16:02 - The House divided: - Ayes: 273 / Noes: 308 - Question accordingly negatived.
Owen Smith
I found it interesting to learn, as part of the massive data dump before Christmas, that some of our largest banks such as J. P. Morgan and Merrill Lynch paid absolutely no corporation tax in the UK last year, in the same week when we learned that there would not be an investigation of the practices of our banks. Others can draw conclusions from that; I will stick to the subject at hand, which is universal credit.
I turn to transitional protection for those affected. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, the Government keep telling us that there will be transitional protection, and I will go so far as to concede that that is true—sort of—for some of the 350,000 people who will be on universal credit by April.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
Two hundred and fifty thousand.
Owen Smith
The Minister says it is 250,000, but 350,000 is the latest estimate that I have seen from the Office for Budget Responsibility. Perhaps it is wrong—it could be wrong about other things in future, as well. However, there will not be transitional protection for the 5.8 million people who will eventually be on universal credit. Even for the 350,000 who are currently on it or will be on it by March, there will not really be transitional protection if they undergo anything that constitutes what the Government call a “serious change of circumstances”. In that case, the maintenance of their in-work support at tax credit levels will stop. It will interest the House, especially given the Secretary of State’s interest in marriage as an institution, that getting married will constitute a serious change of circumstances. If someone who is on tax credits and enjoying transitional protection gets married, the Secretary of State for Work and Pensions will take that money away from them.
There will be no protection whatever for any of the millions of new claimants by 2020. The Secretary of State has implied on several occasions that there will be transitional protections. Indeed, when he intervened on me in the debate before Christmas—he was not leading for the Government in that debate—he said explicitly:
“We are transitionally protecting those who are moving on to universal credit.”—[Official Report, 7 December 2015; Vol. 603, c. 696.]
Unfortunately, the Minister for Welfare Reform, Lord Freud, had to correct him in the House of Lords, saying:
“It is not the same as transitional protection…it might be some more work or it might be upskilling”.—[Official Report, House of Lords, 14 December 2015; Vol. 767, c. 1910.]
In truth, the £69 million fund that the Secretary of State has prayed in aid as transitional funding will in no way make up for the £3.2 billion loss over this Parliament.
The truth came out in the infamous data dump of documents snuck out in Christmas week. Responding to criticism by the Government’s own Social Security Advisory Committee, Ministers had to admit that the only way to recoup the losses would be to work an additional three to four hours a week. That is right—the House heard me correctly. The Government are now saying to a single mother who is working full time on the national minimum wage and looking after her children in the evening and who will lose £3,000 that she has to get another job working an extra three or four hours a week—approximately 200 hours a year—to make sure that she is no worse off. Tell me, Mr Speaker—I cannot see it—how that single mother who has a child at home and who is working full time will, even on the new national minimum wage, be able to work an extra three to four hours a week or 200 hours a year. Is she meant to get a job after work in a bar, in a garage or serving coffee? Is she meant to get a job in addition to the full-time job she is doing during the day and in addition to looking after her children—for example, cleaning in the mornings—to earn an extra few quid?
What on earth is the incentive for that mother to undertake that extra work? I ask that because the other massively damaging effect of the cuts is that they fundamentally undermine and destroy the very premise of universal credit—to make work pay.
Owen Smith
I congratulate the hon. Gentleman on his equally deft selectivity. Dare I say that my point is that universal credit might have done all those things? If we had, as was originally envisaged, a 55% taper rate, or even if we had the current 65% taper rate, and if we had work allowances that were double what are now proposed, as was originally intended, universal credit would have made work pay and it would have been an incentive for people to work those extra hours. I have made that plain in my speech. However, with the cuts—the seven successive cuts that have been made since 2012—it will not deliver what was promised. The hon. Gentleman and the country are being sold a pup by the Secretary of State. It was not what was written on the tin when he first brandished it. Conservative Members need to understand that, because thousands of families in their respective constituencies will be affected by those cuts. Many of them will lose as much or more than they would have lost under the tax credit cuts. I say to all Tory Members: join us or tell me how these cuts are different from those they stood against last time around, other than that Tory Members might not quite have the time to realise that these cuts are being made before they next stand in an election. So far as I can see, that is the only plausible reason for their failure to follow their consciences this time and rail against the cuts.
Justin Tomlinson
I want to be clear on one point. The taper at the conception of the policy was 65%. There has been no cut and no change to that. It is important that the shadow Secretary of State does not make a mistake on that.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
You said it was cut.
Owen Smith
No I did not. I referred to the original document commissioned and chaired by the Secretary of State, in which it was recommended that there be a 55% taper rate. I might also refer to the social mobility commission, which is telling him to go into reverse. It argues that he needs to get back to a 55% taper rate.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
I join the shadow Secretary of State in wishing everybody a happy new year. I am sorry that I am not the person with whom he wished to have this exchange, but this is a real area of passion for me. My background, my school, my work and starting my own business mean that I understand opportunity, which all too often is not a given in society. The changes that have helped shape my journey into politics are integral to why we need to reform the welfare state. That is absolutely key.
Stephen Timms (East Ham) (Lab)
Given the background that the Minister has set out, he will well understand why it would have been a mistake to go ahead with the tax credit cuts that were U-turned before Christmas. Why then are the Government going ahead with precisely those cuts for people whose only mistake is to have the misfortune of receiving universal credit instead of tax credits?
Justin Tomlinson
That was a very early intervention and, to be fair, I need a little time to expand my argument, which will address those points. An element of patience is needed; I know that we all needed it last night with the late sitting and the reshuffle news. A key point about tax credits was that people argued that all the changes needed to be phased in, and I will set that out.
The welfare system we inherited was simply not working. It was not supporting people to get into work, to stay in work and to progress in work. People were left with unfulfilled potential, languishing on benefits, with little or no incentive to work or to progress in work, and opportunity was stifled. Opportunity should be a given; it should not be stifled.
The truth is that our welfare system had become distorted and complex, as we all know from our casework with residents. Too often, residents were missing out on the benefits they were entitled to because they could not navigate something so complex. All too often, the system firmly shut the door on opportunity, because it paid more to be on benefits than to be in work. We all know that, and the electorate—hard-working families—were quick to remind us of it.
Let me be clear that I say that with no disapproval for those who claim benefits. The system itself was to blame, which is why we undertook to reform it. Our aim was and continues to be to create a system that extends opportunity and ensures that work always pays, moving Britain from a low wage, high welfare, high tax society to a higher wage, lower welfare, lower tax society. It is a common-sense approach, creating a system that is fairer to the taxpayers who face an ever-increasing bill and delivering a welfare system that is sustainable for our country but that, crucially, protects the most vulnerable.
Let me remind the House that welfare spending on people in work rose from £6 billion in 1998 to almost £28 billion in 2010.
Barbara Keeley (Worsley and Eccles South) (Lab)
It might help the debate if the Minister and his colleagues on the Front Bench had an accurate definition of transitional protection. My hon. Friend the Member for Pontypridd (Owen Smith) made an excellent speech from the Front Bench outlining Labour’s calls for transitional protection, but it seems that that is something that Conservative Members just do not understand. We are having a similar debate tomorrow concerning the state pension equalisation for women. People should not lose out in achieving the principles the Minister is outlining. Why should certain families on universal credit lose out compared with families on tax credit and why will the Government not protect those people so that they do not lose out?
Justin Tomlinson
That will be set out in my speech and I will cover the transitional arrangements. I gently ask the hon. Lady where the transitional arrangements were when the 10p income tax rate was changed. We will be mindful of the advice that we take.
Mark Spencer (Sherwood) (Con)
Does the Minister have access to any figures that point to successes since 2010 in the number of people in employment and the number of people receiving benefits?
Justin Tomlinson
I thank my hon. Friend, who I know has worked incredibly hard in his constituency to help more people get into work. Across the country, more than 2 million more people are in work—record numbers—with record low numbers of people out of work.
Welfare spending overall went up by almost 60% in real terms, costing every household an extra £3,000 a year in 2010. What was the result of all that spending? The number of working people in poverty actually went up by around 20% and nearly one in five households had no one working. That was too often the norm.
Owen Smith
Will the Minister confirm that under his Government welfare spending has gone up more than it has under any Government, breaching £1 trillion under the previous Government, and £130 billion more than under the previous Labour Government?
Justin Tomlinson
In percentage terms, it is now back to 2008-09 levels. These reforms are key to that. Having an open blank chequebook is simply not an approach that we or hard-working taxpayers would take.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Everybody understands the rationale for having a welfare system that incentivises people to work, but I would like the Minister to explain how these proposals, which mean that people have to work longer hours for the same money, will achieve that purpose.
Justin Tomlinson
I will now try to make some progress so that I can set that out.
The old approach of taking money from people’s wages and recycling it back to them in handouts was not transforming lives, it was trapping them. Why? It did not provide the right incentives or support for people to get on and realise their ambitions. Our central approach is therefore about ensuring people are better off in work and better off working more.
Simon Hoare
The Minister is being a little too charitable to the Opposition. I might be being a bit cynical, but did not their policy seek to create a hinterland constituency of people wedded to welfare and therefore reliant on the Labour party? The voters saw through that in May and they are not going back to that again.
Justin Tomlinson
There is no need for my hon. Friend to feel that he is being cynical, as the statistics make that very clear.
Through universal credit people can support their families and have the dignity and independence that comes with having a job. We have already made huge progress through our reforms. Employment is at a record high, up by more than 2 million since 2010. Unemployment is down by more than 750,000 since 2010. The claimant count rate is at its lowest level since 1975. The number of people claiming the main out-of-work benefits has fallen by 1 million since 2010. Wages are rising—for 13 months consecutively—higher than inflation. I know that the shadow Secretary of State started talking about the 1920s—an easy mistake to make, perhaps, forgetting about inflation. That is why living standards are up. Business confidence is underpinning all this progress, which the Opposition are—
Several hon. Members rose—
Justin Tomlinson
I will take some more interventions, but let me make a little more progress because they might be on subjects that are coming up.
Against that backdrop, universal credit is removing the barriers to work that existed in the old system. The major reforms that are needed to our welfare system after 13 years of Labour’s culture of dependency are not without difficult choices, but universal credit is designed to provide certainty for claimants and provide the right incentives and support to find work and, crucially, progress in work. That has always been at the heart of universal credit, and it continues to be so. Universal credit policy remains unchanged since the summer Budget, despite attempts by the Opposition to suggest the contrary. The improved public finances allow us to reach the same goal of achieving a surplus while cutting less in the earlier years. We are smoothing the path to the same destination. That is a welcome move and the point I made in response to an earlier intervention.
I want to remind the House of the incentives that universal credit creates and the support it provides.
Justin Tomlinson
Shortly, shortly.
A single taper of 65% means that financial support is withdrawn at a consistent and predictable rate, helping claimants clearly to understand the advantages of work. Universal credit also extends financial incentives to people working fewer than 16 hours per week and removes the limit to the number of hours someone can work each week. Nobody can understand why we had a welfare system that created those artificial barriers.
Andrew Gwynne
I am grateful to the Minister for giving way. Although we all understand how universal credit is intended to work, does he not understand that there is an inbuilt disadvantage for those areas that were universal credit pilots, such as the Tameside part of my constituency? As universal credit is phased in across the country, these cuts will hit the areas that were the early entrants to the programme much harder than other parts of the country.
Justin Tomlinson
We are seeing that people on universal credit are more likely to progress into work and to secure more hours, and I will come on to that in more detail later.
Several hon. Members rose—
Stephen Timms
The Minister said in response to my earlier intervention that there were to be transitional arrangements, but the trouble is that people receiving universal credit will get the full cut in April this year. They are going to be clobbered.
Justin Tomlinson
I gently remind the right hon. Gentleman that I shall be going into those details later, so he needs to have just a little more patience.
Crucially and uniquely, universal credit stays with claimants when they enter work until their earnings reach a certain level or until they can support themselves. That gives them the confidence to start a job without having to go through the bureaucracy of changing their benefit claim. Universal credit is not just about IT or streamlining bureaucracy, as it is often portrayed. It is about people having a single point of contact with a work coach who provides personalised support, advice and guidance. This is where universal credit comes into its own, and this is the bit that I am really passionate about.
In life, we are all confident individuals and when we are faced with challenges it is a given that we can normally take them on, but that is not the case for everybody. We are now giving people a named personal contact to help them to deal with their individual case when they are navigating complicated benefit systems. That work coach will be by their side helping them to develop their role when they first get their foot in the door. They will not simply say, “We wish you all the best now you’ve got a job”. They will help them to make progress and develop their role. They will help them to seek and secure more hours, and to develop the skills and confidence to progress through the grades. In other words, universal credit will not only support people to move into a job; it will also help them to build a career. It will break the cycle of dependency and create opportunities.
Catherine West (Hornsey and Wood Green) (Lab)
Does the Minister not accept that we are really talking about people who are doing the hours but whose rate of pay is very low? Is not this really about productivity? The fact is that the Government are not creating higher level jobs. We are far too dependent on the service sector, which essentially involves low-paid jobs rather than jobs that offer a higher rate of pay for the hours worked.
Justin Tomlinson
Three quarters of new jobs being created are at managerial level, and the majority are full-time jobs. I shall go into more detail about what we are doing in terms of money.
Helen Whately (Faversham and Mid Kent) (Con)
My hon. Friend has been talking about the benefits of universal credit. I have spoken to two jobcentres that serve my constituents and that are piloting universal credit, and I have heard very good feedback, both from the job coaches and from the jobseekers themselves, who say that it is giving them more flexibility to work. Please will my hon. Friend confirm that the roll-out will continue, because those jobcentres want to be able to give more jobseekers the opportunity to be on universal credit?
Justin Tomlinson
My hon. Friend highlights the importance of that personalised support, which people find absolutely vital. We have seen this in our casework, in our experience of life and through friends who have navigated through the system. My hon. Friend has taken the time to visit her jobcentres, and I would gently encourage the shadow Secretary of State to go and visit one of the universal credit sites and to see it at first hand.
Owen Smith
I spoke to one of the people piloting universal credit just two weeks ago. Is the Minister seriously telling the single mother I mentioned earlier, who is working full time on the new national minimum wage, that she should not worry about the £3,000 drop in her income that will result from these cuts? Is he saying that she should not worry because she will have a personal work coach who will encourage her and give her greater confidence to get another job, maybe in management? Is he seriously saying that to the country?
Justin Tomlinson
I will extend my invitation further: I will join the hon. Gentleman if he wishes to come and see this work in action. If he is worried about going on his own, I will in effect be his work coach. We have talked about examples. Let us talk about a working lone parent with two children who is doing 35 hours on the national living wage. They will be £330 better off. We could continue to trade examples, but that would be to assume that this is a static analysis. I will address that point later.
The evidence is clear: universal credit is working. Independently reviewed statistics published at the end of last year show that under universal credit people spend 50% more time looking for work, are 8 percentage points more likely to have been in work, and when in work, they earn more and seek more hours. So, universal credit is supporting people whether they move into or out of work, and focusing on getting people not just into work but into sustainable employment where earnings increase and the number of hours they work rises.
Chris Stephens
The Public and Commercial Services Union has real concerns about the cuts to the work allowance, which will affect the Government’s own staff. What assessment has been made of the effect of those cuts on the employees in the Department for Work and Pensions?
Justin Tomlinson
As I shall explain, this is not a static analysis.
I want to focus on how we are going to support people. People will benefit from the improved support. For those directly affected by the changes to work allowances, we have been careful to put further measures in place. The affected claimants will benefit not only from additional work coach support but from access to funding through the flexible support fund. This will help people to retain work and to increase their earnings through training, travel and care, and we will support people to access those things. In the longer term, we are ensuring protection for claimants who are moved from legacy benefits to universal credit. We have always been clear that there will be no cash losers as a result of the managed migration of claimants from one system to another, as long as their circumstances remain the same.
Owen Smith
This will be the last time I intervene on the Minister, I promise. Is he seriously telling the House that the £69 million flexible support fund that he has just prayed in aid once again will in any way make up for the £3.2 billion loss to working families?
Justin Tomlinson
The shadow Secretary of State is mis-matching the two parts. The people who are going across will continue to have their cash protected. The £69 million fund will provide ongoing support to help people to navigate through the process.
Melanie Onn (Great Grimsby) (Lab)
I want to return to the Minister’s point about work coaches. The mapping exercise that was undertaken in my constituency and across the borough of North East Lincolnshire was out by 150%, and the local authorities there cannot meet the needs of the work coaches who are needed to support people on universal credit. That task has now been passed on to the citizens advice bureau, which also cannot manage the load because the figures that it was initially given were incorrect.
Justin Tomlinson
This is actually delivered through the jobcentres and the universal service, so I think we will have to discuss that a bit further.
Figures have been bandied about, and I want to make it clear that they were wildly inaccurate. They were based on a fundamental misunderstanding of universal credit, which is why I am so keen to arrange a visit for the hon. Member for Pontypridd (Owen Smith). The vast majority of those on the universal credit caseload will not lose out as a result of the changes. That is because the measure affects only those people who are in work, most of whom would have received nothing under tax credits. I have not seen the Opposition campaigning on this issue before. Unlike tax credits, universal credit is a dynamic benefit.
Justin Tomlinson
The hon. Member for Pontypridd has had his turn. I give way to the right hon. Gentleman.
Stephen Timms
I think we have now got to the appropriate point in the Minister’s speech. Does he acknowledge that the 50,000-plus working people who are today receiving universal credit will see their benefits sharply cut in April?
Justin Tomlinson
I will come on to those specific people—[Interruption.] In the overall numbers, it is the vast majority—[Interruption.] I am going to make some progress.
We have to see the bigger picture. A lot of the analysis that has gone on is static. Even the Institute for Fiscal Studies, which I know a lot of hon. Members will refer to, acknowledges that it is a static analysis. Universal credit is not a stand-alone measure. It is part of our wider, dynamic package of reforms to support families in work and to make sure work pays. We are raising the personal allowance to £11,000 for the next tax year, saving the typical taxpayer over £900 a year, and we have pledged to raise it to £12,500 by the end of this Parliament. The national living wage will come into effect from April. That will directly benefit 2.75 million people and it is forecast to reach over £9 an hour by 2020. That might upset Opposition Members who campaigned for £8 an hour, but we felt that that did not go far enough.
Carolyn Harris (Swansea East) (Lab)
The House of Commons Library has given me some figures; I wonder whether the Minister will say that they are wrong. They show that a single parent working full time on the minimum wage will be nearly £3,000 a year worse off than they would have been on tax credits. I would appreciate some clarification on this from the Minister.
Justin Tomlinson
I thank the hon. Lady for her question. I worked closely with her on our commitment to halving the disability employment gap, and I have a lot of respect for the work she does. In this case, the person—again, presuming it is a static analysis and that they are already in—will be cash protected as they are transferred to universal credit, so they will not be cash worse-off.
We have rising wages and near zero inflation. We have had 13 months—[Interruption.] We have strong economic growth, delivering record jobs and creating opportunities for people to get into work and to increase their hours. We have simplified the benefits system, reducing the potential for claimants to miss out on money to which they are entitled and, crucially, allowing them the time to focus on actually finding work, rather than on navigating the complex, chaotic system. We have already seen from the independent investigation that we are talking about 50% more time. We also have work coaches to support people in work, which is vital.
Several hon. Members rose—
Justin Tomlinson
I will make a bit more progress and then take a few more interventions.
Finally, and importantly, we are increasing the childcare offering. Universal credit currently covers up to 70% of eligible childcare costs, but from April we will increase that to 85%. That will make a huge difference to people’s lives, with the increase worth up to £1,368 per year for every child. We are also doubling free childcare to 30 hours a week for working parents of three and four-year-olds, which is worth up to £5,000 per child per year to working parents. Tax-free childcare from early 2017 will give working parents who are not in receipt of universal credit or tax credits up to another £2,000 per child per year, or up to £4,000 for a disabled child. All those measures are designed to help families keep more of the money they earn and support them in work. Therefore, our combined package of measures will make a real difference to real people’s lives.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
I wish briefly to divert the Minister’s attention to homelessness and, in particular, its rise in London. A network of charities have said that the rise is a result of not only the chronic housing shortage, but cuts to welfare reform and social security, particularly universal credit. I do not know now whether the Minister is aware that last year the level of homelessness rose to a point where 7,500 people were sleeping rough on the streets of London. Does he recognise that universal credit will exacerbate that problem? Can he say how the rolling out—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. An intervention has to be very short, and I think the Minister has got the gist of this one.
Justin Tomlinson
That is why it is key that this Government are committed to building and delivering more affordable housing, particularly in London. I welcome the measures that the Chancellor set out to make that happen. [Interruption.] The hon. Member for Birmingham, Yardley (Jess Phillips) may laugh, but we saw record low house building under the last Labour Government, robbing people again of opportunity.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Has the Minister made an assessment of how many people on universal credit will be able to afford even a starter home in London?
Justin Tomlinson
That shows why we have to create opportunities, so that people can get into work, increase their hours—[Interruption.] Again, the hon. Member for Birmingham, Yardley does not like creating opportunity. We can all play top trumps on trading backgrounds, but we have to create those opportunities for people, regardless of the challenges they face. My party values the prospect of the potential for people to have home ownership.
Alex Chalk (Cheltenham) (Con)
Does the Minister agree that under Labour the welfare system spiralled completely out of control? Crucially, in the words of the former Chancellor Alistair Darling, it ended up
“subsidising lower wages in a way that was never intended”.
Will these reforms not address that?
Justin Tomlinson
I thank my hon. Friend for raising that point. Not only did we see that under the last Labour Government we were talking about £3,000 per hard-working family, but the decision to reverse all these dynamic changes will have to be paid for—we cannot magically print money. I know that promising that would help in a potential future reshuffle, but back in the real world it will mean painful, expensive tax rises for hard-working people.
Universal credit is a significant welfare reform that is transforming lives. At its heart, this is about putting work first and ensuring everyone can realise their ambitions and improve their quality of life. It is part of our wider commitment to return welfare spending to a sustainable level and deliver fairness to the taxpayer. That will be delivered through reform, support and, crucially, creating opportunities.
Jess Phillips (Birmingham, Yardley) (Lab)
Obviously I echo the sentiments of all my hon. Friends about how these changes will affect working families throughout the country. I am especially concerned about the effects on single parents. The changes to universal credit are complex and difficult to decipher for people who are not yet receiving the benefit, so there is understandably much less buzz than there was for the tax credit changes, but make no mistake, the same uproar will come.
In the debate on tax credits, I spoke of the 24,000 children in Birmingham, Yardley who would be worse off because of those changes. By contrast, on the same date I could find only four properties in my constituency that would benefit from the inheritance tax changes. Thanks to the fact that universal credit has been record-breakingly slow, by April 2016 the changes will potentially affect only 760 households in my constituency. That is still 756 more families hit hard than the number that will benefit from the inheritance tax changes. I think it safe to say that, perhaps other than for those four families—and let us not forget that they have to be dead first—the residents in my constituency can see the same old Tory Government protecting and rewarding the richest.
In honour of the Tories keeping to their type, I shall do the same and raise issues of domestic and sexual violence victims. I wish to pick up two problems with the whole universal credit experiment. The first is that it all gets paid to one person in a household. I have met countless women who have kept small bits of money, saved up and used the funds to help set them and their children free. I have met too many women for whom financial control was the worst and most limiting part of their abuse. Walking away from violence and threat is never easy. It is nearly impossible if you have nothing.
I recognise that the DWP has bowed to pressure and accepted that split payments are available in cases of domestic violence when they are reported to the benefits adviser or the work person we have been talking about today—but there is a real problem with that scheme. It is the same problem I have with the two-child policy coming down the line for the very same families when considering children born of rape.
The Government expect women who are terrified, who have been told every day that they are nothing and no one, to rock up at the local jobcentre and tell the staff that they have been raped or that their husband beats and controls them—“Please, sir, can we have split payments?” What do we think their violent partners are going to do when they find half of their funds gone? I could be wrong and I am willing to be proven so. I have tabled some parliamentary questions about how many people have asked for split payments in the pilot areas. Perhaps all my years of experience are wrong and people in domestic violence relationships are skipping into neighbourhood offices, happy to disclose their worst fears.
Justin Tomlinson
I understand the power of the important points that the hon. Lady is raising, but one subtle change is that for the first time such women will have a named contact, who will get to know and understand them, and if they can spot signs that have been highlighted, they will be able to signpost support. That might encourage people for the first time to have that conversation. I know it is difficult, but this provides another opportunity for people to get the support that they absolutely need.
Jess Phillips
I shall respond to the Minister’s point by saying what I was about to say anyway. I hope that these issues will be considered as the roll-out continues, as he has said that they will. When domestic violence victims had to prove to legal aid services in cases of family law that they were victims, they initially had to provide proof from either the police or a doctor, and some were charged for the pleasure of producing a letter proving that they were indeed victims. Demanding that victims of domestic violence skip around telling anyone who will listen that they are victims before the Government will recognise them as such is inhumane.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I should like to thank all those who have spoken in today’s debate. On a Labour Opposition day, however, it is rather regrettable to find more Scottish National party Members than Labour Members present for most of the debate. Labour Members have demonstrated a poor showing on their Opposition day.
Let me make one thing absolutely clear at the outset: universal credit is transforming people’s lives. After years of Labour’s dependency culture, this Government are continuing to reform the welfare system and the labour market.
It is worth reminding the House of the broken welfare system and labour market that were left to us, a legacy that hon. Members have recognised during today’s debate: nearly one in five households had nobody in them working; the number of households where nobody had ever worked had nearly doubled; 1.4 million people had been on benefits for most of the previous decade; and close to half of all households in the social rented sector had nobody in work.
Several hon. Members rose—
Mr Vara
I will not give way, as I have limited time available and I am keen to address as many of the points raised as possible. We have turned that situation around. Our reforms, the centrepiece of which is universal credit, are working and are getting people back into work.
Stephen Timms
The Government are not going ahead with the tax credit cuts, so why is it right to go ahead with precisely the same cuts for the minority of people who have the misfortune to be claiming not tax credits but universal credit?
Mr Vara
It is important that the right hon. Gentleman and others take into account the need to consider the broader perspective: the raising of personal allowances; the introduction of the new living wage; the doubling of free childcare to 30 hours; tax-free childcare from early 2017; and, let us not forget, the fact that every time we fill up our tank with petrol there is a saving of £10 because of the freezing of the fuel duty. It is important to consider everything in a broader perspective, not the narrow perspective that we have heard from so many Opposition Members.
A number of speeches have been made today and, unfortunately, time simply does not allow me to address them all. I shall simply say that the right hon. Gentleman made a passionate contribution. I have huge respect for him and I am sorry that he is no longer on his party’s Front Bench. May I also pay tribute to my hon. Friend the Member for Hertsmere (Oliver Dowden), who made a learned contribution, clearly setting out the reasons why Labour’s proposals are simply not sustainable? My hon. Friend the Member for Lewes (Maria Caulfield) made a powerful contribution, telling us of her experiences growing up, which had the whole House in agreement with her.
This is an important subject and we need to recognise that the IFS has pointed out that no one on existing benefits or tax credits whose circumstances remain the same will lose out in cash terms as a direct result of being moved on to universal credit. These claimants will get transitional protection to avoid cash loss at the point of change. It is important to note that the only people who will be directly affected by the change to work allowances in April will be those already in work, the majority of whom will be single claimants without dependants. [Interruption.] The shadow Work and Pensions Secretary chunters away, but we have checked the Hansard record and found that he was wrong and we were right. Conservative Members await a withdrawal of his earlier comments, which we debated. We have checked Hansard and he should do likewise. For those people who are affected, we have been careful to put measures in place to ensure that they are fully supported. As well as the additional work coach support that these claimants will receive, we have increased the amount available through the flexible support fund to help people progress in work and increase their earnings.
Universal credit is a major reform of welfare that is designed to make sure that work always pays. Through the removal of the requirement to work 16 hours per week that exists in the tax credits system, people will see a financial benefit from every extra hour they work. The universal credit taper means that financial support is withdrawn at a consistent and predictable rate, helping claimants to understand clearly the advantages of work. The IFS has said that anyone being moved on to universal credit from tax credits will be protected—they will not be cash losers. Opposition Members need to take that on board—that comes from the IFS.
Mr Vara
I will not give way.
It is also worth noting that universal credit is working: for every 100 jobseeker’s allowance claimants who find work, there are 113 universal credit claimants who do so. It is important to look at the bigger picture. This Government are moving Britain to a higher wage, lower tax and lower welfare society. Universal credit is fundamentally different to the legacy systems it replaces, and it must be recognised that there is no meaningful way of comparing an unreformed tax credit system with universal credit.
As my hon. Friend the Under-Secretary of State for Disabled People highlighted at the start of the debate, Labour’s spending on in-work benefits went up by £22 billion, but the number of working people in poverty actually rose. The system we inherited from Labour was one where, for millions of people, being on welfare was a more attractive option than working or taking on more work.
Under Labour, there was a complete abdication of responsibility for managing working taxpayers’ money. Labour’s shambolic welfare policies led to a colossal welfare budget that was simply out of control, and the party has not changed. Page 47 of the 2015 Labour party manifesto said:
“To guarantee a decent social security system for the next generation, we need to keep costs under control.”
Yet when the shadow Work and Pensions Secretary was on the “Daily Politics” programme in December he said:
“We are campaigning for a…full reversal of universal credit...we will put that money back in if we were in power…I’m crystal clear about that.”
The presenter Jo Coburn challenged him—she had to challenge him three times. She said:
“Where will you get the money? The bill would go up under your proposal.”
The shadow Secretary’s reply was:
“Had I been Chancellor…I would have taken the extra £27 billion tax receipts.”
There we have it: the party that wants to continue taxing. That is why it is the party of welfare—it is the welfare party, not the labour party.
Welfare is much more than simply giving money to people and writing blank cheques; it is about removing the barriers that prevent people from finding work and progressing in work. It is about giving people the support they need to stand on their own two feet and live independently of the state. It is about creating the right incentives for people so that they can make the right choices for themselves and their families. That is what universal credit does, and it is working. It is incentivising work, renewing personal responsibility, and rewarding positive choices. Under this Government—this one nation Government—we will continue to deliver for all our citizens.
Question put.