Universal Credit (Children) Debate
Full Debate: Read Full DebateDepartment: Department for Work and Pensions
Richard Graham
Main Page: Richard Graham (Conservative - Gloucester)Department Debates - View all Richard Graham's debates with the Department for Work and Pensions
(8 years, 7 months ago)
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Kate Osamor
I totally agree with my hon. Friend. There are many lone workers and people who have their own businesses in my constituency, and they have come to see me in my office to say that they are very concerned because they need to use benefits to top up their salaries. This is an issue that I hope the Government will take into account.
I conclude by asking the Minister to review the impact that work allowance reductions are having on working families, particularly single families. Secondly, will the Government agree to review annually the decision to freeze most key children’s benefits for four years?
Madam Deputy Speaker (Natascha Engel)
Were you here at the beginning of the debate, Mr Graham?
Richard Graham (Gloucester) (Con)
I am very grateful to you, Madam Deputy Speaker.
Today’s debate comes at an interesting time. The right hon. Member for East Ham (Stephen Timms) introduced it with his usual reasonableness on an issue of concern to everybody here. There are two or three points that I would like to highlight in a brief contribution. The first is the biggest strategic challenge for the right hon. Gentleman and his colleagues, which is where the balance of the strategy that Labour Members are trying to pursue will lead the country. I offer two thoughts. The first is that Labour Members have still not told us what reforms to welfare benefits they would make to reduce the budget deficit that we and all our constituents still face. At a time when the country is spending more on the interest of our debt than on the education of our children, it has to be wrong to ignore this part of the equation.
I think I am right in saying that Labour opposed every one of the welfare reforms pushed through by the coalition Government in the last Parliament, which amounted to some £20 billion of reductions in expenditure, and indeed have opposed everything in this Parliament as well. This comes at the same time as consistently opposing in this Parliament measures that the Government have taken to improve conditions for businesses that generate, directly and indirectly, 75% of all the tax that pays for the services, the welfare and the pensions that we all know are so important to our constituents.
Richard Graham
I have two points in response to that. First, when it comes to generating more tax, I subscribe to the philosophy of the former Chinese leader, Deng Xiaoping, who said:
“It matters not whether the cat is white or black so long as it catches mice.”
On this occasion, when we lowered the top tax rate from 50% to 45%, the additional tax revenue was £8 billion. My question to the hon. Lady and her colleagues is this, “Would you rather have an extra £8 billion of tax revenue to spend on our vital services, or enjoy the ideological thrill of raising the top tax rate and collecting less tax revenue with less to spend on services?” I know what I would go for; I am not sure about her.
Richard Graham
The hon. Lady is shaking her head, which suggests to me that my colleague on the Select Committee on Work and Pensions is still from the school of thought that prefers to raise taxes and get less tax revenue. I would have thought that the period of Reaganomics and Thatcheromics had made it very clear that we incentivise businesses to grow, to generate more revenue and to employ more people by creating a business-friendly environment rather than the opposite. It is something that the hon. Lady and her party will have to work out.
The hon. Lady’s second question was on the married person’s tax allowance. All the evidence from research done over a period of years shows that we have happier families and less dysfunctional behaviour when we have closer families, and marriage plays a key part in that. I recognise that not all Members subscribe to the importance of marriage as a contributing factor to a happy society, but we should probably leave that debate for another day.
My second main point relates to what the right hon. Member for East Ham said about universal credit, in particular the part of the motion that states that
“many may struggle with elements of the new approaches to payment and administration”.
There is a philosophical issue here, too. Originally, the current Minister for Welfare Reform, Lord Freud, acted as an adviser to the last Labour Government, and he recommended many solutions to the problem of tax credits, which he has now implemented in government with our party. I once asked him what the difference was between the work he had done for the previous Labour Government and our own Government. He said that the difference was simply that we would implement it.
The former Labour Chancellor of the Exchequer and Member for Edinburgh South West, now Lord Darling, said in this House that Labour had not implemented universal credit simply because it was “too difficult”. His party has always struggled with the fact that we are implementing something that it had decided was too difficult. Labour Members have not been able to work out whether to oppose it all in principle, which would be odd, given that they had looked at it, or whether to attack it in detail on the basis that it is too complicated to do. As universal credit continues to move forward on its journey across the country, affecting a growing number of people, I suspect that that challenge is going to be more and more difficult, and those on the Labour Front Bench are going to have to reconcile these problems.
The assumption behind what the right hon. Member for East Ham said today is that universal credit is basically all too complicated, with the twist that it now cannot be understood by those who are going on to it. I do not know how many Members have actually been to their Jobcentre Plus and spoken to people working there about the implementation of universal credit, as well as to their customers, namely our constituents who are receiving it. I suspect that those who have done so, as I have, will find that people working in Jobcentre Plus find universal credit to be a huge step forward. More than one officer working there described it to me as a quiet revolution, while those receiving it find it much easier to understand than the plethora of often contradictory benefit systems that our country built up over a long period of time.
I fundamentally disagree with the right hon. Member for East Ham—reluctantly, because I agree with him on several things—on the notion that universal credit cannot be understood by those either receiving it or responsible for administering it. He claimed that there were “long delays” to universal credit claims, and that the Trussell Trust had said once again, having said it several times before, that the increase in demand for food banks was largely down to the delays in benefits. Because I had heard that argument for quite a long time, last year I set up with my local citizens advice bureau a service agreement that obliged it to refer to me any instance of any of my constituents who are waiting longer to receive benefits due to them than the accepted norm set by the DWP. That covered any situation. In the last six months, how many people had been referred to my office for unnecessary delays to their benefits? One—one single constituent. It could be argued that there is not a complete correlation between people referred to the food bank by the CAB and those who go to the food bank. That could be true. A number of organisations in the city of Gloucester, including my own office, refer people to our food bank. None the less, the CAB is probably—I do not have the precise statistics—the biggest single organisation handling the welfare difficulties of my constituents. It is, I think, telling that over the last six months there has been only one case of unnecessary delays in the receipt of benefits.
Stephen Timms
The hon. Gentleman has got slightly the wrong end of the stick in relation to what I was saying. The problem with universal credit is that the five-week delay is built into the design of the benefit. That is not a fault; it is how it is supposed to work. The assumption is that someone who has last month’s pay cheque in the bank can cope for a month. That is the problem that the Trussell Trust is starting to identify, and Citizens Advice is saying that, in practice, it is proving to be a very serious problem for many claimants of the new benefit.
Richard Graham
I do not think that I have grasped the wrong end of the stick, but I may have grasped a different part of the stick, and I think it is important for all parts of the stick to be considered in this context. I will, however, respond directly to the point that the right hon. Gentleman has made.
I have sought permission from the Department for Work and Pensions and my local Jobcentre Plus to install a DWP adviser in the George Whitefield Centre—appropriately, as the right hon. Gentleman will know, named after the founder of Methodism—where there is both a food bank and a health service for the homeless. I hope that, should I be fortunate enough to receive approval from the Department and the Jobcentre Plus, the adviser, with access to a computer, will be able to see precisely where the problems are, and I hope that if, as the right hon. Gentleman suggests, the inbuilt delay is a real issue, that fact will be revealed. I put it to him gently, however, that there are a number of alternative scenarios, one of which is—to put it bluntly—that when people go to a food bank and are asked why they have done so, it is very easy for them to say, “I have had problems getting my benefits.” I hope that one of the advantages of the presence of a DWP adviser will be the ability to establish the extent to which that claim is correct, or possibly slightly exaggerated. The reality of life, I think, is that people get into financial difficulties—through no particular fault of their own—in a series of different ways, and I think that that is an aspect of the Trussell Trust feedback that has not been explored in enough detail so far.
Neil Gray
It is not just the Trussell Trust that is reporting circumstances in which people find themselves requiring emergency food aid from food banks. In February last year, the Poverty Alliance in Scotland reported that delays in benefits and cuts in social security support were the direct responsible contributing factor in those circumstances. Perhaps the hon. Gentleman will reflect on the fact that that is being said not just by one organisation, but by many.
Richard Graham
I sort of thank the hon. Gentleman for his intervention, but I do not think that he should rely on statements made by particular charities that tend to generalise. I encourage him to look into the position in his own constituency in detail, so that he can establish what the issues are.
At some point, the hon. Gentleman will also have to face the same strategic issue to which I referred the right hon. Member for East Ham and his party. If the position of the hon. Gentleman’s party is that all welfare expenditure is sacrosanct from now until the end of all days, he and his party will have to think about where they will find the revenue to fund that, and how they will do so without building up excessive debt on which interest has to be paid, which reduces the amount of money that is available to be spent on services.
If the hon. Gentleman studies—as our Select Committee has—the ratio between our country’s budget expenditure on welfare and that of some of the largest comparable nations in Europe, such as France and Germany, he will see that we spend more on welfare than they do. That is the challenge there for him and his party. He shakes his head, but reality will have to intervene one day, as my colleague Ruth Davidson in Scotland has pointed out several times.
Other Members wish to speak. Let me end by addressing one particular aspect of child poverty. There is a philosophical divide between different parties in the House on this issue, but an important part of the motion tabled by the right hon. Member for East Ham is the request for the Government
“to ensure that the number of children in poverty…falls as a result of the introduction of the new universal credit system.”
Evidence suggests that the highest poverty exit rate is strongly linked to the children of families who have gone into work, and have moved from part-time to full-time employment. I believe I am right in saying that 75% is the figure that enables the number of children referred to in the motion to be reduced. I think that that tells us that any welfare system which encourages people to work longer hours, obtain promotion and advance themselves in different jobs will have a hugely beneficial impact on the number of children in poverty, and I have no doubt that the steps taken by the Government to improve the chances of those receiving universal credit of moving up the ladder in the workforce will have a positive effect on the number of children in relative poverty.
I have made four points. First, there was the philosophical point about the strategy of welfare relative to tax revenue. Secondly, there was the point about the value of universal credit to our own constituents. Thirdly, there was my gentle challenge to some of the assumptions of the Trussell Trust about why people are going to food banks, and the role of DWP advisers in shedding more light on that issue. Finally, I drew attention to the relationship between getting into the workplace and moving on, and relative child poverty. On the basis of those points, I cannot support the motion.