Oral Answers to Questions

Owen Smith Excerpts

Monday 7th December 2015 Commons Chamber

[Mr Duncan Smith]

I know how hard my hon. Friend campaigns to get employment up in her constituency. I am more than happy to come and support her to show that more people are getting jobs as a result of our welfare changes. Unlike the previous Government who spent money and changed very few lives, we are spending less money but changing more lives for the better.

[Owen Smith (Pontypridd) (Lab)]

The Secretary of State said yesterday that “nobody will lose a penny” under his changes to universal credit, which was a surprise to me. On Friday, the Office for Budget Responsibility published a report showing that the Government intend to cut £100 million from the universal credit work allowance next year, £1.2 billion the year after that, and then £2.2 billion, £2.9 billion and £3.2 billion by 2020. By my count, that is a trillion pennies. Will the Secretary of State clarify his remarks and tell us precisely which workers are going to lose them?

[Mr Duncan Smith]

I just wish the hon. Gentleman would actually go and visit a universal credit site to see the huge difference it is making. In answer to his question, as the IFS said

“no family will take an immediate…hit”

from being moved on to universal credit. [Interruption.] Hold on a second. I remember that it was the Labour party that got rid of the 10p tax starting rate and did not cash protect anybody at all. We are transitionally protecting those who are moving on to universal credit. Maybe the hon. Gentleman is against that. If so, would he like to say why?

[Owen Smith]

Again, the Secretary of State says this Budget made no changes. He is right, because the changes had already been passed in the summer Budget and in the statutory instrument. The truth is that the Chancellor bailed himself out of the hole he dug on tax credits by raiding the universal credit system, creating a deeply unfair two-tier system. A working mother on universal credit will next year be £3,000 worse off than her equivalent on tax credits. In all, 2.6 million families will be £1,600 on average worse off. It is the new IDS postcode lottery: it is arbitrary, it is unfair, and if you are a low-wage working mother, it could be you.

[Mr Duncan Smith]

The hon. Gentleman’s party, which opposed universal credit from the outset, can hardly say that it is the slightest bit interested in how it works. The reality is that all those calculations for lone parents do not take into consideration—[Interruption.] No, they don’t. The childcare package that comes with universal credit is dramatic. Unlike tax credit—[Interruption.] Perhaps he would like to just keep quiet and listen for once to somebody who knows what they are talking about. I say to him very simply that the childcare package for universal credit gives parents with children childcare support every single hour while they are in work. Under tax credit, they got next to nothing.