Universal Credit

Debate between Stephanie Peacock and Angela Rayner

Tuesday 13th March 2018 Commons Chamber

[Angela Rayner]

Thank you, Madam Deputy Speaker.

The Government are phasing out childcare vouchers as they transition to a policy of tax-free childcare, but that policy is simply not working. The introduction of tax-free childcare has been so shambolic that the Government fell 90% short of their take-up target, and spending was less than 5% of their projection. Instead, nearly £1 billion that was earmarked for childcare was returned to the Treasury. Yet the Government are still pushing ahead with their plan to phase out childcare vouchers, which will leave families hundreds of pounds worse off and directly transfer Government support to those who are better off.

[Stephanie Peacock (Barnsley East) (Lab)]

My hon. Friend may have seen written answers I have received from the Government showing that 10,000 of their own officials still use childcare vouchers, and the same number are signed up to a Ministry of Defence scheme. Does she agree that if Ministers will not protect their own officials, they should at least stand up for our armed forces?

[Angela Rayner]

I absolutely agree with my hon. Friend. The armed forces do a magnificent job for us and it is an absolute scandal that they will also be caught up in this and made worse off as a result of these measures.

Members from all parties will know that hundreds of their constituents have written letters and signed petitions to express their concerns about these policy changes, yet the Government continue to push ahead with them, and have tried to do so by the stroke of a ministerial pen. The only legislation that has come to this House is the regulations before us, which complete the phase-out for those who change employers after April. We have therefore called for a vote on the regulations, and we want to make it clear that if the House passes our motion, we are sending a clear message to the Government that it is time to think again and keep childcare vouchers available.

The regulations on universal credit apply new sanctions to those who are currently protected and cut the time period that claimants have to provide evidence. Despite the Government’s rhetoric on people with disabilities and mental health needs, it will be them who suffer. Charities have urged the Government to reconsider, with Mind saying that the regulations will

“make the system harder to navigate at a time when people are unwell and most in need of support.”

Why is the Secretary of State for Work and Pensions ignoring those voices and making the system even harder for the very people the Government claim they want to support?

Self-employed people are the absolute bedrock of our economy. The Chancellor spoke of start-ups and new businesses in his statement earlier, but this legislation will make things harder for self-employed people. The TUC warns that a short start-up period for the minimum income floor could close businesses with the potential to become sustainable and profitable. The rules could discourage people from self-employment entirely. So, again, why is the Secretary of State making things so much harder for the people her Government claim to support? We know that the self-employed are more likely to be on lower earnings than employees, yet in its recent welfare trends report, the Office for Budget Responsibility confirmed that the low-paid self-employed face a much tougher benefits system under universal credit. On average, those affected are set to lose around £3,000, so the savings seem to be coming from the pockets of the low-paid self-employed. Why is the Secretary of State pursuing a policy that will make so many self-employed people much worse off?

The regulations make the universal credit system even more complicated, with the introduction of the surplus earnings rule. As universal credit is based on the previous month’s income, a self-employed claimant could get substantially less universal credit than an employed claimant earning a similar annual income. Successive Secretaries of State for Work and Pensions have said that universal credit will be simpler and will make work pay, but once again they are proposing the opposite.

All these statutory instruments share a common theme: they are about the support that we offer to families and their children, particularly those already struggling to get by. I remember when the Prime Minister said that the mission of her Government was the acronym JAMs—I am starting to think that really it stood for “Just about May’s survival”. It was meant to be about those who are just about managing, yet under this Government, there will be JAMs today and there will still be JAMs tomorrow, because instead of helping them to get on and get by, the Government are making their lives ever harder. Today is a chance to say that enough is enough. I commend the motions to the House.