Universal Credit Work Allowance

Debate between Owen Smith and Craig Williams

Wednesday 6th January 2016 Commons Chamber

[Owen Smith]

Does the hon. Gentleman not understand that what we have argued here today is that after the cuts, which we are urging the Government to reverse, 6,000 people in his constituency will be worse off in 2020 than they would have been? It is very simple.

[Craig Williams]

I do not accept that. The shadow Secretary of State would have a lot more credibility if he came here with an idea of how to change the system and practical approaches rather than just opposing everything that this Government try to do. The previous Labour Government failed this country and failed constituents in Cardiff North. We are creating the opportunities. We need only look at the Labour Welsh Government to see their track record at creating opportunities. I stand by this Government and these changes.

[Owen Smith]

What about employment in Wales?

[Craig Williams]

Thanks to the UK Conservative Government—I thank the hon. Gentleman.

Not only does the universal credit system encourage people into work, it supports them through the process, staying with them and working with organisations such as Reed in Partnership, to which I pay tribute. Just before Christmas, it produced a survey of young people about the barriers to getting into work. The main things they said were about the importance of consistent career advice and the effects of receiving poor advice. These work coaches will really change things round for youth opportunities because someone will be dedicated to looking after people throughout the whole journey. I really welcome that. The Opposition should not be quite as jovial about this concept, which is a game changer.

The new system gives claimants the confidence to start a job without having to go through the bureaucracy of changing their benefit claim. We need to appreciate the transformational element of universal credit. Ninety per cent. of people who have already signed on did so online. This is a massive change in the way that we operate our welfare system, and it is extremely welcome. As I said, it is being rolled out in a very careful, safe and controlled manner. The Minister touched on that, but it is worth dwelling on. The findings from the December 2015 “Universal Credit at Work” report show us that, as we have heard, 71% of universal credit claimants moved into work in the first nine months of their claim. That compares with 63% of jobseeker’s allowance claimants. Universal credit claimants work on average 12 days more than comparable jobseeker’s allowance claimants. We need to recognise that and work on it, and provide proper support to ensure that people can achieve their ambitions and do not remain trapped in an unfair system, which is what the previous system was.

As part of that, we have put in place further measures that are directly related to the changes to the work allowance. The transitional arrangements are in place and they ensure that the benefit entitlements of claimants who are migrated on to universal credit by the Department for Work and Pensions—it is worth emphasising this again—do not fall in cash terms.

As I have hinted at, I want to dwell on the tapered relief for universal credit, which remains at 65%. I want to say that over and over again, because the shadow Secretary of State gave us smoke and mirrors. Unlike the planned tax credit changes, which would have resulted in an increased taper, the savings are achieved without increasing the effective marginal loss of benefit for every pound earned as a claimant moves into work or takes more hours. That means that work incentives are not adversely affected.

I am aware that you want to get everyone in, Madam Deputy Speaker, so I will conclude on that point. This really is a massive transition from the system that the last Labour Government presided over, which is not fit for purpose, sustainable or affordable for this country. I welcome the changes and the universal credit roll-out. As a member of the Work and Pensions Committee, I will pay particular interest to the issue and be a critical friend, but I welcome the roll-out so far.

Welfare Reform and Work Bill

Debate between Owen Smith and Craig Williams

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

My hon. Friend speaks with enormous experience and expertise, and she is completely right. As I said earlier, tax credits are a policy success. In 1997, 43% of single parents in Britain went out to work; today, the figure is 65%. There has been a 50% increase in the number of single parents who are in work, and that is a measure of the success of tax credits.

[Craig Williams (Cardiff North) (Con)]

rose—

[Owen Smith]

I will give way in a moment to the hon. Gentleman, who represents a great city—a working-class city—but before I do so, I ask him to reflect on the views of one of his colleagues, the hon. Member for Plymouth, Moor View (Johnny Mercer), who said last week that

“it would be remiss of me not to recount the extraordinary levels of feeling in Plymouth last weekend. This bright, vibrant, exciting and…blue collar city, where in the last general election we saw lots of new and first-time Conservative voters, has serious objections to the tax credit reforms.” —[Official Report, 20 October 2015; Vol. 600, c.882.]

The hon. Gentleman knows, and I know, that that stands for his constituency in Cardiff too, and I hope he will reflect on it when he addresses the House.

[Craig Williams]

The hon. Gentleman has talked about policy success. Cardiff truly is a working people’s city. Will he comment—so far, he has not done so—on the Government’s leadership on the national living wage? What would he say to the staff of Morrisons, Costa Coffee, Sainsbury’s, Lidl, British Gas and IKEA, who are already benefiting from those companies’ attempts to follow the lead taken by this Conservative Government and match the living wage?

[Owen Smith]

I know that the hon. Gentleman is relatively new to the House, but he really ought to be present for the beginning of debates. I said at the start of my speech, and indeed on two other occasions, that I welcomed the Government’s moves. I applaud them for what they are doing in increasing the national minimum wage, although I repeat that it is utterly bogus to describe it as a national living wage. It is not a national living wage, which is why the Living Wage Foundation will not describe it as such. I wish that the Government would give us a true national living wage, in London and elsewhere.

The hon. Gentleman has, in his wealthy, leafy part of Cardiff, more than 3,000 constituents who benefit from tax credits. I ask him to look into his heart and reflect on whether it is right, for whatever purpose—ideological or economic—to ask those hard-working families to pay this bill. It is not fair, it is not just, and I do not think that it should go ahead.