Universal Credit

Lord Macpherson of Earl's Court Excerpts

Wednesday 21st December 2016 Lords Chamber

[Lord Macpherson of Earl’s Court (CB) (Maiden Speech)]

My Lords, I feel very fortunate and indeed honoured to be speaking for the first time in your Lordships’ House. I am grateful for the very warm welcome I have received in recent weeks, my Treasury origins notwithstanding. I would like to thank the extraordinarily helpful staff of the House, who have initiated me into its more arcane mysteries. I would also like to thank my supporters, the noble Lord, Lord Layard, and my noble friend Lord Stern of Brentford. Both are internationally renowned economists. Both have worked on labour market and poverty issues, and I have learned a great deal from them.

I recently left the Treasury after 31 years. One of my first posts there was on social security at the time of the Fowler reforms, whose eponymous author is now Lord Speaker. I worked on his admirable plan to replace family income supplement with family credit. Later, I worked for Ken Clarke on seeking to extend family credit, and I had the great privilege of working for Gordon Brown, leading the work on the new tax credits at the turn of the century, when I also worked with the noble Baroness, Lady Sherlock, among others. I was also Permanent Secretary when Mr Duncan Smith announced his plans for universal credit in 2010.

I see successive reforms to income-related benefits as very much an evolutionary continuum, informed by evidence and experience. And although each change has rightly been subject to vigorous debate, not least on what constitutes a fair and affordable level of benefit, each reform, in its own way, has been successful. Our country has one of the most dynamic and flexible labour markets in the developed world, and we should celebrate that.

Of course, it is too early to tell whether universal credit will achieve its objectives, but I welcome the fact that, as a concept, it has cross-party support, and that digital technology at least in principle is making options possible which were previously unthinkable.

I hope to come back to the issues raised by universal credit in future debates, not least to respond to the challenge of the noble Lord, Lord Kirkwood: how to finance improvements to universal credit. For my part, I would advocate spending a bit more on income-related benefits for working-age people, perhaps at the expense of the very large amounts that are now going to pensioners. However, for the moment, I shall confine myself to one observation.

The delivery of universal credit has been a long and expensive journey, and it is not over yet. When the dust has settled, I hope, like my noble friend Lord Stevens, that we can learn some of the lessons. I fear that the original timetable was overly aggressive; that capacity, at least in the early years, was inadequate; and that, with hindsight, the department and the Treasury could have worked better together.

In the meanwhile, the nation should be hugely grateful to the noble Lord, Lord Freud, who has done a fantastic job. He has devoted six years of his life to the cause, and that is public service indeed.