Universal Credit and Welfare Reform

Guto Bebb Excerpts

Tuesday 11th September 2012 Commons Chamber

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to contribute to this debate. I reject the claim by the right hon. Member for Birkenhead (Mr Field), who is no longer in his place, that there is a lack of interest among Government Members. Indeed, I spent my summer recess taking an interest: I visited my local jobcentre to see how it was dealing with the proposed changes; the two Work programme providers serving my constituency because I wanted to see how they were getting on; and a Tesco regeneration partnership store in Liverpool, which is an example of what can be done when large corporations work with the jobcentre system to get the long-term unemployed into jobs.

One clear message that came out of those visits was that the welfare changes were welcomed by jobcentre staff, who saw them as an opportunity to help people back into work, and by the Work programme providers, who understood the long-term issue at stake. The issue is not about getting people into six-month placements or getting them off the register for six months and then back on to it but about working with the unemployed to ensure their long-term capacity to work.

I represent a seaside resort in Llandudno, north Wales, which has seen a huge influx of people from eastern Europe to work in our hotels. They are wonderfully hard-working and welcome because of the level of service they offer. Nevertheless, it was of huge concern that although people were unemployed in my constituency, several hundred people from elsewhere in Europe were willing to work in the positions available. When I visited the Work programme providers serving my constituency, therefore, it was a pleasure to see a white board on the wall listing 28 jobs filled that August, several of which had been in local hotels and restaurants, because those businesses were engaging with the Work programme.

One message that came out clearly from those visits was that the Work programme providers were still having to sit down with people who wanted to take on a job and work out whether they would be better or worse off. I can tell the House that the Work programme providers and the clients I met were looking forward to the time when they would know for a fact that if they took a job, they would be better off.

The right hon. Member for Birkenhead made the strong point that if a 50p tax rate is problematic when it comes to incentives to work, then surely a 65p withdrawal rate is problematic too. I agree: a 65p withdrawal rate is problematic. It is an issue that we should expect the poorest in society to pay a 65% marginal tax rate, yet we acknowledge that a 50% rate was unacceptable. However, we have to put the issue in context. The fact is that we had—indeed, we still have—500,000 people facing withdrawal rates of 85% to 90%. If we can slowly move to a position where, regardless of the situation, people are better off when they work, we should not be carping about that. Hon. Members can of course make the arguments for a withdrawal rate of less than 65%—in due course I would support that—but this Government are taking difficult decisions at a difficult point in the economic cycle, in trying to change a system that has failed far too many of our fellow citizens. To argue that the change does not go far enough, when Labour sat on its hands for 13 years, is completely unacceptable.

The key point is this. I went to Liverpool and visited that Tesco store in Toxteth, which has the most wonderful views of the constituency of Birkenhead and north Wales. As a Conservative MP from Wales, I was slightly concerned about meeting Scousers who might not be the most welcoming of a Conservative politician. Under a partnership agreement with Jobcentre Plus, half the staff at the store had to have been unemployed for more than a year before being recruited and moving into a position. Visiting that store was a humbling experience. The retention rate in the first 18 months was 94%—that is, 94% of the staff who had been long-term unemployed were still in position. The pride that those people took in their jobs was something to behold, so when I hear people in this House saying, “Yes, the only jobs being created in this economy are in shelf stacking,” I just feel ashamed. The people in that store in Toxteth took pride in the fact that they were earning a salary, taking income home to their families and standing proud, knowing that they were making a difference.

However, there was one message that well and truly came out of that meeting. So many were saying, “I’m currently working 16 hours,”—or, “I’m currently working 24 hours”—“but if I go over that, I’ll be worse off.” If nothing else, the message from the universal credit to them must be: “Work 30 hours; work 40 hours—you will be better off.”