Universal Credit and Welfare Reform

Jacob Rees-Mogg Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I beg to move,

That this House notes that the Universal Credit is late and over budget; recognises that there is widespread unease surrounding the implementation of the £2 billion scheme’s IT system; further notes that the project is so badly designed that it is set to reduce work incentives for over two million people and hurt small businesses and the self-employed; believes that Ministers have failed to properly account for numerous basic details of how the scheme will work, such as its interaction with free school meals or what is to be done with 20,000 Housing Benefit staff; further believes that the project is poorly thought through and is now at risk of descending into chaos; and calls on the Government to publish the business case, so that the House can see a detailed plan of implementation, and urgently to set out a plan to address these deep flaws before it is too late.

At the heart of the debate is a very simple principle, which is that anyone in this country should be better off in work than they are on benefits. That is a principle in which we in the Opposition passionately believe. We are a party that was founded by and for working people and that is why we want universal credit to succeed. It is now, however, an open secret in Whitehall that universal credit is a flagship that is sinking fast. The Treasury, says Mr Nick Robinson of the BBC,

“have long had deep anxieties that”

the Secretary of State

“might not be able to control spending”

on universal credit. Last week, the Minister for the Cabinet Office and Paymaster General, who is an old friend of the Secretary of State, was asked how universal credit was going. He said:

“Are we there yet? Am I absolutely confident we are there yet?”

His answer? “No.” This morning, an unnamed Minister weighed in to support the Secretary of State in his own way with a ringing endorsement, saying that universal credit

“is another car crash waiting to happen”.

The Secretary of State is no stranger to friendly fire. Indeed, back in 2002, he described himself as the “quiet man” who was about to “turn up the volume”. Today, we are not asking the Secretary of State to turn up the volume. We are asking him to dial down the chaos and dial up the competence in his Department.

The Secretary of State and I share a faith. He, like me, believes that confession is good for the soul, and today is confession time. We need answers to a host of questions about universal credit and we cannot help to get this vital project back on track unless he comes clean about exactly what is going on.

[Jacob Rees-Mogg (North East Somerset) (Con)]

While we are on a religious theme, I wonder whether the right hon. Gentleman might think about motes and beams, as there is rather a large beam in the eye of those on the Opposition Benches.

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[Jacob Rees-Mogg (North East Somerset) (Con)]

It is a great pleasure to support the Secretary of State today. He is one of the most serious-minded members of Her Majesty’s Government, and he has put forward a proposal where there is amazingly little disagreement over the principle of what is being done. Indeed, the motion is not about the principle; it is about some of the practicalities. However, it is worth concentrating on what the principles underlying the universal credit are.

The first principle must be simplification. All of us know from our surgeries that the people who come in to see us—who are some of the most vulnerable in society—are confused and bewildered by the range of benefits that may or may not be available to them, the interaction between one and another, and the way they can become worse off by doing sensible things, which therefore encourages them to do things that are not in their long-term best interests. To move to a system that is simple and straightforward must therefore be an advantage, and it has, I think, broad support across this House.

Then there is the issue of the reduction rate—the rate at which people lose money from benefits when they move into work. I have spoken before in this House about the Laffer curve. It is often pooh-poohed by Opposition Members, although I see—as they themselves say—that there is an irony in that we quote it most often in favour of high-rate taxpayers and they quote it most often in favour of people on benefits. However, in my view the Laffer curve applies equally to both. People work because they get money out of it. It was Dr Johnson who said that nobody but a blockhead writes, except for money. It is not just writing that is done just for money; it is most employment—with the exception of being a Member of Parliament, which I think most of us are so privileged to do that we might even pay for the opportunity.

The importance of that point is that the withdrawal rate is going to be the absolute key. It is crucial that, at all times, being in work makes people better off than being unemployed, not only for their financial benefit but because dependency is bad for people and their families. It is destructive to their lives. It leaves them without a focus, unable to get up in the morning or to do anything. It can also lead to depression. We want a society in which people want to be, and are encouraged to be, in the work force, and in which dependency is an option that is limited to those for whom nothing can be done. We need to become a society in which dependency is rejected.

The principles behind the reforms are fantastic, and they are worthy of widespread support. I agree with my hon. Friend the Member for Aberconwy (Guto Bebb) that we would like the withdrawal rate to be reduced from 65%, but 65% is still a lot better than some of the very high rates that exist, which is extremely good news. In respect of the practicalities of the reforms, my admiration for the Secretary of State is unbounded. I have never before seen a Minister or an Opposition spokesman in the House being so open to suggestions, thoughts and questions about what they were doing, or being so careful about the way in which their proposals were being implemented.

It was notable at questions yesterday that, in response to a point about refuges raised by the hon. Member for Manchester Central (Tony Lloyd), the Secretary of State said:

“If he has any concerns that he thinks we might not have dealt with, my door is open for him to come and talk to me.”—[Official Report, 10 September 2012; Vol. 550, c. 14.]

That is a Conservative being open to a socialist Member of Parliament. Politics normally involves a Minister being defensive and saying, “I’ve got it right. You know I’ve got it right, and my troops will vote for me because the Whips have arranged that in advance.” It has been wonderfully refreshing to hear the Secretary of State go through all the points today. Has anyone ever seen a Secretary of State take more interventions than he did in his speech? In each case, if he did not have an immediate answer, he said that he would be willing to listen and to consider the matter, to ensure that we got this right. Pilots are being carried out, and the scheme is being implemented carefully and cautiously.

[Jackie Doyle-Price]

Will my hon. Friend give way?

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[Jacob Rees-Mogg]

It would be an honour.

[Jackie Doyle-Price]

Does my hon. Friend agree that the spirit in which the Secretary of State is approaching this issue stands in clear contrast to the approach of the Opposition, who have tabled this mealy-mouthed, negative motion? They are willing the reforms to fail, but we should all want them to succeed if we really want to make work pay.

[Jacob Rees-Mogg]

I am very sympathetic to what my hon. Friend says. This is something of a puzzle to me, because the Labour Front-Bench spokesmen on this subject are among the most civilised members of the Opposition, and it seems uncharacteristic of them to table such a motion—[Hon. Members: “Hear, hear!”] I felt sure that they would be delighted to be flattered by me, of all people. What I have said about them is true, however; it is recognised by those on my own Front Bench.

However, the motion before us is extremely overstated. It uses the language of chaos and disaster, as did the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), and calls on the Government “urgently to set out” plans. In contrast, the Secretary of State answered every question that was put to him. He was willing to listen, and he is doing something that, in principle, those on both sides of the House agree with.

[Mark Durkan]

I thank the hon. Gentleman for giving way during his praise of the Secretary of State. Last week, the Secretary of State refused to accept a reasonable job offer and incurred no sanction. If that is okay for him, why is it not okay for others?

[Jacob Rees-Mogg]

That was a most brilliantly phrased intervention. In turning down the opportunity to be Lord High Chancellor—one of the most ancient posts in the land, and one that most people would be honoured to hold—the Secretary of State showed his commitment to ensuring that the reforms will work. In turning down a promotion, he showed his nobility. Having listened to his speech in the debate today, I wonder whether there ought to be an amendment to “Erskine May”, so that when an argument has been comprehensively won by a Minister at the Dispatch Box, the debate could simply end, to a round of applause and cheering, with no further need for discussion.