Universal Credit Deductions

Hywel Williams Excerpts

Wednesday 19th July 2023 Westminster Hall

[Hywel Williams (Arfon) (PC)]

It is a pleasure to serve under your chairmanship, Dame Maria, and to speak in this debate. I congratulate the right hon. Member for Glasgow South West (Chris Stephens)—sorry, the hon. Member, though I am sure he will be right hon. at some point—on securing it.

I did have a much longer speech. However, I cut it quite severely for this debate, thinking that there might be a mass of Conservative Back Benchers here to defend their Government’s policy. Clearly, I was mistaken. Given First Minister Mark Drakeford’s statement last night that Welsh Labour would oppose cuts and stoppages to universal credit, I had rather hoped to see a mass of Welsh Labour MPs here as well. I confess that cannot spot a single one, though I commend the three Labour Back Benchers who are present, and look forward to their speeches.

Arfon is one of the poorest constituencies in the UK, as the Minister will know, having stood against me there some time ago—but we will not go into that. For the poorest of the poor, the outlook is very bleak. In February this year, 4,500 people claimed universal credit in Arfon, and 2,100 of them, or 48%, were subject to deductions—nearly half of them. The average deduction was £59. The total deduction taken from the very poorest people in Arfon every month is £125,000; grossed up, that is £3 million a year. Every year, therefore, the poorest people in Arfon are returning £3 million to the Treasury. They cannot afford that. They are on universal credit—a sum assessed to be the very minimum needed to live. I could not live on universal credit, and certainly not on universal credit that is reduced by £59 every month. I have a straight yes/no question for the Minister: could he live on universal credit that has been cut every month by £59?

I did a surgery specifically on universal credit some time ago, and did a budgeting exercise with a constituent of mine from a housing estate on the very edge of town. She knew exactly how much she had to spend. There was nothing spare at all. Looking at the figures, I said, “ Look, you’ve got a pound spare.” She replied, “Once a week, I take the bus home with heavy shopping, rather than having to walk the whole way every time.” I do not know exactly how much I have to spend every month. Does the Minister know? My constituent did. She is an expert. It is unlike the picture that is often conveyed of people on universal credit—that they are somehow feckless.

In Wales, in February, 114,100 children lived in families who are on universal credit and paying deductions. The percentage of Welsh children in universal credit households paying deductions was 57%. Three of every five children are in families on universal credit living below the minimum sum assessed to meet their needs. That is the level of deprivation that the system causes. The Trussell Trust has been mentioned several times; it is no surprise that people on universal credit are being referred to its schemes in Wales. Over half of them are also paying deductions. It is quite clear from the evidence where the problem lies: with deductions for half of people on universal credit.

The monthly deduction from universal credit households with children in Wales was £4,208,000—over £50,496,000 every year. Wales is a poor country. Other parts of the UK are poor as well, such as north-east England and Merseyside, but I can say this for Wales as a Welsh MP: our poorest people cannot afford to lose £50 million in income every year. We cannot afford this Tory Government. Indeed, we need a coherent Welsh benefit system, among other things, starting of course with the devolution of benefits administration—that is my party’s policy.

On 24 April of this year, I asked the Under-Secretary of State for Work and Pensions, the hon. Member for Mid Sussex (Mims Davies), a very straightforward question:

“Have the two-child limit and the benefit cap increased child poverty?”—[Official Report, 24 April 2023; Vol. 731, c. 491.]

Now, I would imagine that most people here know the answer to that. The Under-Secretary of State, however, replied with 88 words of evasion but no answer. Put simply, that answer is of course, “Yes”.

The two-child limit affects nearly 19,000 families in Wales, and abolishing it would give each child an extra £3,235 every year. On a UK basis, it has been calculated that this change would cost £1.3 billion. To put that in perspective for hon. Members, the most valuable premier league squad is Manchester City, which is valued at £895 million. But let’s not be too ambitious! The fifth most valuable is Man United at £645 million; for the value of two Man United squads, we could take all of these children out of poverty. This Government will not do it, but for pity’s sake, what about the official Opposition angling to be the next Government? Are the lives of children blighted forever by poverty not worth two football teams? Would that not be better on day one of a new Government—better than scrambling to balance the Tories’ books?

The shadow Minister should consider the words of Raymond Williams, one of the giants of socialist thought in this country in the last century—although a member of my party, not his—who said something very striking, with which I will finish:

“To be truly radical is to make hope possible rather than despair convincing.”