Universal Credit Work Allowance

Debate between Owen Smith and Eilidh Whiteford

Wednesday 6th January 2016 Commons Chamber

[Dr Whiteford]

I have made that point already. We are talking about a change that is due to come in in April that will undercut work incentives. It will take the work incentive out of universal credit. The work allowance helps universal credit make work pay. It is the cornerstone of the system. If we take out that allowance, all we will have is another benefit trap like the one that it is trying to replace.

I wish to pick up on an issue raised by the hon. Member for Pontypridd (Owen Smith) earlier in the debate. In the Government’s response to the Social Security Advisory Committee’s “Occasional Paper 15” on universal credit, they said that they expect claimants to respond to cuts in the work allowance by “actively seeking more work.” From what we have already heard about the disincentives caused by high marginal rates of taxation, that is simply wishful thinking. The Secretary of State and Members on the Government Benches seem to be labouring under the misapprehension that people in low-paid jobs do not work as hard as people in highly paid jobs, and that somehow it is easy to pick up extra work—whether that is in the form of another wee job, or of more hours—but the reality is that low-paid jobs are often the most physically demanding, the most insecure, and the most exhausting.

Early yesterday morning, at the crack of dawn, when I was leaving Aberdeenshire, I passed roadworks where men were already trauchlin in the cold and the dark and the pouring rain—it has been raining incessantly—setting up their temporary traffic lights. Although they will not be on the minimum wage, they are certainly not high earners, and, doubtlessly, some of them will be part of families receiving tax credits or universal credit. I could not help but think how lucky I was to be able to work indoors at this time of year. Those manual workers are exactly the sort of folk who will be asked to find an additional job, or work extra hours after a long day outside.

[Owen Smith]

The hon. Lady is making an excellent speech. Does she agree that it is fundamentally offensive to those workers, and to all workers on a low wage, for the Secretary of State and his Ministers constantly to refer to the “dynamic” effects that will be introduced by this new system? Are these people who are working full time in the pouring rain undynamic?

[Dr Whiteford]

They were certainly showing a fair bit of dynamism yesterday morning. I was really glad that I did not have to work with them. I partly agree with the hon. Gentleman. The insecurity of the modern labour market means that people move in and out of part-time work more often that they did in the past. It is important that we create a system that responds to that. My problem is that the Government are undermining their own process with their transitional arrangements, but I will say more about that in a second or two.

There are people all over my constituency—and in everybody’s constituency—who work extremely hard already in low-paid, tiring and not exactly pleasant jobs that are neither interesting nor glamorous. They are often doing that while they are juggling family responsibilities, looking after children or, increasingly, elderly and infirm relatives. For many of them, taking on extra hours depends on that work not just being available, but being available at a time when they have access to childcare. Let us face it, young children cannot get themselves out to school in the morning. They may not be able to walk there safely on their own. They cannot just be left unattended at home for several hours after school or get their own tea. Many working parents have to juggle work and family commitments. Indeed, one reason why so many women are trapped in low-paid, low-skilled jobs, even when they have high-level skills and qualifications, is that they are the primary carer in their household and they are trying to fit work around their family responsibilities. The Catch-22, of course, is that it is a lot easier to do that juggling if they are in a well-paid job.

I have a very serious question for the Government that echoes the question posed by my hon. Friend the Member for Glasgow South West. Many of those who work in low-paid jobs in Government Departments, including in the DWP, receive tax credits or universal credit. Will their employer offer them a few wee extra hours to compensate them for the loss of their work allowance? Will the DWP specifically—I hope that Ministers can answer this one—offer extra hours to its own staff who are set to lose out, or will it impose in-work conditionality on them instead? If the Government cannot or will not commit today to supporting their own staff, they have no business putting the onus on other employers to miraculously conjure up extra work for people.