Oral Answers to Questions

Debate between Jim McGovern and Lord Grayling

Monday 18th October 2010 Commons Chamber

[Jim McGovern (Dundee West) (Lab)]

11. What recent assessment his Department has made of the effects on levels of benefit dependency of wage levels.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We have not yet made an assessment of the direct impact of wage levels on benefit dependency, but we firmly believe that work must pay. Within the current system, we have the anomaly that some individuals can keep as little as 4p in an extra pound earned if they move up the income scale, and a small number of individuals receive more than £26,000 a year in benefits—a substantial amount when compared to the incomes of most working households. That cannot be right, and that is why we are bringing forward radical welfare reform proposals to ensure that work pays.

[Jim McGovern]

I thank the Minister for his response. I hope that he agrees that the national minimum wage gave a massive lift to many working people throughout the UK, and it is now time to move on and progress to a decent living wage. When wages are low, it is no surprise that benefits are often worth more than work. In my view, that is not a problem for benefits, but whatever the problem I hope he agrees that the solution is a fair day’s pay for a fair day’s work.

[Chris Grayling]

Clearly, as an Administration we would like employers to move people up the income scale, and for there to be wealth in the country to enable our businesses to do that. Of course, they have big challenges to overcome after the past few years and all the economic problems that were created under the previous Government, but I share the hon. Gentleman’s aspiration. I would like people to move up the income scale, but above all else, we want to ensure that, in all circumstances, work pays. That is why we are introducing the universal credit and the changes that we are making. There should never be a point at which somebody says, “It’s not worth my while going back to work.”

Oral Answers to Questions

Debate between Jim McGovern and Lord Grayling

Monday 19th July 2010 Commons Chamber

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The future jobs fund is directed at young working-age people. It continues to provide work placements, and all existing contractual commitments are being honoured. Next year we will introduce our Work programme. This will offer integrated employment support to young people, regardless of the benefit that they claim. The programme will help them move into sustained employment rather than temporary jobs. The Government believe that that will have positive impact on child poverty, and indeed all kinds of poverty, in future. However, the recent changes made by the Chancellor in the Budget will have no overall measurable impact on child poverty in the next two years.

[Jim McGovern]

I hope that the Minister will agree that a decent living wage is the best way, and the most efficient means, of combating poverty. The previous Government certainly knew and understood that, and supported and helped many people back into work, not only to their benefit but to the benefit of their families and communities. Will the Minister consider the implications of unemployment for poverty? Will the Government reconsider their proposal to scrap the future jobs fund?

[Chris Grayling]

What the hon. Gentleman does not understand is that the future jobs fund does not guarantee a sustainable future job. I agree with him about getting people off welfare and into work. Nobody will rise out of poverty by remaining on welfare. We want to change things and to get people back into work, but we want to get people into sustainable work. That is why we announced 50,000 additional apprenticeships, and why the Work programme will be geared to getting people into long-term sustainable employment. We will do people no favours by creating artificial short-term schemes that cost a lot of money which, thanks to the previous Government, we can no longer afford.