1. If he will make an estimate of the potential cost to the public purse of disregarding the war pension scheme and the armed forces compensation scheme for the purpose of calculating pension credit entitlement.
I am glad that the hon. Member and I have had the chance to discuss this issue on a number of occasions, and, more importantly, that we had the chance to do so with his constituent Staff Sergeant Pauline Cole, who served our country and campaigned on behalf of other veterans. I know that she has sadly passed away since our meeting, so I wish to put on the record my condolences to her family—not least to her son Les, on whose behalf my hon. Friend the Member for Hemel Hempstead (David Taylor) has been in touch in recent days. As the hon. Member for Eastbourne (Josh Babarinde) is aware, exactly because of the service of our armed forces, £10 per week of any armed forces compensation scheme award is disregarded when calculating pension credit entitlement.
The Minister will remember that Pauline was a veteran who was awarded military compensation for injuries sustained in her service, but that led to her pension credit being cut from £77 a week to £10 a week, because military compensation is considered income by the Department for Work and Pensions. I have introduced Pauline’s law—the Armed Forces Compensation Scheme and War Pension Scheme (Report) Bill—to ask the DWP to correct that injustice and disregard military compensation in those calculations. Will the Minister work with me, and with Pauline’s sons, Les and Simon Haffenden, to conduct a review into the merits of disregarding that income in order to protect our veterans in future?
I recognise the powerful arguments that the hon. Member and Pauline made in our meeting. Our position today reflects the balance between recognising service injuries and being consistent across the welfare system. Pension credit is a means-tested benefit, the goal of which is to top up pensioners’ income to a guaranteed minimum level, so in order to ensure consistency, most forms of income—including those he refers to—are taken into account. However, as I said, there is a partial disregard in order to recognise veterans’ service, and the value of lump-sum payments received in respect of personal injury are fully disregarded.
Headline unemployment is below its average rate under the previous Government, and inactivity is falling as more people actively seek work. Some 381,000 more people have moved into work over the past year. However, there is a long-term challenge in youth unemployment, which we are responding to through the youth guarantee, more youth apprenticeship starts and other measures.
Youth unemployment is, in fact, spiking at nearly 5.3%, which is heartbreaking, particularly for young people who cannot get that all-important first job. The Government like to pretend that they are a cork in a storm-tossed sea and unable to do anything about this, but they could reconsider employer national insurance contributions and the disastrous Employment Rights Act 2025, which is driving up youth unemployment.
The hon. Member will be aware of the national insurance tax break under which no employer national insurance contributions are payable for workers under 21, unless they earn more than £50,000, which not too many workers under the age of 21 do.
The Minister answered a question about unemployment by giving data about employment, so let us focus on unemployment numbers. By how much has general unemployment increased since July 2024?
I did talk about unemployment. As I said, the unemployment figures are lower, on average, than when the hon. Gentleman’s party was in power. We are, of course, doing everything we can to help people into work, which is why I referred to the measures that we are taking, including the youth guarantee and increased apprenticeship starts. That is a much more active approach than the one carried out by the previous Government, who saw rising numbers of young people not in education, employment or training but did precisely nothing about it.
As I said, no employer national insurance contributions are payable for workers under the age of 21, and we believe that workers should be decently paid for the work they do. We are responding to the particular challenge of youth unemployment, which I acknowledge is there, and was there when the Conservative party was in power, with active measures such as the youth guarantee and more youth apprenticeship starts. I remind the House that youth apprenticeship starts fell by 40% while the Conservatives were in power.
I recently launched my Bognor Regis and Littlehampton business club. Many who joined are independent hospitality and leisure businesses, and their No.1 concern is how difficult it is to take on new staff under this Government. What assessment has the Department made of the impact of the Treasury’s new jobs tax, and the Government’s new employment regulations, on job creation in coastal constituencies such as mine? What steps is the Secretary of State taking to mitigate those effects?
I congratulate the business club—such organisations play a valuable role in our constituencies. The hon. Lady asks what measures we are taking, and I am grateful to the Chancellor for the extra funding made available in the Budget for the youth guarantee. That will gives hundreds of thousands more training and work experience places to young people and, importantly, will provide funding for the long-term youth unemployed to gain six months’ work, paid at the national minimum wage for 25 hours a week, so that young people get used to the discipline and duty of turning up, doing a job, and experiencing the sense of pride and purpose that comes with having a job.
Net migration has fallen to the lowest level since 2021, which will have a significant impact on our labour market and economy if we do not train and support unemployed people in the UK into jobs in key sectors. What steps is the Secretary of State taking to target back-to-work programmes, especially those for young people who are not in work, education or training, to fill skills shortages in crucial areas such as health and social care?