Universal Credit and Working Tax Credits

Peter Aldous Excerpts

Wednesday 15th September 2021 Commons Chamber

[Peter Aldous (Waveney) (Con)]

At the start of the pandemic, the Government were right to move very fast, without any prompting, to introduce the £20 uplift to universal credit. Now that we are hopefully in the tail end of the pandemic, it would be wrong to hastily remove the uplift. Yes, there is a need to be fiscally responsible and balance the books, and thus policies are being introduced in this September sitting that sit uncomfortably with many of us. However, at the same time we have a duty and a responsibility to protect those on the lowest incomes and the most vulnerable in society. All the evidence shows that a sudden reduction in income of this magnitude will hit a lot of people very hard.

Before the introduction of the uplift, the annual uprating of universal credit had been frozen for four years. Now, looking forward, families are faced with rising costs on all fronts: food up; fuel up; rent up; childcare costs up; and getting to work, particularly in East Anglia, a real challenge. The rise in housing costs in particular is driving in-work poverty. For those in work, for those unable to work and for those between jobs, universal credit should allow people to live with some dignity without descending into spiralling situations of poor mental health, debt and poverty.

The introduction of universal credit over the past 10 years has been incredibly challenging, but, when it was really needed during the pandemic, it worked incredibly well. No sensible voices are now calling for it to be scrapped. What we now need to do is to complete the task of welfare reform. The best way to do that is to retain the uplift, which is targeted at the poorest, helps people to stay afloat and then enables them to make positive decisions to improve their circumstances and to improve their lives.

We are fortunate, as we have heard, that there is a strong jobs market at the moment, but, unfortunately, there are people who are too far away from the labour market to take immediate advantage of these opportunities. Our welfare system should provide them with stability and security so that they can acquire the skills to move into work and then to climb up the ladder to rewarding and better paid jobs.

Universal credit has been the flagship of the Government’s essential work to reform welfare. The scale of the task means that there are still many challenges to overcome to ensure that it works for everyone. The pandemic has put the system through the sternest of tests and it has worked well. We now know that it can cope under crisis and, with an increase in support, it is a system that can better protect families when they face hardship.

At the current time, we face challenges unprecedented in peacetime. In economic terms, these are: building back better from the pandemic; levelling up, so that all corners of our four countries can share the proceeds of growth; and eliminating that stubbornly wide productivity gap.

Investment in infrastructure is important, but what transcends that, and what is absolutely critical, is investment in people. Retaining the uplift will help prevent many people from falling into poverty and despair. It will also provide the platform from which families can plan for better futures and then realise their aspirations. As a society, and as an economy, we will all be better for that.