, when presented at that point with the opportunity for work, decline that work. I think most people up and down the country would feel that it is right that there are consequences at that point.

When it comes to those who cannot work—those who are long-term sick or have significant disabilities—I want more than anybody else, and as much as any other person in this House, whichever side they may be on, to make sure that, as a civilised society, we are there to support them, no questions asked. But we can only do that for the most vulnerable in our society if we have a fair system that carries the support of the general public and can fund itself in the way we need it to.

Our back to work plan is about putting fairness at the heart of our welfare system: fairness for claimants who play by the rules and try their best, and fairness for taxpayers who contribute to the system. Contrast that with the Opposition, who have no plan. The only serious proposal they have for welfare reform is to water down benefit claimants’ requirements to work, which could cost £2 billion. That is not just reckless but unfair. It is no wonder that Labour has never left office with unemployment lower than when it entered it. It is no wonder that under Labour, youth unemployment rose by over 40%, unemployment increased by over 1 million, and more than 1 million people were left to languish on out-of-work benefits for almost a decade. That was not a record in office; it was a national disgrace. On Labour’s watch, countless lives were left to ruin.

The puddle of nihilism that is the Opposition Front Bench has no plan. Labour Front Benchers carp and vacillate from the sidelines, suck their teeth and dither, transfixed on the one hand by the fairer approach that they know in their heart the public demand, but frightened stiff on the other hand by the rank and file behind them. Is the truth not rather simple, Mr Deputy Speaker? They have no plan because compassion demands courage, and by their omissions they tell us that they have neither. This autumn statement protects the poorest and most in need, rewards work by cutting taxes and increasing pay, and takes the long-term decisions on welfare reform by helping people into work, growing the economy and changing lives.

--- Later in debate ---

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

It is difficult to know whether what we had last week was an autumn statement or a pre-election mini-Budget. It was big on promises and very optimistic, but the growth figures are disappointing and inflation is falling slowly—very slowly. The Chancellor says he is putting money in people’s pockets, despite the Bank of England wanting us to spend less. He has agreed to freeze the small business rates multiplier for another year, but the increase in the minimum wage, though welcome for employees, will largely offset any benefits that businesses gain from the rates freeze.

Claire, the enterprising woman who runs Aspire, a hair and beauty treatment business in my Selly Oak constituency, has told me that this will mean gaining on business rates but losing on wage increases. Claire—who, through her own efforts and determination, has opened not one but two shops and held her business together during the pandemic by sheer hard work and creative advertising on social media—does not begrudge her 15 staff a wage increase. She acknowledges that they need it, but despite working all the hours she can, she has to accept less for her and her family because she cannot increase prices; otherwise, she will shrink her customer base, because they are all struggling with the cost of living crisis.

The Chancellor wants to be seen as promoting growth and cutting taxes, yet the tax burden is at its highest since the second world war, living standards are set to fall 3.5% below pre-pandemic levels—the worst reduction since the 1950s—and growth is at 0.6% compared with 2.1% in the United States, 2.5% in Spain, 2.3% in Portugal, 2% in Ireland and 1% in France. It is also hard to reconcile the image of tax-cutting Tories with the Office for Budget Responsibility’s forecast that 4 million people are going to end up paying more tax due to fiscal drag. According to the Institute for Fiscal Studies, no Parliament has presided over larger tax increases since the 1950s. Who would have expected nurses and police inspectors to be paying the top rate of tax? They are hardly wealthy.

The Chancellor claims that he has reduced the debt. He has; it is now a mere £2.7 trillion and projected to be about 98.6% of GDP and not the 100% that he feared. But even this wonderful feat has only been achieved by sleight of hand, as he has excluded Bank of England debt from his figures. The much-vaunted national insurance reduction of £450 pales into insignificance when set against monthly rises in mortgage payments of £300 or more. Higher interest rates, and therefore higher mortgage repayments, are expected to hit around 4 million families. Against this harsh reality, it turns out that the Chancellor is barely giving working people enough back to be able to afford a weekly portion of fish and chips.

There are also too many households with nothing put away for a rainy day. Our savings ratio is lower than competitors such as Germany and France, and mortgage payment increases are estimated to take the number of households with no savings to around 7 million. That is one in four UK households. And where was the update on the energy social tariff, promised in last year’s autumn statement? It turns out that not even the consultation has taken place, so this winter people relying on medical devices will have to make a choice. Many of those with disabilities and with conditions that react badly to the cold will suffer as they struggle with higher bills.

The Chancellor’s big offer for businesses is full expensing, in what he called the largest tax cut for businesses in modern history. For every £1 million a business invests, it will get £250,000 off its tax bill in the same year. Alas, it is hard to find any estimate of just how many businesses will benefit. Can the Minister say just how many companies he expects to replace £1 million-worth of plant and machinery in a single year? Even those that do benefit will still suffer due to corporation tax.

For many businesses, the rise in the minimum wage will be accompanied by a 6.7% increase in business rates, adding to the pressure on them at a time when supplies, raw materials and other costs are increasing but their prices are not, all of which puts pressure on jobs. I have yet to come across a company in my constituency that appears to qualify for any energy support from this Government. It does not matter if it is the excellent Howard Yarnold, a family firm that specialises in the design, manufacture and fitting of commercial and domestic windows, Loaf, the popular organic bakery, or Aspire, which I have mentioned—nobody gets any help. If this was a plan for jobs and enterprise, it has failed.