Government plans to tackle unemployment run counter to a rise in employers’ national insurance contributions, MPs have warned.
Christine Jardine, the Liberal Democrats’ women and equalities spokeswoman, told the Commons she saw a “contraction” in employment policies, while Conservative shadow work and pensions secretary Helen Whately accused Liz Kendall of having “dodged tough decisions”.
Ms Kendall, the Work and Pensions Secretary, unveiled a threefold plan on Tuesday as she warned: “If you can work, you must work.”
Introducing the Get Britain Working White Paper, the minister announced her department would bring together jobcentres and England’s National Careers Service, support a Youth Guarantee led by mayors and local authorities with support for roles in the culture and sports sectors, and launch Get Britain Working trailblazers to link work, health and skills support at a local level.
But Ms Jardine warned: “Many of us see a contradiction in this policy and the national insurance changes, because a major employer in my constituency of Edinburgh West tells me it’s going to cost them a quarter of a million pounds extra a year, and they won’t be taking on seasonal workers because they can’t afford it.”
In October’s Budget, Chancellor Rachel Reeves unveiled an increase in employers’ national insurance contributions, which they pay on top of workers’ earnings, by 1.2 percentage points – to 15% – from April 2025.
Ms Jardine asked: “How does that damaging policy for business go alongside trying to encourage more people back out to work?”
Ms Kendall replied: “Of course, they face these pressures, but I think many businesses also understand you have to … actually have a Government that is looking at the fundamentals, and we did face a problem with the public finances.”
Richard Holden, the Conservative shadow paymaster general, pointed to Office for Budget Responsibility (OBR) forecasts that national insurance changes could lead to the equivalent of around 50,000 average-hour jobs being lost by 2029/30, adding: “Where are the people that she’s hoping to get off benefits and into work going to find employment?”
The Work and Pensions Secretary said businesses are “thinking about the longer term, the vacancies, how on Earth they get the skills they need that are particular to their own business in that area”.
Ms Whately told MPs: “Economic inactivity is a problem for our economy and for each and every individual who risks being written off to a life on benefits.
“Knowing that, I am disappointed in the substance of what she is announcing today, because far from matching her rhetoric, this appears to be little more than a pot of money for local councils, some disparaging language about the work of jobcentres and a consultation which will be launched in the spring.
“Given that they’ve had 14 years to prepare for this moment, is that it?
“Where are the reforms to benefits that would actually make material savings to the taxpayer, like the £12 billion we committed to save in our manifesto? Where are the reforms to fit notes, which we had handed over all ready to go? Where is her plan for reforming the workplace capability assessment?”
She added: “The fact is the Secretary of State has dodged tough decisions. Every day she kicks the can down the road costs the taxpayer millions of pounds, at this rate rising to £100 billion on sickness benefits by the end of this parliament.”
Ms Kendall responded: “The only people who dodged difficult decisions on welfare were the party opposite.”
Work and Pensions Secretary Liz Kendall unveiled the plan on Tuesday (Jacob King/PA)
The Work and Pensions Secretary had earlier said 2.8 million people are out of work due to long-term sickness, and almost a million young people are not in education, employment or training, which is “far worse in parts of the country – in the Midlands and the North – that were deindustrialised in the 80s and 90s, the very same places that have lower life expectancy and chronic poor health, areas which the party opposite (the Conservatives) repeatedly promised to level up, but repeatedly failed to deliver”.
On disabilities and sickness, the SNP’s Kirsty Blackman (Aberdeen North) urged Ms Kendall to consider how disabled people and benefits claimants with ill health can be “round the table”.
Nadia Whittome, Labour MP for Nottingham East, asked the minister to confirm that “no-one will be sanctioned for non-attendance at medical appointments”.
Ms Kendall replied: “Sanctioning people because they go to the NHS to get themselves as fit and healthy as possible is completely the wrong approach.
“I understand why disabled people, when they hear talk about helping people into work or reforms to sickness and disability benefits, why they’re worried because of what happened over the last 14 years – we are determined to break down those barriers to work.
“I think many disabled people, given the right help and support and the right flexibility to work, could work and want to work.”