Universal Credit and Working Tax Credits DebateFull Debate: Read Full Debate
Jonathan ReynoldsMain Page: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Department Debates - View all Jonathan Reynolds's debates with the Department for Work and Pensions
In my constituency, £10.5 million will disappear from the spending capacity in our local economy when more than 10,000 people and working families lose access to this benefit. Does my hon. Friend agree that that will have a tremendously bad effect on local spending power?
I thank the shadow Secretary of State for introducing this important debate. Northern Ireland has the highest levels of child poverty in United Kingdom of Great Britain and Northern Ireland. My mailbag, like everyone’s, is full of real-life stories of people worried sick about how they will be affected. Does he agree that the removal of the £20 universal credit payment will plunge even more people into food poverty and have a detrimental effect not just on their pockets financially but on their health? It is a double whammy, and they just cannot take it.
The hon. Member is kind. I hope he will answer my intervention rather than re-intervene on me; I found that very odd earlier. Is it better in principle that people receive £20 through the benefits system or through going into longer hours, with more progress in work and building up a career where there is no limit on what they achieve?
My hon. Friend makes a compelling argument about universal credit being an in-work benefit for many people. I have been inundated with calls from constituents who are supermarket workers, teaching assistants and carers. They are already working long hours and they have gone above and beyond during the pandemic. Does he agree that this is not the way to thank those hard-working key workers for everything that they have done for this country?
I will give my hon. Friend some statistics from my constituency, where 37% of all children—that is 6,802—are living in poverty, a figure that has increased considerably under the Tories. Thousands of them and their families rely on universal credit to put food on their tables. With the latest figures showing inflation rocketing, and that is very much on food, does my hon. Friend agree that adults and children will go hungry if the Government do not do the right thing?
The Government said at the time they increased the universal credit payment that it was to pay for essentials during the pandemic. I take that to be food and fuel. Does the shadow Secretary of State believe that food and fuel prices have fallen since the pandemic, and if not, does that not just do away with the Government’s argument altogether?
My hon. Friend is making a very powerful speech. In Oldham, there are over 11,000 people in work reliant on universal credit with 22,000 children. Is he as concerned as I am that the long-lasting impacts of driving these children into further poverty—as we saw, for example, in the Nuffield Foundation report yesterday—are going to be detrimental not just for those families, but for society as a whole?
According to the Resolution Foundation, over 40% of people on universal credit were food-insecure before the Government introduced the £20 uplift, so does my hon. Friend agree that by cancelling the uplift and cutting universal credit by £20 a week, the Government are taking the money from people that they need to put food on their tables and to support their families?
My hon. Friend is making an extremely powerful speech. We have been through a period when communities have come together, and he has just talked about volunteering and the way that communities have come together to deal with food poverty in particular. Children have been involved in that, and this is the Government who failed to feed our children during holiday time, so it is no surprise that they are bringing in this cut. Even in a constituency such as mine in London, over 5,000 children live in households that receive universal credit and are going to face a cut on top of what we have all been through over the last 18 months. It really is time that this Government started to think about the consequences of what they do to the poorest people in our communities.
Erdington may be rich in talent, but it is one of the poorest constituencies in the country. Some 63% of working age families with children in my constituency face a £1,040 cut in the biggest overnight cut to social security in the history of the welfare state. Does my hon. Friend agree with me that the Government seem to be oblivious to the despair of mums and dads who are wondering how they are going to be able to feed their kids as a consequence of soaring bills—electricity, gas—and prices in supermarkets, and that at a time like this this cut is truly the cruellest cut of all?
I took a moment to look back at some of the calls the hon. Gentleman has made over the last couple of weeks to increase benefits. When I added them all up, I found that there is not just the £6 billion for this benefit, but a total of about £15 billion that the Labour Front Bench has called for. Can he tell us how we are going to pay for that, because it is real people who will be paying for those benefits?
Some 7,850 of my constituents will in three weeks’ time also lose £20 a week. Does my hon. Friend agree that the real cost will be the impact on people’s lives—the lost opportunities for those children’s futures and the hopes we all carry? Is it not right that we invest in people, not see this as a cut in itself?
I absolutely support everything my hon. Friend is saying in his speech, and the Government should listen hard, because we have all lived through a very difficult 18 months and there are increasingly difficult times ahead as well. We have learned many lessons during this period, such as that we should invest more in the things we value most. This money is targeted at families; 40% of families with children in my constituency will lose out as a result of this decision, and that will have an impact on those children. We have one of the most expensive childcare systems in the world and we know that working families are struggling. The Government can do something simple to support those families by changing their direction on this cut today.
On the hon. Gentleman’s comments about the last Labour Government and the 2008 financial crisis, what support did that last Labour Government give to those families?
Actually, that is a really important point because the hon. Gentleman was guilty in his comments on the previous welfare system of looking at it through rose-tinted lenses. There were huge problems with the previous welfare system. It caught hundreds of thousands of families in poverty traps, and at every opportunity since 2010 the Labour party resisted our efforts to reform welfare, to make work pay and to provide better financial support for families in Britain.
Just this week, the official jobs statistics showed that more people are getting back into work and there is a record number of vacancies. That is a tribute to the British people and businesses. It shows that our plan for jobs is working. It shows that our comprehensive and unprecedented support for citizens and corporations as well as the NHS, in trying to protect lives and livelihoods, has worked. After the terrible personal and economic impact of covid, boosted by the successful vaccination roll-out, Britain is now rebounding.
It was right that we took prompt and decisive action to support our nation during this challenging time. We had the job retention scheme, the self-employment grants, the VAT changes, the business rates relief, the suspension of evictions for people and businesses who were renting—I could go on. We could only do that, though, because we went into the global pandemic with strong economic foundations built as a result of 10 years of Conservative measures to restore the nation’s finances after the financial crisis on Labour’s watch, when, memorably, there was no money left. Those measures included a sustained focus on supporting people to move into and progress in work through universal credit, with the highest level of employment ever seen in this country just before covid hit.
I will not, because I am conscious that we are nearly an hour into this debate and many hon. Members will want to speak about this important matter.
Right across Government, we are investing to help people to get better-paid jobs, whether that is through digital boot camps, the lifetime skills guarantee, the £650 billion infrastructure programme that will generate 425,000 jobs, the £8.7 billion affordable homes programme expected to support up to 370,000 jobs, and the green jobs taskforce, which goes from strength to strength as we work our way towards net zero. I have referred to the extra funding through the health and social care levy, which will include support for care workers, but we will not stop as we help people to progress in work. This Conservative Government and Conservative party want people to prosper as we build back better and level up opportunity across the country.
Tackling poverty through boosting income is one element and we will continue to support people with the cost of living. We have kept the uplift in housing support through the local housing allowance rates, as I mentioned to the hon. Member for York Central (Rachael Maskell), maintaining it in cash terms this financial year. We spend over £6 billion on supporting childcare, which is equivalent overall to about £5,000 per family. As I said to the House, that can be up to £13,000 per family for people on universal credit.
We have increased the automation of matching benefit recipients with energy suppliers to make it easier for the warm home discount to be awarded almost automatically. I was very pleased to see that more mobile and broadband suppliers stepped forward with social tariffs for people, which is why I am delighted to let the House know that we are working with those suppliers to make it easier for them to verify the identity of people seeking those special discounts. I am also leading cross-Government action to do more on tackling poverty and the cost of living, which will help many families with their day-to-day costs.
We have heard that universal credit is flexible and that people are treated individually. I am very aware of the challenges on food insecurity. That is why we included the questions we did in the family resources survey so that we can start to think about how we can direct our policies specifically to those people. As my hon. Friend the Member for South West Hertfordshire (Mr Mohindra) was trying to get out of the shadow Secretary of State, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), what is accurate—I am pretty sure to say—is that, in 2008, tax credits may have changed, but that was effectively for people in work. What we did not see was a boost in the unemployment benefits, so when the shadow Secretary of State criticises us for putting an extra £20 a week in the pockets of people who were newly unemployed, I do not think that his assertion is defensible.
One thing that the House may see in a couple of years is that, although in the last year of the last Labour Government we saw a reduction in relative poverty, that was largely driven by the fact that higher-paid people were unemployed—we saw a shrink in relative poverty simply because of a statistical anomaly. We have to deal with real-world facts and make sure that the provision of cash, by helping people with their income, is really the way to help them to get on in work but also to help them with the cost of living.
The last Labour Government—admittedly that was quite a long time ago and many Members of this House will not have been serving here then—did not build enough homes. Prices were not tackled, money was not well spent and we were left with no money.
The shadow Secretary of State will be aware that I am not a fan of talking about relative poverty, because it is simply a statistical element. However, since 2010, there have been 60,000 fewer children in absolute poverty before housing costs. Children living in workless households were around five times more likely to be in absolute poverty last year than those in households in which all adults worked. We know that full-time work reduces the chance of being in poverty. Overall, there are also 220,000 fewer pensioners in absolute poverty.