Chris Grayling is Lord Chancellor, Secretary of State for Justice, and MP for Epsom and Ewell.
There can be few things tougher than losing your job. It’s happened to me twice. Suddenly the certainty of going out to work each day, and the pay cheque arriving at the end of the month, disappears. You wonder what if anything is going to happen to you now.
Years later, in my two and a half years as Employment Minister, easily the most anxious times were when my officials and I waited for the arrival of the monthly email telling us the latest unemployment figures. Every new set of figures meant potentially another group of people going through that very personal challenge for them and their families.
Sometimes the figures were good, sometimes the movement was in the wrong direction. But as the months went past, and the forecasts from left-wing economists, the trade unions and the Labour Party became bleaker and bleaker, it became evident that things were not heading towards the kind of jobs crisis they were forecasting. In fact, just the opposite. Things started to get better. And they have kept on getting better.
Britain has been through a very difficult seven years, from which we are only now emerging. In 2007 the Great Recession saw £112 billion wiped off the British economy – that was almost £3,000 pound for every household. This was the longest and deepest recession in our post-war history, so it’s no surprise that it has taken time for the British economy to recover.
But what was remarkable about this downturn however was the resilience of the British labour market. In past recessions we have seen unemployment soar, with hardworking people paying the ultimate price for a failing economy – losing their jobs and their livelihoods. Many people predicted this would happen in the wake of the Great Recession. Ed Miliband told us cuts would lead to ‘the disappearance of a million jobs’ and Ed Balls said it was a ‘fantasy’ that the private sector could create enough jobs to compensate for losses in the public sector.
But we believed in the British people. Through hard work and steely determination, British workers have weathered the worst of the recession and proved these doom-mongers wrong. There are now 1.8 million more people in work than four years ago, and 372,000 fewer people without a job. While there is still more to do this is a remarkable achievement, and one businesses up and down the country should be congratulated for.
But these hard-won gains could be all too easily squandered. That’s why we all should be alarmed by the news that Labour are – once again – planning to put up taxes on jobs to pay for more inefficient and ineffective spending.
Increasing National Insurance Contributions was Labour’s favourite stealth tax when they were in power last time: both Ed Balls and Ed Miliband were advisers in the Treasury at the time of the National Insurance hike of 2002. It’s even been reported that Miliband described this tax hike on work as the ‘proudest’ moment of his career.
So proud, in fact, that he used his power as the manifesto author in 2010 to put another increase in National Insurance at the heart of Labour’s policy agenda – making it harder for businesses to take on new people just as the Government should have been doing all it could to support job creation. One of this government’s first acts was to scrap the most damaging aspects of that rise, and subsequently cut businesses’ National Insurance bills by up to £2,000.
But just as the economy moves from rescue to recovery, we’ve learnt that Labour still hasn’t learnt its lesson and wants to put all this at risk again. Members of the Shadow Cabinet have admitted that Labour are looking at putting up the jobs tax by one per cent. One Labour MP has even admitted to discussing it with Ed Balls and Labour’s policy chief, who is apparently ‘happy’ with the idea.
If this were to go ahead it would see a £4.7 billion tax rise on employers – that’s an average tax rise of £3,600 for every business or £165 for every employee in Britain. It’s staggering that Labour are considering a policy like this just as the sacrifices of the British people are beginning to pay dividends.
Nothing would make it more likely that employers would slow down or stop hiring again. It’s simple maths: if it costs more to hire someone, you hire fewer people and unemployment moves in the wrong direction.
We cannot let Miliband and Balls’ addiction to more spending and higher taxes put at risk all that Britain has achieved. There are no quick fixes or easy ways to shape a stronger economy. We need to stick with this Government’s long-term economic plan to build a healthier economy, and secure a brighter and better future for Britain. We cannot afford to go back to the failed Labour ways of tax, spend and borrow, and their crazy idea of introducing a tax on jobs.