Universal Credit and Working Tax Credits

Drew Hendry Excerpts

Wednesday 15th September 2021 Commons Chamber

[David Linden (Glasgow East) (SNP)]

I want to begin by describing the importance of this debate:

“There are plenty of times where I’m getting such bad hunger pains that I can barely move.

I can last for a while without eating. I’ve been trying to put my mind off the hunger by either doing exercise, or maybe doing a bit of work on my computer.”

That is a quote from Morgan. He is 23 and has spent six months sleeping on friends’ sofas and occasionally on the street. He is currently suffering from severe depression that impacts on his ability to work. As a universal credit claimant, Morgan has stated that the proposal to cut the £20 uplift is

“literally like taking food off my table.”

That is the reality of life in Tory Britain—the reality of a decade of austerity measures and cuts to social security. Morgan is just one of 5,917,053 people, because that is the number of people who are relying on the £20 uplift to universal credit. Throughout this debate, when we inevitably get drawn into the hurly-burly of parliamentary politics, I want us all to keep in mind Morgan and the nearly 6 million people we are talking about, because it is their livelihoods that are on the line and their financial security that is at risk.

We are not talking in hypotheticals. The Joseph Rowntree Foundation’s report lays it bare: cutting the universal credit uplift will plunge 500,000 people into poverty overnight. We all know the impact that the universal credit uplift has had on claimants. The additional £20 per week has been monumental in helping families get by. Audrey Flannagan, who runs the Glasgow SE food bank in my home city, recently told the media:

“If you look at the impact it”—

the universal credit uplift—

“has had on the food bank, last year in the first three months from January to March we saw 601 single people pre the £20 uplift. January to March this year, we saw 151 single people. That’s a massive difference, not all because of the £20 uplift, but a lot will be because of the £20 uplift.”

The uplift to universal credit was desperately needed before the pandemic, and its impact can be seen right across the voluntary sector.

The British Government now have the opportunity to address the failures of universal credit and truly help those who are most vulnerable as we seek to recover from the pandemic. The first step should be to make the £20 uplift to universal credit permanent; indeed, it should also have been extended to those on legacy benefits, who have been so cruelly overlooked and left behind by this Government.

I have heard Ministers defending removing the uplift by repeating the line that it is best for people to get back into work rather than rely on benefits. In fact, the Chancellor himself has said that

“going forward, my view and the government’s point of view is the best way to help people is to help them into work and make sure those jobs are well paid”.

That only goes to show just how little Tory Ministers know about the benefit that they pontificate on. For their benefit, I will explain.

Universal credit supports both those unemployed and those employed on a low income. More than a third of people claiming universal credit are in employment. Of the nearly 6 million people on universal credit, 2.3 million are actually employed. On top of that, a great number of those employed claiming universal credit are parents. The latest figures show that roughly 1.9 million families with children will see their benefits cut at the end of this month.

The Child Poverty Action Group has stated that the number of poor children in working families is on the rise. Even before the pandemic, there were 4.3 million children growing up in poverty in the UK. That is nine children in a classroom of 30—a shocking indictment of Tory Britain. The proposed cut to universal credit will put a further 200,000 children into poverty, including those in working families. It is simply unthinkable.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend makes a powerful point about the impact on families of low-paid workers. We heard this morning that inflation has now gone up to 3.2%. Workers in my constituency now face an increase in national insurance and higher food costs. They are already facing higher heating costs, and let us not forget that many people in rural constituencies are off the grid for electricity and gas, so it is more expensive for them anyway. This cut to universal credit, according to the Government’s own advice, will cause a catastrophe. Does he agree that, for families in constituencies such as mine, the catastrophe will be even bigger?

[David Linden]

My hon. Friend’s constituency was one of the earliest areas where universal credit was rolled out, so he is familiar with it, and as a highland MP he is acutely aware of the much higher energy bills. The universal credit cut will probably mean a choice between heating and eating this winter for people in his Inverness constituency. He is right to put that on the record, and I hope that Members who represent constituencies in other parts of rural Scotland will bear that in mind, particularly on the Conservative Benches. It is simply unthinkable that the UK Government are even considering this policy. All MPs must consider whether they want it on their conscience when the Division bell rings tonight.

Whether or not someone claiming universal credit is in employment, the £20 uplift is vital to their income. To quote Morgan again:

“We should not have had to have gone through a pandemic just to get that increase”.

Morgan is right. The most vulnerable people in our society had been suffering for decades, long before the pandemic hit these shores. Years of austerity have deepened the inequality and poverty in our society, and the pandemic has only magnified those pre-existing inequalities. Years of austerity have deepened the inequality and poverty in our society, and the pandemic has only magnified those pre-existing inequalities in our welfare system.

A decade of Tory rule has left workers, on average, £l,000 a year worse off. Analysis by the Office for National Statistics shows that, when inflation is taken into account, the average wage is worth less in 2021 than it was in 2010. Despite the continual Tory mantra that getting people into work is the best route out of poverty, wages continue to fall, and austerity continues to deepen inequalities. The pandemic has only served to bookend the decades of cruel welfare cuts and truly highlight how inadequate support has been.