Labour Market Activity

Debate between Mel Stride and Charlotte Nichols

Tuesday 28th February 2023 Commons Chamber

[Mel Stride]

I think the main point—I do not know the specific example to which the hon. Gentleman refers—is that under UC the whole driving principle is that work always pays. As someone gets into work, the benefit is tapered away, but none the less work always pays. That is why we are looking, in part at least, at these very low levels of unemployment and very high levels of paid employment.

[Charlotte Nichols (Warrington North) (Lab)]

The Secretary of State says that work always pays, so why is the clawback rate for universal credit so high? The effective rate of tax for every pound someone earns when on universal credit is about 73%—far beyond what any of us pay in here, and we are in the top 5% of earners in this country. Why does he think it is fair that someone on universal credit should be paying an effective rate that is so high, given the clawback?

[Mel Stride]

It is true that at certain levels of income, marginal tax rates are very high. To improve that situation, we have reduced the taper from 63% to 55%. I would like us to go still further, and if we had the finances we would almost reduce it altogether, but that is not the reality of where we are. None the less, a substantive point remains that people are always better off under UC if they are in work, within the UC benefit environment.

--- Later in debate ---

[Mel Stride]

If the hon. Lady would drop me a line about the point she raises, I would be very happy to raise that specifically and to consider it myself as well.

Could I turn to economic inactivity, and to disability and sickness? This Government have been acting, and we will come forward with further measures very shortly, which I am sure will be of interest to the right hon. Member for Leicester South (Jonathan Ashworth). For example, our Work and Health programme has now been extended to September 2024, bringing an extra 100,000 people into support. We have rolled out health adjustment passports to facilitate more structured conversations between those seeking work, those seeking to employ them and employees in jobcentres. We have been co-locating employment advisers alongside therapists in NHS talking therapies. For those with autism, which is often a very considerable barrier to employment, we have funded no less than 28 different initiatives across local authorities.

[Charlotte Nichols]

I am very interested in what the Secretary of State says about the links between poor mental health and economic inactivity, but one thing I find particularly surprising in this context is the fact that the Government—the Home Office in particular—are specifically blocking research into new therapies and new medicines. Would he perhaps have a word with the Home Office, and get it to reschedule the drugs that we could be looking at for curing people with such conditions?

[Mel Stride]

The hon. Lady is tempting me to plunge into the Department of Health. I certainly hear what she has to say, but let me make a general point about mental health. The most important thing—and, to be fair, the right hon. Member for Leicester South made this point—is that we intervene at the point in the health journey that is as close to the labour market as possible and that we do so as early as possible. What we know is that the longer we allow those conditions to develop and persist, the more difficult it becomes to bring those individuals back into the workforce. That is very much at the heart of the approach I am taking in the work I am carrying out at the moment.

We are also providing more support to those who are waiting in the work capability assessment queue, promoting Disability Confident among employers and promoting Access to Work with disability employment advisers up and down the country. All of that has led to 1 million more disabled people in work since 2017, meeting our 1 million target five years early.

Looking to the future, the White Paper probably contains lots of ideas on health and disability that the right hon. Member for Leicester South has pre-empted and pre-judged—perhaps he has come to similar conclusions to those that we have already come to but are unable to speak about at the moment—so he should be a little patient.

On those in early retirement, who have increased significantly in recent times, we have taken action: with a £20 million fund we substantially increased the number of one-on-one sessions in jobcentres; we focused on skills, rolling out 50-plus champions across jobcentres up and down the country; our midlife guarantee ensured that those in that age group are confident in seeking work, understand their potential skills gaps and, critically, have looked closely at finances so that they know whether they can survive comfortably through to the end of their lives or perhaps would benefit from taking on some work. I will have more to say about the over-50s in time.