Universal Credit

Debate between Patricia Gibson and Gareth Johnson

Wednesday 17th October 2018 Commons Chamber

[Gareth Johnson (Dartford) (Con)]

Let me say at the outset that I do not claim that everything about universal credit is perfect, or that everything has gone according to plan. I think it is inevitable that such a huge reform will involve issues that will need to be dealt with. To suggest that it should be scrapped, however—as the hon. Member for Garston and Halewood (Maria Eagle) has just done—is to risk losing the significant benefits that it has brought about. We should not be in the business of throwing the baby out with the bathwater, but that is precisely the attitude of those who say that this whole benefits system should be scrapped.

It is worth noting why it was necessary to bring in universal credit and to consider where we have come from. Under the last Government, we had a system that was confusing, bureaucratic and unfair, and ensured that people did not receive the benefits to which they were entitled. Indeed, that was factored into the budget of the DWP, which knew that the system was so complicated that it would not have to pay out the money that it would otherwise have had to pay out. Those arrangements also led to the worst aspect of the system, which was that it prevented people from working.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

The hon. Gentleman is telling us about the faults of the previous system. Single parents are particularly hard hit by universal credit: cuts in the work allowance mean that the average parent loses about £800 a year, and some lose up to £2,000 a year. Given that 91% of single parents are women, this system discriminates hugely against women. Does he agree that that is unfair and should be addressed?

[Gareth Johnson]

I do not agree. There have been these transitional protections that we need to have in place. I am not saying that every aspect of universal credit has been correctly implemented—I do not think anyone is claiming that—but I think it is right that we try to ensure that people are better off under this system and that it is a fairer system. Most important, as I have said, is that it should enable people to work.

Under the previous system, I lost count of the number of times people said to me, “I cannot afford to work.” They used to say that they could not possibly get a job even though they would love to do so because they would lose their benefits as a consequence. That was as frustrating as it was wrong. It trapped people into staying on benefits and ensured that people got out of the habit of working. The best way out of poverty is through work and we need a benefits system that allows for that, and we did not have that under the previous Administration. What we saw was excessive tinkering, which added to the confusion surrounding benefits. Myriad different types of tax credits were introduced and abolished during that time; it was described at the time as being like a gardener going around pulling up plants to see if the roots were still there. That is how complicated the system was that we had to take over. We needed change and we had the courage to bring about that change. We should take the credit for having done so.

The strength of universal credit is that it simplifies things and encourages work. Benefits should mirror the working world. That is why it is right that most UC payments are monthly; most salaries are paid monthly. It should provide a way back into work and not provide a way of life.

One major test for UC is whether it is helping people get back into work. The answer to that is an emphatic yes. We have seen huge increases in employment. Youth unemployment is at its lowest rate ever and wages have exceeded inflation every month for the last seven months. Part of the reason for this is that we have a benefits system that facilitates work. We were told—I think it was Ed Balls who said this—that our policies would result in unemployment going up by 1 million, but the contrary is the case: employment has gone up by 3 million as a consequence of our policies. No one is claiming that the system is perfect—I am certainly not—but it is a massive improvement on what we previously had, so is well worth keeping.

One of the reasons we have low unemployment in the UK while it is much higher in other countries, particularly on the continent, is that we have a benefits system that allows people to get back to work. Yet some people inexplicably say that that system should be scrapped.

I will cut my comments short now, as I am running out of time. Care and consideration are needed during the rest of the implementation of UC. It needs to be done and it needs to be adequately funded. I ask the Minister to be cautious in doing this. We must not be complacent about it, but we should not scrap UC, as we have been asked to do.