Oral Answers to Questions

Chi Onwurah Excerpts

Monday 1st February 2016 Commons Chamber

[Mr Vara]

The hon. Gentleman has a problem understanding, so I will say this very slowly: as a consequence of the triple lock, which means an increase in line with whichever is highest out of inflation, earnings and 2.5%, when the new state pension comes into place in April, pensioners will get £1,000 a year more than under the old system. As he should remember, Gordon Brown insulted pensioners with a 75p rise, so we will take no lectures from the Opposition on who really cares about pensioners.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

9. What assessment he has made of the effect on the income of working households of changes to the universal credit work allowance.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The changes to universal credit work allowances form part of a broader package of measures, including the introduction of the new national living wage, the increase in the personal tax allowance and the enhanced package of childcare support. Importantly, the single taper rate of 65% ensures that the benefits of work are clear and that support is withdrawn at a predictable and consistent rate, unlike under the existing tax credits arrangement.

[Chi Onwurah]

The Government were forced into a climbdown over tax credit cuts, but it was only a temporary reprieve, because cuts to the working allowance mean that 2.5 million families will be £1,600 per year worse off by 2020. How can the Secretary of State say that he is making work pay, when low-paid working families are paying the price for his cuts?

[Mr Duncan Smith]

I disagree with the hon. Lady. An independent study has already shown that with universal credit people get into work faster, stay in work longer and progress faster in earnings. She cannot take this in isolation, however; it is worth remembering that the national minimum wage is rising to some £9, and that under universal credit women will get 85% of their childcare costs, instead of 70%. There will be free childcare for poorer people with two-year-olds, and childcare support for people with three and four-year-olds. The total package is hugely beneficial to people who want to work, which is why, as we get more people back to work, our record will only improve. That compares with the last Government’s shocking record: one in five households with nobody in work.