Universal Credit: North-West

Nick Thomas-Symonds Excerpts

Wednesday 13th January 2016 Westminster Hall

[Graham Evans]

I am most grateful for that intervention; my hon. Friend makes a very powerful point. As I have said, jobcentre staff say that the changes that the Government have introduced to simplify welfare and benefits, and the incentive to work, enable those people who are unemployed to get into work quickly. And for long-term unemployed people who have been on benefits for many years, there are now clear incentives to get into work, because they will keep more of the money they earn; universal credit enables them to keep more of what they earn.

[Nick Thomas-Symonds (Torfaen) (Lab)]

It has emerged clearly from this discussion that there needs to be greater awareness of the cuts to the universal credit work allowance that are coming in this April. Let me just give the example of a single parent—say, a single mother—with one or more children. That allowance will be halved from April from £8,808 to £4,764, which is a reduction of £4,044. In cash terms, that working mother will lose £2,628 from this April. How on earth is that an incentive to work?

[Graham Evans]

We have to look at the whole scheme. We have to look at the fairness to those in receipt of welfare and benefits, but what we never hear about from Labour Members is that the scheme has to be fair to the people who pay for it, who are the hard-working taxpayers. If we look at people who are working—[Interruption.] I know it is controversial to talk about the people who actually contribute and pay for welfare, but we have to look at the people who make the decisions to work hard and work full-time. The examples that people always look at are of people who work part-time, and their income is topped up. Well, we have to look at the decisions of people who work hard every day. They have to work full-time—work, work—and make those decisions and pay taxes, which go into the welfare system.

--- Later in debate ---

[Nick Thomas-Symonds (Torfaen) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Nuttall. I warmly compliment my hon. Friend the Member for St Helens South and Whiston (Marie Rimmer) both on securing the debate and on the dignified, cogent and passionate way in which she put her case this morning.

The hon. Member for Weaver Vale (Graham Evans) spoke well about the staff to whom he had spoken at a Jobcentre Plus office in his constituency. My hon. Friend the Member for Makerfield (Yvonne Fovargue) made an excellent speech, drawing on her experience at Citizens Advice in the 1980s and speaking powerfully about the sad explosion in the number of food banks in this country since 2010.

I am grateful to my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) for his speech, in which he spoke well about the complexity of the modern economy. He made a powerful point about our need to draw on experience, and any well thought out, coherent and simple policy is to be welcomed. I may even give him a shorter book to read in due course. There were also interventions from my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) and the hon. Members for Congleton (Fiona Bruce), for Cheadle (Mary Robinson), for Bolton West (Chris Green), for Strangford (Jim Shannon) and for Ribble Valley (Mr Evans).

Much of today’s discussion has been about the language with which the debate is conducted, and I am extremely concerned about the language framework that the Government use. The Chancellor of the Exchequer said on the “Today” programme on Monday 8 October 2012:

“It is unfair that people listening to this programme going out to work see the neighbour next door with the blinds down because they are on benefits.”

Those are his actual words. He presumably thinks that that type of stuff is popular at the Tory conference. The real problem with that sort of language is how divisive it is. There is no sense that the person behind those blinds might be vulnerable or disabled. The Minister has an opportunity today to condemn such divisive language, and I sincerely hope that she feels able to do so.

Even if one accepts the abysmal logic, which I do not, the real problem is that the Chancellor is so lost in tactical mazes of his own construction that he is actually on the wrong side of his own dividing lines. He is attempting to separate people into the workers and the non-workers—that is precisely what he was trying to do in that quote. However, what we saw with the cuts to tax credits, which the Chancellor eventually caved in on, we are also seeing with the cuts to the universal credit work allowance from this April.

[Mr Nigel Evans]

What was appalling under the previous Labour Government was the high level of unemployment, which meant more people spending time with the blinds down. Under this Government, employment has reached record levels, unemployment has dropped, and far more people are earning more money than ever before. Is that not bringing dignity to the British people?

[Nick Thomas-Symonds]

I will come to people earning more than ever before in a moment. I make no apology for a Government who introduced the national minimum wage or for wage growth in the Labour years. This decade risks becoming the lost Tory decade, with wage growth lower than at any point since the 1920s.

The hon. Gentleman wants to talk about money in people’s pockets. I have already spoken about the effects of the cuts to the universal credit work allowance on single parents from this April, so shall I use some other specific examples? Take a couple, living and working together, one or both of whom has limited capacity to work as they are disabled. For them, the work allowance will be cut from £7,700 to £4,700, a loss in income of £3,000. That is for people who are actually in work. To take another example, single individuals will essentially lose everything, with a reduction of £1,332, at a net loss to income of £865.

When universal credit is damaging and attacking people in work, it is in danger of undermining the aims that it was set up to achieve. If Government Members do not want to take my word for that, let us take the word of the Social Mobility and Child Poverty Commission’s “State of the nation 2015” policy paper, published on a big date for dumping things just before Christmas, 17 December 2015. The paper is available on the Government website if any Members want to see it. The commission stated:

“The immediate priority must be taking action to ensure that the introduction of Universal Credit does not make families with children who ‘do the right thing’ (in terms of working as much as society expects them to) worse off than they would be under the current system. That means reversing the cuts to Universal Credit work allowances enacted through the Universal Credit (Work Allowance) Amendment Regulations 2015 before they are implemented in April 2016.”

That is what the commission says should be the priority from this April.

[Graham Evans]

The hon. Gentleman is right to point out that the Labour Government introduced the national minimum wage. I supported that outside this place, as did many of my Conservative colleagues. This Government, however, are introducing a national living wage and—this is the key thing, which is lost on the Opposition—are keen for people to keep more of their own money. That is why the personal allowance has increased, taking the lowest-paid out of income tax altogether. He might remember Gordon Brown’s fiasco with the 10p tax rate, which penalised the lowest-paid workers in the country. The system is complicated, yes, but the underlying mantra is that it always pays to work. Getting low-paid people out of tax altogether is the best way of doing things, so that they keep more of their own money.

[Nick Thomas-Symonds]

I am interested in history, as the hon. Gentleman might know, but I do not recall the Conservative party in the 20th century supporting a national minimum wage. His personal view might well have been different, but I do not recall his party voting for a national minimum wage—rather, at the 1997 election I remember the Conservatives saying that it would cost jobs. They seem to have changed their position significantly since, which is to be welcomed.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Almost 20 years ago.

[Nick Thomas-Symonds]

If the Parliamentary Private Secretary wishes to intervene, he is welcome to do so.

--- Later in debate ---

[Mr David Nuttall (in the Chair)]

Order.

[Nick Thomas-Symonds]

Perhaps the hon. Gentleman has special permission—I will take it up with him another time.

Another unfortunate pattern is the Conservative party putting forward various mitigations for its Government’s cuts. The latest one was on 6 January, when the Under-Secretary of State for Justice, the hon. Member for North West Cambridgeshire (Mr Vara), tried to defend the cuts to the work element of the universal credit, saying,

“let us not forget, the fact that every time we fill up our tank with petrol there is a saving of £10 because of the freezing of the fuel duty.—[Official Report, 6 January 2016; Vol. 604, c. 342.]

Back in the 1980s the Conservatives’ answer to the unemployed was, “Get on your bike,” but in 2016 it seems to be, “Fill your car.” That is the level of debate we have reached.

Confidence in the roll-out is another enormous issue, as my hon. Friend the Member for St Helens South and Whiston indicated. Let us not forget what the Secretary of State for Work and Pensions said in a press release on 1 November 2011:

“Over one million people will be claiming Universal Credit by April 2014.”

The actual number reached by November 2015 was 155,568. The hon. Member for Weaver Vale said with delicious understatement that that was not perfect. I have to agree—less than one fifth of the target had been reached. According to the independent Office for Budget Responsibility, the number will not exceed 1 million until April 2018, four years late. Does that not show the situation that we are in today? Given the cuts to the work element of universal credit and the sheer scale of incompetence with the roll-out, are we not in the worst of all worlds, where the Government lack both compassion and competence?

--- Later in debate ---

[Nick Thomas-Symonds]

Lord Freud has said that there will be an automatic movement from tax credits to universal credit in two situations: “repartnering” and a

“new member joining the household”.

Will the Minister confirm that, if someone gets married or has a child, they will be moved from tax credits to universal credit?

[Priti Patel]

We are clear that people being moved on to universal credit from tax credits will be supported and will not lose out. A fundamental principle of universal credit is that it removes barriers that may have existed and, importantly, it gives people the support they need when they come on to it. That is different from previous systems. It is different from tax credits, for example, which did not provide support for people when they wanted to increase their hours and earnings.

The previous system was fragmented and there was little incentive for people to take up even a few more hours of employment, but under universal credit people can benefit as soon as they start to work. It is a simpler system to understand. It comes back to the point that we have support in our jobcentres to help people to extend their hours of work or, when they are moved on to universal credit, to understand the system and support them.

That is different from what existed before. Under universal credit, no one will have to worry about the Government asking for money back because the real-time information system connects the employer and Her Majesty’s Revenue and Customs on the number of hours worked. That is dramatically different from the situation when tax credits was introduced and millions of low-income families faced uncertainty about owing money back to HMRC at the end of the year. I am sure all Members have dealt with many examples of casework in that area.

I want to come on to the points raised, because I am conscious of time. There is evidence that universal credit is getting people into work and helping them stay in work. We have reviewed universal credit and, as a result of the support that people are given, we see that they spend 50% more time looking for work. We now see more universal credit claimants moving into employment compared with JSA claimants thanks to the focused support they get through their single point of contact, their work coach and other means.