Universal Credit

Angela Watkinson Excerpts

Monday 7th July 2014 Commons Chamber

[Dame Angela Watkinson (Hornchurch and Upminster) (Con)]

The DWP is delivering the biggest welfare reforms for a generation, improving services for claimants and cutting costs concurrently. The objectives are: to control the costs of welfare; to get as many people as possible into or back to work; to strengthen incentives to work by making it pay; to support people who need welfare; and to be fair to the taxpayer. Benefits have been capped so that no household can receive more on out-of-work benefits than £26,000, which is what the average working family earns. That is still very generous, as many people in full-time employment do not earn as much as £26,000; we are talking about an equivalent of £500 a week for couples and those with children and £300 a week for single people. Housing benefit has also been capped so that benefit claimants face the same lifestyle decisions as other working people have to make—living where they can afford and limiting the size of their family to what they can afford.

The most radical reform is the introduction of universal credit, a new single benefit integrating income support, income-based jobseeker’s allowance, employment and support allowance, housing benefit, child tax credit and working tax credit. At the heart of this hugely ambitious UC programme is the intention to make work always pay. The scale and complexity of administering UC cannot be overestimated, and its introduction will necessarily be incremental. Under UC, 1.1 million households will keep more of their earnings when starting work of 10 hours per week; and 3.1 million households will have a higher entitlement, with 75% of those being the poorest households. Replacing that complex range of benefits with one new single benefit offering incentives to work and protection for those who cannot work is a significant challenge, and a policy of incremental expansion is the right way in which to introduce it.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the hon. Lady consider the fact that UC is not going to be a single benefit? Some recipients will be the equivalent of jobseeker’s allowance claimants now, and they will have one set of conditions and so on, and another set of claimants will be people who have been deemed to be unfit to work. Inherently, UC will not be a fully singular benefit.

[Dame Angela Watkinson]

As my hon. Friend—I will call her that as we are co-members of the Work and Pensions Committee—will know, there are component parts to UC and different claimants will be entitled to different components. As the Chair of the Committee has said, people’s lives are immensely complex and they change, which all adds to the complexity of running any benefits system. Let us consider housing benefit, for example. Family members move in and out of the home, which changes the entitlement, and people have fluctuating health conditions, which make their circumstances change. It will always be a complicated system, but the intention is to simplify it and to minimise the cost of administration.

The National Audit Office has said that the United Kingdom will benefit by £38 billion as a result of universal credit. This Government have grasped the nettle that the previous Government avoided. After 13 years of Labour, welfare spending increased by 60%, costing every household an extra £3,000. Housing benefit increased by 35%. Between 1997 and 2010, spending on tax credits increased by 340%. Long-term unemployment almost doubled between 2008 and 2010, from 396,000 to 783,000. The number of households where no member had ever worked doubled. The maximum housing benefit award reached an eye-watering £104,000 a year. Labour subsidised people to live in the private sector on rents that other ordinary working people could not afford.

[Sheila Gilmore]

Will the hon. Lady tell us how many claimants received the sum of money that she just mentioned? How many claims were in that region?

[Dame Angela Watkinson]

I am not for one moment giving the impression that that was typical of the average claim; of course it was not. The fact that there was no cap meant that it was possible, in certain circumstances, to rise to those really out-of-control levels.

The reforms to the welfare system will ensure that as many people as possible who are fit for work are helped into work, and only those people who are either unable to work for a whole complex range of reasons or who are on very low incomes are eligible for benefits. The scale of that task is gargantuan, but we have made good progress and we continue to progress towards improving the lives of the long-term unemployed and bringing the welfare budget under control for the benefit of the working people who pay for it through their taxes.

--- Later in debate ---

[Debbie Abrahams]

Language such as that about “shirkers” and “scroungers” has been used in the House by Ministers, and I reiterate that I find this deeply offensive.

If we consider welfare reforms in the round, we can see that there have been huge errors in how they have been delivered. If we consider them in the context of other reforms to the welfare state, we can see that we are experiencing a decimation of the welfare system that was set up after the second world war, with people who are sick and disabled through no fault of their own increasingly being denied access to a basic standard of living. In addition, the changes to access to health care and to justice are also affecting benefit claimants and because of the changes there has been a 20% reduction in the number of benefit claimants whose appeals are successful. We need to look at the situation in the round. I find it disappointing that a debate such as this is not seen in the context of everything else that is going on.

On the implementation of universal credit, I do not understand how the Secretary of State can still be in a job. Mistakes and errors have cost hundreds of millions of pounds of taxpayers’ money. That has been accompanied by cover-up and claims that the system has been reset.

I endorse all the positive comments that have been made about the Chair of the Select Committee, my hon. Friend the Member for Aberdeen South (Dame Anne Begg). She is a fantastic Chair, always allowing people to engage and giving them the opportunity to speak, but she has been shown such disrespect. If anybody has not seen how the Secretary of State behaved in that Select Committee meeting in February, I invite them to watch it. It was a disgrace.

[Dame Angela Watkinson]

I thank the hon. Lady for allowing me to intervene. I hope she will also allow that the Secretary of State was sorely provoked. If we are going to look at the behaviour of one person, we need to look at the behaviour of others who took part in that exchange.

[Debbie Abrahams]

I am sorry, I do not agree with that. The exchange is on record and people can watch it. It was clear that when the Chair of the Select Committee asked in February why we had not had the information that was available, the democratic role that Select Committees play in our parliamentary system was ignored. The response to the Select Committee’s report is a further justification for my comments. I am not alone in my views. There has been criticism from the Major Projects Authority and the National Audit Office.