Universal Credit and Working Tax Credits

Rachael Maskell Excerpts

Wednesday 15th September 2021 Commons Chamber

[Jonathan Reynolds]

I will tell the hon. Member about the real people. There are 7,700 families in his constituency whom this cut will affect, and the decisions the Government will make—[Interruption.] I am not going along with Conservative Back Benchers trying to tot things up and coming out with them in the middle of a debate. No, let us talk about the real impact on the 7,700 families in his constituency. The message he should be considering is: what will happen to his local economy and what will happen to national finances by taking that money away from them? This is a very important point.

[Rachael Maskell (York Central) (Lab/Co-op)]

Some 7,850 of my constituents will in three weeks’ time also lose £20 a week. Does my hon. Friend agree that the real cost will be the impact on people’s lives—the lost opportunities for those children’s futures and the hopes we all carry? Is it not right that we invest in people, not see this as a cut in itself?

[Jonathan Reynolds]

Absolutely. That investment in people is essential, and this uplift that we are talking about today cannot be considered without remembering the benefits freeze that lasted for four years prior to 2020. As the former Secretary of State, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), has said, the uplift only really restored what the value of UC would and should have been.

The pandemic exposed what many of us already knew: that social security in this country had become so threadbare it simply would not have got us through the pandemic. Since 2010 there has been unprecedented growth in in-work poverty in the UK, and food banks have become the norm in every town and city. No constituency has been exempt from that, and, most of all, one in eight working people in the UK is currently living in poverty. So the Government should not be seeking to congratulate themselves on making this uplift during the pandemic; they should ask themselves why they let things get so bad to begin with.

There was another laughable moment in Question Time on Monday when the Secretary of State compared the Government’s response to that of the Labour Government after the global financial crisis. Back in 2008 there was a functioning and supportive welfare state: tax credits acted as a superb automatic stabiliser; Jobcentre Plus had already been created, bringing together the old social security offices with the jobcentres, which all Governments since have recognised as a huge strength; unemployment did not hit 3 million, as initially predicted; and initiatives such as the future jobs fund played their role. So that Government had already done the hard work back then, and that is the lesson this Government need to learn.

As many Members have said, great as the impact on families is, we also have a responsibility to consider the impact of this on the country as a whole. The money we are talking about is spent in local shops and on local services, the very businesses that have had such a tough time because of the necessary public health restrictions most of us here backed for good reasons.

The recovery is promising, but it is not a done deal and there is a lot of ground to make up. This is the wrong decision for the economy and it also fails to learn the lessons from the pandemic and build the resilience we need as a country to face future challenges.

--- Later in debate ---

[Dr Coffey]

The right hon. Lady is right to praise care workers, who played an important part during the covid pandemic. It is my understanding that half a billion pounds of the health and social care levy, which was passed yesterday—the Opposition voted against it—will go to supporting the workforce in the care industry, recognising aspects of skills and pay. I want to put across to the right hon. Lady that we know—there is evidence on this—that where both parents are working full time, 97% of those households are not technically in poverty. That is why we have such emphasis. Households with children working part time are more likely—substantially higher, closer to 42%—to be in poverty. Frankly, five times the rate of people who do not work at all—workless households—are in poverty compared to those who are working. That is why we have worked really hard to reduce the number of workless households. I think there are 650,000 fewer workless households, lifting children out of poverty.

[Rachael Maskell]

Will the Secretary of State give way?

[Dr Coffey]

I will make some progress if the hon. Lady will allow.

We know that the best way to get more pounds into people’s pockets is through work. Those of us on the Conservative Benches believe in a welfare safety net, not a welfare trap, where it feels the Opposition are keen to keep people. We know that work and progressing in a job is the best route out of poverty, and I have spoken about parents working full time. That is why the Government, having provided unprecedented support during the height of the pandemic, are now right to focus on helping people back into work and helping those already in jobs to progress in their career.

Although the legacy benefits system penalised people for taking on more hours, universal credit ensures that working always pays. We got rid of the cliff edge that was part of working tax credits where people were penalised for working more than 16 hours and of the other cliff edges. I repeat that that is why we have UC work allowances focused on people with children or with limited capability to work, so that they can keep all the extra money that they earn until the allowance is used.

[Rachael Maskell]

I am grateful to the right hon. Lady for giving way. She says that universal credit is responsive, but when she announced this cut, we did not know that there would be a 3.2% increase in inflation. My constituents are in work; it is just that the cost of living in York is exceedingly high. This proposal will hit them significantly, so will she take it back and reconsider in the light of inflation rising?

[Dr Coffey]

The hon. Lady represents a beautiful city—a magnificent city—and she will know that the jobcentre and our work coaches are working hard there with the communities. In lifting the local housing allowance rates, we made nearly a £1 billion investment, and we have maintained that in cash terms to recognise some of the costs of housing, which are truly challenging in very popular areas such as hers, and I am sure that she will welcome that.

We are making the most of our 13,500 extra work coaches. Right across the country, we have doubled our jobs army, which is helping people to get into work and to progress in work by accessing skills and job schemes. Our plan for jobs employment programmes are providing tailored support to help more people to move into and progress in work.