Universal Credit and Working Tax Credits

John Stevenson Excerpts

Wednesday 15th September 2021 Commons Chamber

[Jonathan Reynolds]

I have a lot of time for the right hon. Gentleman, as he knows, and he has been vocal in opposing the Government and we all have respect for that, but I must put a few things on the record in response to his intervention. The reductions in poverty under the last Labour Government were tremendous, and we did not even know how good they were until we got the evaluation, sadly a few years later when already so much of that had been taken apart. Of course there were problems with the previous system, but no one should try to claim that the last Labour Government were not a reforming Labour Government. As the right hon. Gentleman knows, after that Labour Government came to power a single parent did not have to go out and look for work until their eldest child was 16—there was no regime in the world like that—and Jobcentre Plus did not exist. So there was a lot of reform and the system was improved, but crucially—this is the big difference from the reforms of this Government—our reforms brought poverty down, brought more people into the workplace, and made this country stronger, more resilient and a better place for everyone. That is why, sadly, our record is overwhelmingly better than this Government’s.

[John Stevenson (Carlisle) (Con)]

Everybody acknowledges that the way out of poverty is employment; why when a Labour Government leave office is unemployment always higher than when they first went into office?

[Jonathan Reynolds]

I have dealt with this intervention before—being involved in so many Finance Bills does give that experience—and that is false; a quick Google search will put the record straight for the hon. Gentleman.

The great Labour Government after the second world war who created the welfare state, built 1 million council houses and created the national parks while having to deal with demobilisation after the war are not hugely relevant to people who want to cut £20 a week from 6 million families today. But I will always defend the post-war Labour Government, the greatest Government in the history of this country.

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[John Stevenson (Carlisle) (Con)]

I am an enthusiastic supporter of the levelling-up agenda. It is a flagship Conservative policy, it was a key part of the 2019 manifesto, and it is very much built on the concept of the northern powerhouse, which was established in 2014. The levelling-up agenda can change lives and communities. People often ask what “levelling up” actually means. I think it is quite simple: the goal is to improve people’s lives.

To achieve that, clearly there will be a number of initiatives, on infrastructure—road, rail and broadband; better housing; an improved environment; better health outcomes; and the skills and education agenda, which we cannot get away from and which is vital. In my view, it is also about raising income levels, particularly for the lowest paid. We have achieved much on that over the past 10 years: personal allowances have risen considerably above inflation; council tax rises have been suppressed, particularly in the early years of the Conservative Administrations; the minimum wage has gone up substantially above inflation, improving people’s take-home pay; and, most importantly of all, we have seen the creation of thousands, if not millions, of jobs over the past 10 years, which Conservative Members believe is the best way out of poverty. More money in people’s pockets creates greater freedom for individuals and their families, and can help those families to live better lives.

Last year, along came the pandemic, and the Government’s response has been terrific: the furlough scheme has been brilliant; other supporting measures, on rates and other funding initiatives, have been very beneficial and supportive to the economy, to communities and to individuals; and of course we have had the £20 a week increase in universal credit.

Universal credit itself has been a huge success. It coped extremely well in the pandemic, with the many tens of thousands of applications that all came surging at one point. All credit to the jobcentres up and down the country, and I give full credit to Department for Work and Pensions Ministers for the great job they have done. At the time, the Government said that the measures would be temporary, probably believing that they would last only six months or thereabouts. However, £20 a week—or £1,000 a year—has made a real difference to real families up and down the country, and we must remember that 40% of people on UC are in work, 35% of those on UC are actually seeking work, and probably half of those on UC at present have never known anything other than the rate they are currently receiving; they have got used to having it. Let us imagine somebody on £30,000 a year being told that they are having to take a £1,000 salary cut—they would not be in the least bit happy. This is even harder for those who are on less.

There are consequences of such a cut for the economy of the local areas. In Carlisle, my constituency, there are 8,870 people on UC, so it will take £9 million out of the local economy. I am very conscious that that money would be directly spent in the local economy. I appreciate that the uplift has a considerable cost and fully accept that the Chancellor has some challenging decisions ahead. I am a fiscal conservative and will be supporting many of the measures the Chancellor will undoubtedly have to bring forward. However, I very much believe in the levelling-up agenda, which is one of the great strategic policies of the Conservatives. I fully engage with it and want to support it, and a key part of improving the standard of living of families and individuals is levelling up. As I said at the beginning, it is about improving people’s lives, and retaining the uplift would help to improve many people’s lives. I will therefore support this motion.