Universal Credit (Children)

Peter Heaton-Jones Excerpts

Tuesday 10th May 2016 Commons Chamber

[Peter Heaton-Jones (North Devon) (Con)]

I echo the words of the right hon. Member for East Ham (Stephen Timms). The Backbench Business Committee has, properly, allowed this debate and he has introduced it very wisely indeed.

In my mind, there is a difficulty with the motion as it currently stands on the Order Paper: it seeks to look at universal credit in isolation. That is a problem, because what we need to consider is the entire package of measures the Government have introduced with regard to changes to benefits and very significant movements forward in seeking to tackle child poverty. We need to look at all of those measures in the round and as a whole, and not focus solely on universal credit. The package of measures we need to be thinking about are the increases in the personal tax allowance, the introduction of the national living wage and better childcare provision, which goes to the heart of what this debate seeks to address.

[Neil Gray (Airdrie and Shotts) (SNP)]

The hon. Gentleman talks about needing to take these issues in the round. Does he accept that in February this year the IFS predicted that, taking all issues in the round including planned tax and benefit reforms, child poverty will increase from 15.1% in 2015-16 to 18.3% by the end of this Parliament?

[Peter Heaton-Jones]

I am glad the hon. Gentleman mentions the IFS, because it also said that

“universal credit should make the system easier to understand, ease transitions into and out of work, and largely get rid of the most extreme disincentives to work or to earn more created by the current system.”

The IFS seems to quite like the introduction of universal credit, which has to be looked at in the round. The Government are introducing a whole package of measures. I listed some of them. The growing economy and rising employment also help.

The other issue that is not taken into account when we consider universal credit is what is sometimes referred to as the dynamic impact—a horrible bit of jargon—of universal credit. This seeks to take into account changes in individual behaviours in response to the introduction of universal credit. It is quite difficult to analyse but it means improved opportunities for people to move from welfare into work, which changes people’s behaviours. This is a vital point. Even though it is in its early stages of introduction, as pointed out already, there is significant evidence that universal credit is doing well and succeeding at ensuring that more people move off welfare and into work. The latest figures show that for every 100 people who found work under the old jobseeker’s allowance system, about 113 universal credit claimants move into a job. What matters, however, is not just the fact of moving into a job but the quality of the job and the pay, and people are actively looking to increase their hours and their earnings as well.

[Jeremy Quin]

Does my hon. Friend, like me, welcome the emphasis on in-work progression? The story does not end when someone happily gets into a role. It matters also that they are encouraged through Jobcentre Plus to improve their hours and their standing in the firm and get paid more over time.

[Peter Heaton-Jones]

I absolutely agree with my hon. Friend. That is important, and the latest figures show that 86% of claimants on universal credit are actively looking to increase their hours, which compares to 38% under JSA, which is a significant difference. People are actively looking to increase their earnings as well, which goes to the heart of his point. Some 77% of those on universal credit are actively looking to increase their earnings, compared to 51% on JSA. That is a really important part of the universal credit package.

[Mark Durkan (Foyle) (SDLP)]

Is the hon. Gentleman really trying to tell us that the dynamic impact will compensate for the loss of income that families, particularly those with disabled children, will suffer under the universal credit changes?

[Peter Heaton-Jones]

The hon. Gentleman leads me on to talk about children in particular—the essence of the issue the motion seeks to address—so let us talk about what the Government are doing to reduce child poverty. The latest households below average income statistics show that child poverty in the UK remains at its lowest level since the mid-1980s—the lowest for 30 years. The number of workless households has fallen by about 750,000 since 2010 and—this is the crucial point that goes to the heart of it—there are nearly 500,000 fewer children living in workless households.

The Government, therefore, have a good and sound record on reducing child poverty and targeting the welfare system very carefully at those who need it the most. That is the key to what universal credit seeks to do. The hon. Member for Foyle (Mark Durkan) mentioned young children. The Government have invested £2.5 billion in the troubled families initiative and the same amount again in the pupil premium, which provides extra funding for the most disadvantaged children in school. And here is a measure we do not hear much about from the Labour party: income inequality is down under this Government.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

indicated dissent.

[Peter Heaton-Jones]

That is what the statistics show. It is important to remember that the Government are having some success.

I want to touch on the Government’s announcement of the introduction of the new and significantly strengthened approach to the life chances of Britain’s most disadvantaged children. I sat last autumn through 17 sittings of the Bill Committee for the Welfare Reform and Work Act 2016, along with the Minister and other hon. Members I can see today on both sides of the House. For those who were not there, this was a very important part of what the Committee discussed. The Act seeks to ensure that the life chances of the most disadvantaged children are front and centre in all the welfare reforms we seek to introduce. That will be central to our one nation approach over the next five years. Ministers are committed—I have heard them say it several times—to this much more effective measure focused on the real causes of poverty.

I repeat, however, that we need to look at this as a whole. I am not saying that this debate is not worthwhile, but I question the wording of the motion and the fact that it merely isolates universal credit. We need to look in the round at all the measures and welfare reforms that the Government have introduced and which amount to a significant and beneficial package of reforms.

[Stephen Timms]

rose—

--- Later in debate ---

[Peter Heaton-Jones]

If the right hon. Gentleman will forgive me, I am coming to a conclusion.

I understand the concerns that the right hon. Gentleman has raised and which the motion seeks to address, but having sat through the Bill Committee, I think that universal credit will bring longer-term benefits. It needs to be seen as part of a package of measures. I am not for one minute saying it is not important that we look at how children are being affected by these measures, but I know that the Minister is addressing the matter and that the Government have put the effect on children at the heart of their full package of welfare reforms. We want to ensure that those effects are beneficial. I believe that they will be and that the Government are moving in the right direction.