Debbie Abrahams

This was a positive, progressive Budget with fairness at its heart. These fiscal decisions will benefit most people, but particularly those who have been really struggling with the cost of living crisis over recent years. Those with the broadest shoulders have been asked to do their fair share of the heavy lifting, with all but the top 10% income households seeing the proportion of their net income increase by 2028-29. Fairer policies benefit us all, not just the recipients. As the International Monetary Fund has shown, reducing income inequality stimulates growth, but we also know that fairer societies improve educational attainment, social mobility, trust between communities, health status and much more. Collectively, these tax reforms are forecast to raise over £8 billion in 2029-30 from wealth and the wealthy. The total package of tax changes has allowed the Chancellor to make some incredibly important decisions to help with the cost of living crisis and boost living standards, including increasing the minimum wage and living wage, increasing the state pension, freezing rail fares and fuel duty, and cutting £150 from next year’s energy bills. I particularly want to talk about the abolition of the so-called two child limit. It is now believed that this measure drive the increase in child poverty from 3.6 million in 2010 to 4.5 million in 2024, causing a multitude of poverty-related harms, including an increase in the prevalence of young people not in education, employment or training. A person is five times more likely to be NEET if they experience childhood poverty, and more than half of the current NEET population belong to this cohort. Getting rid of this harmful, damaging policy will lift 350,000 children out of poverty almost immediately, and another 150,000 will be prevented from being drawn into poverty over the life of this Parliament. I commend the former Work and Pensions Secretary, my right hon. Friend the Member for Leicester West (Liz Kendall), and the former Employment Minister, my hon. Friend the Member for Birkenhead (Alison McGovern), for bringing forward spending on employment support. I know that the current Employment Minister is keen to continue that work and escalate it. Analysis commissioned by the Work and Pensions Committee showed that supportive employment programmes such as the new deal for young people and the new deal for disabled people introduced by the former Labour Government in the noughties led to between 5% and 11% of that group getting into sustained employment for a minimum of three years. Applying this approach to the current group of unemployed and economically inactive people would ensure that schemes such as Connect to Work, WorkWell, and Individual Placement and Support, could increase employment by at least 5%, generating savings to the Exchequer of £20 billion by the end of this Parliament.