Universal Credit Work Allowance

Mark Durkan Excerpts

Wednesday 6th January 2016 Commons Chamber

[Mark Durkan (Foyle) (SDLP)]

It is a pleasure to follow the hon. Member for Glasgow South West (Chris Stephens) in actually debating the motion, which is about the Government’s cut to UC work allowance. This debate has been like a silent disco experience; it seems like the other side are tuned into a debate about their vision of UC and some of the issues and arguments around its roll-out, whereas this side of the House seems to be tuned into the right debate, which is about the cut to UC work allowance.

We have heard spurious arguments across the Chamber. The hon. Member for Braintree (James Cleverly) told us he wants his constituents to be able to improve their choices, but he has not told us how the cut to the UC work allowance is going to improve anybody’s choices; it certainly is not going to improve choices for people in my constituency when the effects of this change reach them in time to come.

We have also heard some other nonsense arguments. The hon. Member for Gloucester (Richard Graham) said the Institute for Fiscal Studies was telling us that nobody will lose out from the changes. That is not what the IFS has said in relation to these specific changes to UC, and not just the change to the work allowance. The IFS estimates that, taking into account all the announced changes to universal credit, there will be a reduction of £3.7 billion in entitlement, and that there will be an aggregate loss of £1.5 billion a year for working families.

As the hon. Member for Banff and Buchan (Dr Whiteford) pointed out, some people are billed as losers and some as winners, and we can look at what the various analyses and appraisals show. According to the IFS, 2.6 million families are due to lose an average of £1,600 a year, whereas 1.9 million are scheduled to gain an average of £1,400 a year. Of course, we do not know whether those who are currently projected as winners will stay as winners, because the Government have already melted and bent all their promises and assurances on universal credit. They said that work would pay, and that more work would pay, for everyone, but that promise has been eroded and corroded by the Government’s measures over the past year.

In the spring, the Government produced a Budget in which they announced one figure for the welfare cap, but then in the summer Budget they reduced the cap by £46.5 billion over the following four financial years. That shows us that we cannot depend on any of the Government’s projections or assurances. Of course, when the Chancellor announced his U-turn on tax credits, it was clear that he still intended to make both the near-term and longer-term changes to universal credit. He said that he would achieve by other means the savings that he was giving up through his U-turn on tax credits. Will those savings come through other changes to universal credit, including the work allowance? Will those who are currently billed as potential winners from the work allowance have their terms and conditions changed in years to come? Government Members have made no argument about the change to the universal credit work allowance that they could not equally give in response to any future cut affecting other universal credit claimants.

Quite apart from the question of whether the roll-out of the project will work in IT terms, individuals know they cannot rely on any of the assurances and promises that have been given about what universal credit will mean for them. It is all very well for Tory MPs to say what it means to them when they turn up in their constituencies, but it will be a different story around kitchen tables when the budgets of hard-working families are affected.