Universal Credit Work Allowance

Debate between Eilidh Whiteford and Peter Heaton-Jones

Wednesday 6th January 2016 Commons Chamber

[Dr Whiteford]

I am conscious of the fact that the hon. Lady represents one of the areas that has been at the forefront of the pilot scheme and I hope that I will have the opportunity later to address some of the issues raised there. She makes a valid point that the economic recession hit people very hard indeed, and the people who were hit the hardest were those already in vulnerable employment—those in the most insecure jobs. Unfortunately, recovery just has not given them the job security that they might have hoped for.

[Peter Heaton-Jones (North Devon) (Con)]

The hon. Lady is making interesting points, but the facts do not quite support some of what she is saying. Is it not a fact that the universal credit system is incentivising people to get into work? The figures speak for themselves: 71% of universal credit claimants in the first nine months moved from welfare into work. It is working.

[Dr Whiteford]

The whole point that I am trying to make is that any progress that has been made will be undone if the Government remove the work incentive, which is the work allowance. It is the aspect of universal credit that makes it possible to earn more when they work. By cutting the work allowance, the Government are going to impose an eye-watering level of marginal taxation on people in low-paid jobs and make it harder than ever for those in low-income households to break out of the poverty trap. If the Government were serious about making work pay, if they were serious about boosting the UK’s productivity and if they actually wanted to help people get on, they would be increasing the work allowance, not reducing it. That would be a genuinely progressive measure, and it would actively help those in low-paid work.