Universal Credit and Working Tax Credit

Claire Hanna Excerpts

Monday 18th January 2021 Commons Chamber

[Claire Hanna (Belfast South) (SDLP) [V]]

I thank our colleagues in the Labour party for bringing forward this debate to try to provide security and reassurance to those across all our constituencies who have relied on this uplift at a time of increased costs and fewer economic opportunities.

The number of universal credit claimants in my constituency has increased by 145% in the year to November. That includes many people who have not been reached by furlough and self-employment support. The Prime Minister stated last week:

“What we want to see is jobs…and…growth”.

We all do, but between covid and Brexit that is simply not a realistic solution at present. Wanting a better economic climate is not going to meet the basic needs of those on universal credit, and it ignores the fact that 40% of claimants are already in work.

The compound economic crises that we are facing are driving more people into needing the safety net of social security. For public health reasons we need more people to stay at home, but the social security net is already being found to be unfit for purpose. Existing cuts are already biting. Lone parents—just one group—have lost around 10% of their income. One participant told the Women’s Regional Consortium Northern Ireland:

“The amount allocated to us just isn’t sufficient for basic living costs. We can’t have the heating on because we can’t afford the gas. Thank God for food banks, otherwise eating would have been much worse.”

I would like to take this opportunity to recognise the work of the South Belfast food bank, as well as the churches and the sporting organisations—including Bredagh GAC, Rosario football club and Ormeau Road boxing club—who have come together to meet the need in my constituency.

Unfortunately, in 2015 Northern Ireland returned welfare powers to Westminster. I regret that, despite pledges, hundreds of people are subject to benefit cuts without mitigation. I am urging the Department for Communities to bring forward legislation to stop tens of thousands more people falling into that gap, and to provide top-up payments for the two-child tax credit rule.

Medical experts make it clear that the crisis will not end neatly at the end of March. The economy will likely experience disruption throughout 2021. The uplift was the right thing for the Government to do, and I commend them for doing it, but by their own logic, there is no case for removing it now. That this change would save a lot of money is not in doubt, and I know that there are consequences to borrowing, but there are consequences here for the economy, too. The evidence shows that universal credit is spent almost immediately, so this cut would be a loss to local shops precisely when they need it most.

To finish, I will borrow a phrase from Marcus Rashford: people in poverty matter. The Chancellor seriously misjudges those people if he thinks that he can mislead them into thinking that an up-front payment is better simply than nothing. The one-off payment is an attempt to solve a political problem, but it does absolutely nothing to solve the problems of those families relying on this uplift.