Income Tax (Charge)

Debate between Thérèse Coffey and Jackie Doyle-Price

Thursday 4th March 2021 Commons Chamber

[Dr Coffey]

The clear intention is that this is an extension of six months, because that will take this well beyond the aspect of the national lockdown. I was particularly making the point about monthly payments because I have always been clear that this is about UC continuing on a monthly, rather than one-off, basis, and that would be the preferred approach. I am pleased that the Chancellor has agreed with me on that and on making sure we keep that regular payment uplift for the next six months.

Secondly, we have self-employed people on UC, and in addition to the further help through our self-employment income support scheme we will suspend the minimum income floor for a further three months. That means that hundreds of thousands of people will continue to receive financial support based on their current actual earnings, rather than on the assumed amounts we would normally undertake through the gainfully self-employed test.

Thirdly, the further extensions of the furlough scheme to the end of September represent a huge investment in people, keeping them connected to their current jobs and employers. I urge employers and employees to take full advantage of this additional time of furlough to get ready to return to work, and do the training and refresher courses, so they are ready to hit the ground running as their business fully reopens. Taken together, I believe that these temporary extensions will provide essential support as we move along the road map, restart the economy and transition to our full recovery.

Thanks partly to the extension of the furlough scheme, the OBR is now expecting a better jobs outlook than it was in its November forecast, with unemployment now expected to peak at 6.5% at the end of this year, instead of 7.5%, which was its previous forecast. Although that represents a third of a million fewer people than the OBR previously forecast, I fully recognise that the OBR is still predicting that, sadly, unemployment will rise by a further half a million people compared with now. As we have always said, we cannot, sadly, save every existing job, but my right hon. Friend the Chancellor set out yesterday extraordinary measures of support to help businesses stay in business and to create new jobs. The supercharged super-deduction on capital investment is exactly the kind of initiative that can stimulate businesses to invest here in Britain, leading to brand new jobs.

I am very conscious of what the hon. Member for Oxford East said, which is why we have undertaken significant work across government on our labour market sector plans in working through the opportunities we can create, not only by resurrecting some businesses and sectors that have been temporarily affected by the lockdowns but to bring in new jobs. I particularly commend initiatives such as the freeports, which we know will be creating tens of thousands of extra jobs right around the country. I was delighted that Freeport East was successful, as it covers the ports of Felixstowe and Harwich, one of which is in my constituency. It was a great pleasure to work with businesses across Essex and Suffolk to make that happen, particularly with the creation of a green hydrogen energy hub. That is really important investment that will be coming now thanks to the freeport initiative, and I know that the same will be happening right across the country. I can see people in this Chamber, such as my hon. Friend the Member for Thurrock (Jackie Doyle-Price), whose constituents will benefit from her ports coming together to be a freeport.

[Jackie Doyle-Price (Thurrock) (Con)]

Perhaps I could advise the House that this affects not only the ports in my constituency; it is also a partnership with the Ford plant in Dagenham. My right hon. Friend will be aware that there are employment challenges in that borough—it has a very high unemployment rate compared with the rest of London—and the freeport initiative opens up the opportunity for Ford to breathe life back into that site, given the redundant diesel technology that it currently produces. That will attract new investment from a global player. Should that not be welcome?

[Dr Coffey]

My hon. Friend is absolutely right, and I know how much of a champion she has been for the people of Thurrock and the surrounding areas in making sure that they have that opportunity. Indeed, there are opportunities right around the country. We will hear contributions later from Members for the north-east, who will be championing, and are delighted by, not only the freeport in Teesside but the Treasury North campus in Darlington. I am sure that the Leader of the Opposition’s campaign director, who is now in the other place, will also be thrilled that Treasury North will be in Darlington.

Right across the country we are laying the platform for businesses to create jobs, and my Department is ready and primed—indeed, we are already delivering—as we put our foot to the floor, our pedal to the metal, on our plan for jobs. Over this year, as our economy starts to recover, my priority, and that of the Government, is getting people back into work, investing in skills and training, and helping people to get up the career ladder and increase their income.

We came into this pandemic with record high employment. That was down to successive Conservative Governments since 2010 focusing on supporting people in moving to and progressing in work, including by reforming the welfare system through universal credit, which is a conservative benefit. Unlike the legacy benefits, whereby people would often be worse off working under tax credits and similar, universal credit is a benefit that always makes sure that work pays.

I am truly astonished that the Opposition continue to want to scrap universal credit, when it has clearly done its job of getting money into people’s pockets within days of their making a claim when newly unemployed, and remembering that 40% of UC recipients are working and it automatically puts extra money into people’s pockets when their hours are reduced, never mind the £20 uplift for covid.

We know that we have a huge task ahead of us, but I am confident that we will deliver, fuelled by the firepower of our plan for jobs. Just as we have had the jabs army putting vaccines into people’s arms, we now have the jobs army of our work coaches, with an extra 13,500 recruited to bolster our support to help get people back into work.

In the jobs market, sadly it is the hopes and prospects of our young people that have been affected more than most. That is why we launched kickstart, a scheme that helps to give young people that first key step on the jobs ladder and offers employers effectively free access to the next generation of talent, as long as they provide an additional real job and job support.

I am concerned that the hon. Member for Oxford East and the Opposition are giving kickstart a bit of a kicking. Instead of slamming it, they should be supporting it. The Chancellor and I launched kickstart in September, the first young people started their jobs in November, and since then I am pleased to be able to share with the House that around 4,000 young people have now started a job, with 30,000 vacancies to be filled in the next month, and there are more in the pipeline. More than 140,000 jobs have already been approved, with agreed funding, which is more than the 105,000 that the future jobs fund of the last Labour Government created over its entire lifetime—and we have achieved it more quickly.

This is not, however, a tit-for-tat on numbers; this is about real people and helping them with their lives, right here, right now. Take Cerys, for example, who is 19 and had sadly lost her job in catering last year. With the help of her work coach, Cerys has started a kickstart job with Northam Care Trust in North Devon as a care worker. In her own words, this has changed her life. With the ongoing interest from employers and our making it even easier for them to join kickstart with direct applications through DWP, I am confident that by the end of this year, we will have helped a quarter of a million young people become kickstarters, setting them up for a great future.

With kickstart getting into the fast lane, the rest of our plan for jobs is also firing on all cylinders. Recognising that some sectors may continue to struggle, we have doubled the number of places on our sector-based work academy programme—SWAP—scheme to 80,000 this coming year. SWAPs help jobseekers to upskill, retrain and find a route into a new sector with a guaranteed interview for a real job. We are also supporting people in their job searches through our job entry targeted support—JETS—scheme and our job-finding support digital offer, which is now operating across Great Britain, helping those who need only light-touch support.

These schemes are working for people in every constituency. Take Marius from north London. He recently lost his job in the hospitality industry after 15 years and was worried about his future prospects. His local jobcentre referred him to a SWAP, and, after completing just a two-week course to build skills and experience, he was offered a job in the care sector.

This summer, as we restart the economy, businesses will get their restart grants, and we will also restart people’s careers. The new £2.9 billion restart scheme will provide intensive help to over 1 million jobseekers who, sadly, have been out of work for over a year. But we are also helping our jobs army with further assistance by considering new tools to help them diagnose people’s skills and help transform their lives. As part of the Budget, we are investing just over £1 million to pilot the use of new innovative technologies, such as artificial intelligence tools, to match jobseekers’ skills to vacancies they may not otherwise have considered. Work coaches and test sites will start signposting claimants to these services from August.

Also in this Budget, we have brought forward some measures that we know will help people still on low incomes. In particular, we are bringing forward to next month a measure that will allow universal credit claimants who request a new advance to help them with their budgeting to spread the phasing of that support over 24 months rather than 12. That will allow them to retain, on average, £30 more per month up front. We are also bringing forward a reduction in the maximum amount that can be deducted from a claimant’s standard allowance for debts such as rent or utility bills, from 30% to 25%. We expect that that will allow more than 350,000 families with the highest levels of debt to retain up to £300 extra per year.

On top of these measures, we are going further to help some of the most disadvantaged and vulnerable in society. We had already agreed to have exemptions on the shared accommodation rate for care leavers and people who have been in homeless hostels from 2023, but I am pleased to say—this is thanks particularly to the Minister for Welfare Delivery, my hon. Friend the Member for Colchester (Will Quince), who is here in the Chamber today—that we are bringing forward those exemptions by two and a half years, so that we will provide additional housing support for care leavers up to the age of 25, and for younger claimants who have spent at least three months in a homeless hostel, from next month. That will give them the stability and the foundation to take on the opportunities that work can provide, and will provide, to help them build their future.

We have also added a further £59 million of support for local welfare provision, so that the covid winter grant scheme will be extended into the Easter period, helping the most vulnerable families with the cost of food and bills.

My right hon. Friend the Financial Secretary to the Treasury will respond to some of the questions asked by the hon. Member for Oxford East, but it is fair to point out to the House that, among public services, we have already allocated an extra £55 billion of support; we have already initiated, or we are preparing for, the catch-up summer for children; and we will continue to invest in our public services. We are already increasing the number of nurses. We are increasing the number of police officers. I think the public pay uplift is for those people with salaries below £24,000, not the figure to which the hon. Lady referred. We are also making sure that the national living wage rises above inflation from next month.

The hon. Lady also pointed out aspects of statutory sick pay. She will be aware that that is the minimum rate required to be paid by employers; many pay a lot more than that. However, in recognising that universal credit supports people on low incomes, the Department of Health and Social Care introduced the self-isolation payment of £500 in order to help people who need to self-isolate and would otherwise be deprived, perhaps, of a lot more of their usual income. That is a sensible approach that we have taken.

It is important to say that, of course, in order to help control coronavirus infections, we had already changed the rules so that workers could receive statutory sick pay from day one rather than the eighth day of being off work, as well as extending it to people who are self-isolating rather than just sick themselves, so we have already taken measures in that regard to help others. In addition, I think it is an estimated £3 billion of extra support that has gone to local authorities next year to help manage the impact of covid-19 across their services and on their income. Of that, half is non-ring-fenced to ensure that they can adjust to what is needed.

The hon. Lady referred to some of the extra support that will be going in to support towns and other places around the country, with the new town deals that are coming, the community ownership fund—which is particularly interesting—to help communities to buy local assets such as pubs and theatres, and opening up as we get ready for the UK shared prosperity fund. We are already setting the scene with the community renewal funds and the levelling-up funds. I think those measures should be welcome.

Let us not pretend otherwise: as we reflect on 2020 as a wretched year when many people have lost family members, lost friends and lost colleagues, there is no doubt that the British spirit has been tested, but the response has been remarkable and, frankly, typical of the Britain I love. Our focus, with the successful vaccine roll-out, should be on giving hope and confidence to millions of families and businesses that there genuinely is light at the end of the tunnel. While the focus has rightly been on the jabs army, we are mobilising our jobs army to help people to get back into work as we speed towards our recovery.

This Budget builds on what is already one of the most generous and comprehensive economic packages in the world to provide further support and protection. We are ratcheting up our support. We will be super-charging skills. We will rebuild, revitalise and regenerate our economy and level up across the country. I am really looking forward on 21 June to toasting the victory of the vaccine over the virus, when we will get back to normal, building back better and building back fairer, with a brighter future for Britain.