Universal Credit

Baroness Stroud Excerpts

Wednesday 21st December 2016 Lords Chamber

[Baroness Stroud (Con)]

It is an honour for me to follow the noble Lord, Lord Macpherson. I congratulate him on his maiden speech and welcome him to this House. His contribution to the topic we discuss today is huge. As he said, he was PPS to Gordon Brown as he created the tax credit system, and then Permanent Secretary to George Osborne throughout the introduction of universal credit. The care that he gave to steering the Treasury through the financial crisis at the same time as undertaking the biggest reform of welfare in a generation is highly commendable, and we look forward to seeing his wisdom and experience, benefiting us all in this Chamber.

But today is important for a second reason. There were many days when I doubted that we would discuss the progress of universal credit, so the title of this debate alone is a source of huge encouragement to me. However, it is also a day when we celebrate another heroic effort. It is an extraordinary feat to be a Minister in one department for six years; it is still another to leave at a time of one’s own choosing.

As my noble friend Lord Farmer has already said, my noble friend Lord Freud disproves in one easy stroke the old adage that all political careers end in failure. He has stayed long enough at the coalface to ensure success. The story of universal credit is the story of real courage, sacrifice, endurance and painstaking policy work, and much of this story belongs to him.

In 2008-09, when we were developing the concept of universal credit at the Centre for Social Justice—I refer to my entry in the Register of Members’ Interests—there were key dynamics that we wanted to be built into a reformed welfare system. We wanted to ensure that it encouraged more people into work and made work pay, smoothed the transition into work, making the choice to take work a logical choice, and tackled poverty through increased reward from being in work.

The rollout of universal credit was not a smooth one, as my noble friend Lord Freud and the noble Lord, Lord McPherson, can attest to, but we now have a silent revolution taking place. Universal credit claimants now spend around 50% more time on job searches than comparable JSA claimants, they earn more than similar JSA claimants and they move faster into work.

However, given that universal credit is rolling out successfully, and given that it is Christmas, I want to finish my few allotted minutes with my Christmas wish list for universal credit. I was one of the first to congratulate Theresa May and the Chancellor on their choice of investing in universal credit and beginning the pathway to reversing the cuts to work allowances. I encourage them to use each Budget and each spending review to continue investing in the work allowances and taper. That is the best way of supporting those who are just about managing.

Secondly, there is one more step to take with childcare in universal credit. If you are on a higher income outside of UC, you can claim the tax-free childcare offer for as many children as you have. That is not the case for universal credit claimants, although with an investment of about £50 million it could be. Thirdly, a strong and continued commitment to universal support, extended beyond financial and digital inclusion to include family, mental health and skills support, could provide the safety net that vulnerable people need.

Many people on all sides of this House are committed to the successful rollout of UC. We thank our noble friend Lord Freud for staying at the coalface long enough to ensure safe passage for this hugely significant reform, at significant personal cost. We reassure him that his efforts have not been in vain but that we will continue, as a House, to safeguard this reform.