Universal Credit Work Allowance

Neil Gray Excerpts

Wednesday 6th January 2016 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

Thank you, Madam Deputy Speaker, and happy new year.

The apparent tax credit cut U-turn performed by the Chancellor at the autumn statement appeared at the time to be a victory for common sense and the vigorous campaign fought by my colleagues in this place and in Holyrood, and by Labour, Plaid and the Greens. But as the dust settled on the much-hyped U-turn, it appears now that all the Chancellor did was delay the pain of those tax credit cuts and transfer much of them into universal credit, specifically the work allowance. The House of Commons Library briefing on the subject states:

“The work allowance reductions announced in the Summer Budget will ultimately have a similar impact to the changes to tax credits which are not now going ahead”.

So low income working households in Airdrie and Shotts and across these isles are still going to suffer painful cuts from this austerity-obsessed Government, and those low income families are again going to be asked to pay the price for economic failures not of their making. The cuts have just been deferred, deflected and dished out by other means.

Yet again we must ask how these cuts can possibly chime with the Government’s claim that they want to make work pay or with the aim of universal credit—that “work pays and more work pays for everyone”. Well, work will not pay for those on universal credit who are due to see their incomes cut by up to £3,000 a year, according to the House of Commons Library—£3,000 less for a single parent or a family before housing costs are considered, where one or both adults are disabled. These people are working hard, paying their taxes and are now to be hammered yet again.

The Minister said that he wanted a change to the cycle of taking money from low income workers and giving it back through social security. He is achieving that change, but now the Treasury will just take and not give back. Government Members may well suggest that the shortfall can be made up by working extra hours. The Work and Pensions Secretary has already suggested that, but for those with a disability which makes it possible to work but impossible to work full-time, or for someone with caring responsibilities who can work only part-time, or for those whose employer cannot afford to give them extra hours, this cut will be an unfair punishment for this Government’s flawed and reckless obsession with austerity at any cost.

The despicable suggestion that all those who are about to have their incomes cut can just pick up some overtime here and there goes to show how desperately out of touch Tory Ministers and, on the evidence of this debate, a great many Government Back-Benchers are. They do not have a clue about how people on low incomes get by or how devastating an impact these cuts will have.

If the Government were serious about reducing welfare spending, they would be creating more job opportunities and truly dealing with barriers to employment, particularly for the disabled and mentally unwell. Instead, we see savage cuts to social security support directed at those finding it most difficult to get into work—the universal credit work allowance and the employment support allowance work-related activity group are perfect examples. These benefits, which help those in need of extra support to get back into work or to stay in work are being slashed to ribbons by this Government. I hope the Government will heed the call from my hon. Friend the Member for Banff and Buchan (Dr Whiteford) in her excellent speech and publish an impact assessment.

We must remember that these cuts are being made out of choice, not necessity. The Tory Government should be refocusing their priorities for spending cuts elsewhere, not on poor and low-income families.

I hope we will see a similar rear-guard action from the Tory Back Benchers who spoke out against the tax credit cuts and that they will oppose these cuts to the universal credit work allowance. The House of Commons Library says the cuts to work allowance will have the same impact as the cuts to tax credits.