Universal Credit

Neil O'Brien Excerpts

Wednesday 17th October 2018 Commons Chamber

[Neil O’Brien (Harborough) (Con)]

The case for UC long predates this Government. Opposition Members will recall that Labour welfare Secretary James Purnell proposed something very similar in 2008, and the Institute for Fiscal Studies called for the same thing. Why was there that consensus? Why is this the right thing to do? It is because we had a system that had grown up in a piecemeal way over time, and that had led to perverse consequences. In particular, large numbers of people on housing benefit and tax credits were losing 90p in every extra pound that they earned. There were mad situations, such as the one trapping people on 16 hours a week because there was no incentive to earn more. I know some of those people and it is good that we are fixing that problem through UC.

One SNP Member disputed the idea that UC was improving work incentives, so let me tell him what the IFS says. It says:

“UC will still strengthen work incentives overall. Importantly, UC will have the welcome effect of strengthening work incentives for groups who face the weakest incentives now: the number of people who keep less than 30% of what they earn when they move into work will fall from 2.1 million to 0.7 million.”

So we are talking about a huge improvement; UC is breaking that welfare trap. The hon. Member for Garston and Halewood (Maria Eagle) said we should scrap UC, but, with respect, I do not think even the more sensible Members opposite believe that.

UC is one reason why we are seeing more people moving into work and we have record employment. It is why youth unemployment has been halved under this Government and 3.3 million more people have been helped into work.

[Stephen Kerr (Stirling) (Con)]

Let me add a significant statistic: there are more than 800,000 vacancies in this country, so the opportunities to go even further in terms of employment are there before us—it is a great prize.

[Neil O’Brien]

High employment helps lots of different groups in our society, and so we have record rates of employment for ethnic minority people and for lone parents, we have 600,000 more disabled people working and employment for women is at a record high. As a constituency MP, it is wonderful for me to have 3,000 extra people in Harborough working than there were when we came into office.

[Rachel Maclean (Redditch) (Con)]

I am sure my hon. Friend was about to mention that we also have record employment levels among another group—young people. We have record levels of youth employment now.

[Neil O’Brien]

My hon. Friend has taken the words out of my mouth; she has spiked my guns.

Of course we need to make sure we get this reform right, so I particularly welcome the move to restore the severe disability element within UC. As Ministers know, I have been in touch with them about that, and I hope we will pass the regulations to do it as soon as possible. I am glad the Department is spending an extra £1.5 billion ensuring that people can get the full amount paid up front, in order to make the system smoother. I am also glad it is solving some of the problems relating to the administration of the scheme, for example, by making it easier to get housing benefit paid directly to the landlord.

In some parts of this House, there seems to be a view that it is a measure of machismo to spend ever more on benefits, but we should reflect on what we inherited from Labour: nine out of 10 families, including Members of this House, were eligible for tax credits; people were getting more than £100,000 a year in housing benefit alone. That is why the welfare bill had increased by more than £3,000 per household. That is not a sensible way to run a country and it was not a good economic policy. It ended in not only national bankruptcy, but with a million extra people thrown on the dole under Labour. Labour Members should be ashamed of that record.

I am happy that we are now bringing in one of the highest minimum wages in the world. I am glad we are taking the lowest paid out of tax. That is the right approach, in order to lift people out of poverty. I am glad that members of our welfare team are listening to the important points made by colleagues such as my hon. Friends the Members for Amber Valley (Nigel Mills) and for South Cambridgeshire (Heidi Allen), who have continued to make the case for sensible reforms, in order to get right, rather than scrap for political reasons, an important reform that has powerful potential to improve the lives of people in our society.