Benefits: Reductions

Lord Sherbourne of Didsbury Excerpts

Thursday 1st November 2018 Lords Chamber

[Lord Sherbourne of Didsbury (Con)]

My Lords, it a pleasure to follow the noble Baroness, whose speeches I always listen to with great interest. She has great expertise in housing, about which she has been speaking this afternoon.

This debate is about the impact of government policy on family life. I want to focus my remarks on the way in which this Government, and their reforms, are making life better for families by increasing social mobility and improving life chances. It is worth remembering that to be successful in this regard, all Governments must do three fundamental things. First, they must continue to manage the nation’s finances in a prudent way in order to avoid the financial crash which we know can cause huge social damage. Secondly, they must go on ensuring that we have an enterprising economy, because that is only way to generate the jobs that give people the wages and salaries they need. It is the only way to generate the taxation which sustains our vital public services. Thirdly, we need a welfare system which protects those who cannot protect themselves and those who need additional help, but it must be a system which does not blunt incentives. As Lord Beveridge said in his report:

“The State … should not stifle incentive, opportunity, responsibility”.


It should be a welfare system which is financially robust and viable for the long-term.

That brings me to universal credit, which I strongly support because, I am afraid, Labour’s system of tax credits turned out to be something of a shambles. Tax credits were impossibly complicated. Hopeless computer systems left people out of pocket and, tragically, they kept millions of people trapped on out-of-work benefits.

Last week the Economist magazine, which is no uncritical supporter of universal credit, wrote:

“Universal credit has a lot going for it. Streamlining benefits into one monthly payment will eventually make the system easier to administer. It removes perverse incentives whereby somebody moving from welfare to work can lose about as much in benefits as they earn. Allowing people to make a single application for all their benefits should improve take-up, and so reduce poverty.”


That was before the improvements and enhancements announced in Monday’s Budget, which have been welcomed by many charities such as the Trussell Trust, the Resolution Foundation, the Joseph Rowntree Foundation and the CPAG.

Is universal credit a perfect system? No, of course not. It is a major reform and there were bound to be problems—I readily admit that—so people in this House are right to be eagle-eyed and vigilant, as they should be. Those people include the noble Baroness, Lady Lister, and of course the late Baroness Hollis, who many colleagues have mentioned and who is a real loss to this House. The Government should listen to their criticisms; the Budget has shown that the Government are listening and responding. The Government are now providing increased funding to give additional protection to existing welfare claimants as they move on to universal credit. In addition, work allowances are being increased.

Perhaps I might make one additional point, because the responsibility of the Government goes beyond the welfare system. I want to talk about the provision now being made by the Government for health and the National Health Service. Many noble Lords have talked about the impact on people with mental health issues, so I very much welcome the increase in spending on the NHS by over £20 billion a year by 2023-24. I welcome in particular the fact that mental health will take an increasing share of the NHS budget. For all these reasons, I welcome and support everything the Government are doing to help families.