Budget Resolutions

Rushanara Ali Excerpts

Thursday 7th March 2024 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Does my right hon. Friend agree that the Prime Minister’s tax plans will leave households on average £870 worse off under the Conservatives?

[Rachel Reeves]

My hon. Friend has done the maths and is absolutely right. Taking into account the changes to the tax threshold, the announcements yesterday and in November, and council tax, by the end of the forecast period the average family will be £870 worse off.

As the Resolution Foundation highlighted just this morning, the 8 million tax-paying pensioners will see their taxes increase by an average of £1,000. That is a collective £8 billion tax grab from our nation’s pensioners. As Paul Johnson, the director of the Institute for Fiscal Studies, said yesterday:

“This remains a parliament of record tax rises.”

That is the legacy of this Conservative Government.

The Tory Government’s pickpocketing has meant higher taxes on working people, leaving them with less money at a time when their daily lives are getting more expensive. Yesterday, the Chancellor said that a person on average earnings is £900 better off, but let us take a look at that claim. He has ignored not only his own stealth tax rises, with the tax thresholds and council tax, but the rising costs of energy bills, food, mortgages and rent. In fact, rather than being better off, as he claimed, household disposable income is set to fall by £200 per person over the course of this Parliament.

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[The Secretary of State for Work and Pensions (Mel Stride)]

Thank you, Madam Deputy Speaker. The right hon. Lady commenced her remarks by saying much about where Labour is on tax. She criticised the aspiration that the Government rightly have to abolish national insurance at some point in the future. She rather disingenuously repositioned that as a firm commitment, rather than an aspiration, but let us set that to one side.

The right hon. Lady knows all about firm commitments, because we had a firm commitment from her to £28 billion- worth of spending every year over the forecast period. That did not survive contact with reality. Indeed, she has little to say that is original. When she writes about economics, she has to cut and paste from Wikipedia. When she trumpeted her ruinous £28 billion spending plan, she ultimately had to U-turn and run for the hills. For this shadow Chancellor, when it is not cut and paste, it is cut and run. [Interruption.] I thought the right hon. Lady would like that.

The right hon. Lady has also accepted our tax measures as set out in yesterday’s Budget, including the abolition of non-dom status and the windfall tax on oil and gas. She has hypothecated the money raised from those two measures many times over—for the NHS, dentistry, breakfast clubs and so on. Now that she has accepted all the tax measures in the Budget, I invite her to come back to the Dispatch Box; I will give way to her if she will let us know whether she will U-turn again on her spending commitments on the NHS and dentistry, or whether she will put up taxes and borrowing. I would be very happy to hear from her—all right, perhaps not.

[Rushanara Ali]

When the Secretary of State was Chair of the Treasury Committee, he was keen on Office for Budget Responsibility assessments and forecasts. Indeed, he argued for them, but his then Prime Minister and Chancellor failed to listen to him and crashed the economy. He and his Government want to pursue the aspiration, as he now calls it, of scrapping national insurance contributions altogether, which would cost £48 billion a year. Will he commit to seeking an OBR forecast and assessment of that, and showing how the Government would pay for that?

[Mel Stride]

Let me talk about the general point that the right hon. Member for Leeds West (Rachel Reeves) made about the tax burden. It is as if history has been erased from her mind. The fact is that the covid pandemic shrank the economy overnight by 10%, and this Government stepped in, supported jobs, and saved 10 million jobs as a result of the intervention that we came forward with. It is as if it has been erased from her memory that a war is going on between Russia and Ukraine, and that that has led to an increase in energy prices and inflation. This Government have stepped in to support the most vulnerable in society, including families, pensioners, and the disabled up and down this country. The Government provided £400 billion of support across that period, and in all candour, I do not believe that there was a single occasion on which she opposed any of our interventions. She was up for spending the money to support people, but not up for recognising that it has to be repaid. That is why the tax burden is indeed increasing.

To go back to the point about the OBR’s economic and fiscal outlook raised by the hon. Member for Bethnal Green and Bow (Rushanara Ali), the OBR makes it clear that the measures taken yesterday in the Budget mean that the tax burden will be lower than was forecast in the autumn, as a result of the management of the economy and the reduction in taxes that my right hon. Friend the Chancellor brought forward.

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[Rushanara Ali]

I am incredibly grateful to the Minister for giving way a second time. I remind him that the tax burden has gone up by £27 billion in the last year, and it will go up by £19 billion after the election because of decisions his party made. People who earn less than £19,000 will be worse off because of the Budget. Two decades of lost pay growth—that is the record of his Government over the last 14 years.

[Mel Stride]

I thought I had already covered this point, but the reality is that the tax burden has had to go up to pay for all the support we provided around covid, and because of the inflationary pressures created by a war on European soil. The hon. Lady cannot get away from the fact that through this fiscal event, and the previous one, 27 million hard-working people, employed in businesses up and down the country, will be better off to the extent of £900 per year. Some 2 million self-employed people will be £650 per year better off. She talks about those earning less than £19,000, but those many millions of people who earn above £19,000 will have a lower tax burden than before, when we take into account the interplay of the freezing of thresholds and the cuts in national insurance.

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[Rushanara Ali (Bethnal Green and Bow) (Lab)]

After 14 years, we needed a sober and serious plan to revive our economy, boost productivity, and encourage entrepreneurship and investment to power serious economic growth. We needed a Budget for growth. Instead, what did we get? We got reckless gimmicks and political trickery.

When the country is crying out for renewal and investment in public services, this Budget puts party before nation. After 14 years of Conservative rule, our economy has been wrecked and vandalised. Before yesterday’s tinkering around the edges, we knew that public debt as a share of national output was at its highest since the 1960s. Debt interest payments are at their highest level since the second world war. The economy is smaller per capita than when the Prime Minister took over after the mini Budget fiasco, when his predecessor and the then Chancellor crashed the economy. This will be the first ever Parliament in which living standards, as a measure of real household disposable income, have fallen.

The Conservatives now expect us to rejoice in their planned expenditure of £9 billion on tax cuts, which will be funded by increased borrowing. This will be dwarfed by the £27 billion of tax rises that came into effect last year, and the further £19 billion that is due to come into effect after the election, because of the choices and the decisions that they have made.

Let us look at the impact of these measures on different groups. Research by the Women’s Budget Group shows that single men will gain, on average, close to £500 more a year than lone mothers from the combined national insurance cuts in the autumn statement and spring Budget. The Institute for Public Policy Research estimates that half the tax cuts will go to the wealthiest households, and just 3% to the poorest.

We also heard the Chancellor boast yesterday of the Conservative party’s intentions to scrap national insurance altogether. Without any plans to fund this, we would see a £46 billion black hole in the country’s finances every year. That is deeply irresponsible. The Conservative party should have learned its lesson, having crashed the economy with the omnishambles of its mini Budget and its £45 billion of unfunded tax cuts, which came at a very high price, particularly in relation to costs and mortgage hikes. And people are still living through that crisis, while the former Prime Minister remains in denial, as she goes off and earns huge amounts of money, dining out on having crashed the economy. This is why my right hon. Friend, the shadow Chancellor, has committed to upholding and strengthening the role of the Office for Budget Responsibility. Only Labour can deliver the economic stability that this country desperately needs and put an end to the Conservative party’s fantasy of unfunded and unsustainable tax cuts.

[Steve McCabe]

I just wonder whether there is any scope for a special “crash the economy” tax, so that we can claw back some of the money that the former Prime Minister has earned from her speaking tour.

[Rushanara Ali]

For a start, the former Prime Minister could certainly donate her earnings to the millions of children now living in poverty—poverty that was worsened by her crashing the economy. The parents of children in my constituency are having to work even more to make ends meet, particularly to pay their mortgages, which in some cases have doubled. That is the consequence of the rot that she and her Chancellor caused by crashing the economy.

[Matt Western]

On a more serious note, reports allege that, ahead of that mini-Budget, the then Chancellor briefed certain hedge fund managers and they made significant financial gains off the back of it. Surely there should be some comeback on that

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[Rushanara Ali]

My hon. Friend makes an important point. Those reports were well publicised at the time, and it is shocking that there has not been an investigation or an inquiry into what happened. Shockingly, the then Chancellor and Prime Minister continued to behave as if they had done nothing wrong, as if we should be grateful that they were in charge at the time. They continue to go on speaking circuits, gaslighting the British public, having crashed the economy and ruined their lives. We are still paying for that. The time cannot come soon enough for this episode to be over, for a fresh start with a new Labour Government.

Of the current Chancellor and his Budget, the former Treasury Minister David Gauke said in an article in the New Statesman that the Budget was a “work of fiction”. He said:

“He wants to be prudent and responsible, and he wants to cut taxes. The reality is that he cannot do both.”

I have a lot of time for the current Chancellor, who inherited an awful situation, but he has not faced up to the reality of needing to be responsible. His former colleague set that out in the article. It is not Labour that is attacking the decisions of the current Chancellor; it is his own former colleague, who was a respected Treasury Minister.

When it comes to growth, one does not need to be an economist to know that the Government’s economic policy is failing. Wages have fallen behind and, according to the Resolution Foundation, real wages will only return to 2008 levels by 2026. That is nearly two decades of lost pay growth, nearly two decades of people not seeing an improvement in their living standards, and nearly two decades of people having to face real-terms wage cuts. By contrast, real wage growth across the OECD as a whole has risen by almost 9%, on average, over the same period. This is costing British workers an average of £3,600 per year. It means that they have had less to spend and, on top of that, they have had to live through the mini-Budget crisis, made in Downing Street, and the cost of living crisis that came after that.

The House of Commons Library shows that UK food and alcoholic drink prices were nearly 7% higher in January 2024 than the previous year, based on the CPI measure of inflation. What does that mean in practice? In constituencies such as mine, and up and down the country, it means millions more children living in poverty during the last 14 years, children in this country going hungry because of the failures of this Government, and parents having to work more hours just to keep their head above water. That is the consequence of what the Conservatives have done to people’s lives in this country.

The Budget leaves those who earn £19,000 or less worse off. That cannot be right. The Office for Budget Responsibility’s forecasts show that GDP will grow by just 0.8% in 2024 and 1.8% in 2025. What about productivity? The Government have talked about the productivity puzzle for a very long time, but they have not managed to address it. In the last quarter of 2023, productivity was estimated to be 0.3% lower compared with the year before, according to the Office for National Statistics. What we have, and have had, is sluggish productivity, flatlining growth, stagnant wages and rising prices. No wonder our country is in recession.

As a consequence, the Government have presided over declining investment in our public services. We have seen the spectre of queues for dentist appointments; people stuck in hospitals because of the failure to invest in local government and social care; the police struggling to cope because of underfunding and cuts in police numbers; the criminal justice system facing massive cuts and, as a result, people not getting justice; major infrastructure projects cancelled, such as HS2, which means that investors have lost confidence; and so much more. I could go on, but I appreciate that others want to speak.

The question is whether people feel better off than they did in 2010 when the Conservative party came into government. The answer is no, because they are working longer hours and working harder. After austerity, which damaged our public services, and after the mini-Budget crisis, which crashed our economy and cost £60 billion to begin with, along with mortgage increases, food price hikes and much else, people are not better off. Of course, we have not mentioned partygate, the abuse of power, the billions wasted in personal protective equipment contracts, and the money wasted in fraud. The billions that we could have used to support people instead went to waste, and in particular cases went into corruption, which has not been addressed.

We have seen an endless queue of Chancellors and Prime Ministers, one after another, experimenting on our country and letting people down. Political and economic instability is causing huge distress to people in our country. What do they have to show for it? A cost of living crisis, often made in Downing Street, and a sticking- plaster Budget designed to help the Conservative party to remain in power. People can see right through it; they will not be fooled by what has been provided. We need a serious Budget for productivity and growth—no more wasting opportunities and people’s talent. We need a Government focused on national renewal, and an economic strategy for growth, which we did not get yesterday.

We could have had a sustainable programme for supporting the small and medium-sized businesses that power our economy—99% of our businesses are in that sector. They could be supported much more to grow our economy. We could have seen much more support for those in the homebuilding industry by reforming the planning system. We could have had more investment in green industries and generating green jobs; a new national wealth fund to unlock billions in private investment; a skills revolution in the form of setting up new technical excellence colleges; and investment in the younger generation, and their skills, education and early years. We could have seen a shift in making work pay, with a genuine living wage, banning zero-hours contract and ending fire and rehire.

Those are some of the things that the country desperately needs. We have seen none of that. We have seen no vision for the future—for renewing our economy and our society. Those are some of the things that we could, and would, deliver if we had the privilege of getting into Government. It is time for change. It is time to end the misery and destruction being caused by this Government. It is time for a change in Government.

Oral Answers to Questions

Rushanara Ali Excerpts

Monday 28th June 2021 Commons Chamber

The Secretary of State was asked—

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

What recent progress her Department has made on tackling child poverty.

[Richard Burgon (Leeds East) (Lab)]

What recent progress her Department has made on tackling child poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

Throughout the pandemic, our priority has been to protect the most vulnerable, which is why we spent an additional £7.4 billion last year to strengthen the welfare safety support for working-age people. Our ambition is to help parents return to work as quickly as possible, as there is clear evidence of the importance of having parents in work for reducing the risk of child poverty. That is why we are spending over £30 billion on a comprehensive plan for jobs.

[Rushanara Ali [V]]

I thank the Minister for his answer, but 60% of kids in my constituency are living in poverty, and over 4.2 million live in poverty across the country. The numbers have gone up by 700,000 since 2010, and the Government’s limited extension to the local support grants does not make up for the cuts to universal credit, which will mean that families are £1,000 a year worse off from September. Is it not time that the Minister reconsidered that decision and made sure that families do not lose £1,000 from September, so that more children are not forced into poverty?

[Will Quince]

I thank the hon. Lady for her question. We are wholly committed to supporting families with children. We spent an estimated £111 billion, including £7.4 billion on covid-related measures, on working-age welfare in 2020-21. In addition, as the hon. Lady referenced, we introduced the covid local support grant. We have now extended that grant with an additional £160 million in funding between 21 June and 30 September. That brings the total funding package to £429 million. For the hon. Lady’s constituency—I reference Tower Hamlets London Borough Council—it means an overall funding package of over £3 million.

Oral Answers to Questions

Rushanara Ali Excerpts

Monday 8th March 2021 Commons Chamber

[Justin Tomlinson]

I thank the hon. Lady for raising a very important point about disability employment. The Government are very proud that we delivered record disability employment—it is up 1.4 million since 2014 alone. Even during these unprecedented challenging times, over the past 12 months 25,000 more disabled people are in work. But we recognise that there will be challenges going forward, which is why we have made changes to Access to Work so that people can get support working at home; we have increased our support through Disability Confident, sharing best practice and providing resources to employers to be able to make changes, often small ones, to take advantage of the huge talent pool available. This is a key area, and in both the forthcoming national strategy for disabled people and the health and disability Green Paper we will continue to look at ways in which we can support employers to offer more opportunities for disabled people of all ages.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

What recent steps she has taken to reduce youth unemployment.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

This Government are committed to providing support to help young people move into work and avoid the scarring effects of long-term unemployment as we recover from the pandemic. The £30 billion plan for jobs includes new youth hubs and specific interventions targeted at young people. Our DWP youth offer and the kickstart programme are designed to move young people towards meaningful and sustained employment opportunities.

[Rushanara Ali [V]]

Happy International Women’s Day, Mr Speaker.

Last year, youth unemployment went up by 420,000, reaching 600,000, and it is set to reach 1 million, yet the Government’s kickstart programme has got only 4,000 young people into work, despite employers providing placements. Will the Minister explain by what date her Department’s own target of 200,000 placements will be met?

[Mims Davies]

The hon. Lady is absolutely correct: we are converting more than 140,000 job placements into starts and 30,000 jobs are currently being advertised. In her area, the London Borough of Tower Hamlets has approval for more than 500 kickstart opportunities in a variety of sectors across the borough. A virtual youth hub is also operating in Tower Hamlets to support people and we hope it will move to face-to-face contact shortly. There are 119 new work coaches in Hoxton and a new temporary Jobcentre Plus is opening in Leman Street in Tower Hamlets in April. We take youth unemployment incredibly seriously. As we move into recovery, we will make sure that young people take up roles and move into work safely, to get those kickstart opportunities going.

Oral Answers to Questions

Rushanara Ali Excerpts

Monday 25th January 2021 Commons Chamber

[Katherine Fletcher (South Ribble) (Con)]

What steps her Department is taking to enable more small business to participate in the kickstart scheme.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

What steps her Department is taking to encourage employers to participate in the kickstart scheme.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

We continue to engage with employers of all sizes to create high-quality placements for our young people to get their start on the employment ladder, and to make it even simpler, from 3 February we will remove the 30-job minimum for job applications, giving new applicants the choice to apply directly or via one of over 600 excellent approved kickstart gateways.

[Mims Davies]

I would very much like to thank my hon. Friend for raising the opportunities for smaller businesses, and the great team at the North and Western Lancashire chamber of commerce for their hard work and the services they provide as a gateway organisation. This is helping many sole traders and employers in her constituency to support our young people to take up these kickstart roles, ensuring that young people have that vital wraparound support, getting them on to the career ladder and, above all, grasping future work opportunities.

[Rushanara Ali [V]]

With youth unemployment set to reach 1 million and 600,000 already unemployed, can the Minister provide some updates on how her Department will meet the 250,000 kickstart programme target that it stated it would meet? The numbers that the Secretary of State has set out today are worryingly low. Will she also consider removing the six-month requirement, where a young person has to be unemployed for six months before they qualify for the kickstart programme?

[Mims Davies]

The young person needs to be on universal credit and working with our excellent work coaches. In respect of Hoxton and Poplar, which cover the hon. Lady’s constituency, we are recruiting 27 new work coaches in Hoxton and 67 in Poplar. Since the end of September, we have been working with the new Tower Hamlets youth hub, with local employers and gateways bringing opportunities. I encourage the hon. Lady to visit her local jobcentre to see what has happened there in the past year, because I do not believe she has visited and think that would put her mind at rest.

Oral Answers to Questions

Rushanara Ali Excerpts

Monday 29th June 2020 Commons Chamber

[Justin Tomlinson]

I can absolutely reassure my hon. Friend that disabled people will be at the very heart of the consultation on both the Green Paper and the national strategy for disabled people. As soon as it is safe to do so, we will begin the roadshow of consultation across the whole country, making sure that all voices are heard and shape our future priorities.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Child Poverty Action Group and the Church of England estimate that by April 2020, around 230,000 families had been hit by the two-child limit, causing huge distress to children and their families in the middle of the pandemic, and that 1.3 million children will be forced into poverty—or, if they already face poverty, into deeper poverty. When will Ministers scrap this cruel and vicious policy that is punishing children?

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

We keep all policy under review. The particular policy change the hon. Lady references would not only cost around £2 billion a year but could not be operationalised now even if we wanted to, because all the focus is rightly on the Department’s response to covid-19. I say to her gently, though, that it is a policy based on fairness; those in receipt of benefits are faced with the same choices in life as those not in receipt of benefits.

Inequality and Social Mobility

Rushanara Ali Excerpts

Wednesday 12th June 2019 Commons Chamber

[The Secretary of State for Work and Pensions (Amber Rudd)]

I am grateful to the Opposition for giving me the opportunity, on behalf of the Government, to talk about our commitment to reducing inequality and to improving social mobility.

I know I came into this House to help people improve their lives. In my experience, so did every single Member of Parliament sitting across this House. We do that every weekend in our surgeries in our constituencies, and we do that on whichever side of the House we sit—addressing different policies and trying to use the levers we have and the financial stability that we hope to have to improve the quality of people’s lives—because supporting social mobility, fighting poverty and giving people a chance is not distributed along party lines. That is why I always want to hear from colleagues who are fighting to improve people’s lives, from the vision of my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), who introduced universal credit, to the tireless work of the right hon. Member for Birkenhead (Frank Field) in championing the most vulnerable in society.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

When she came to office, the Secretary of State rightly delayed the two-child policy limit along with the universal credit roll-out, and she deserves credit for that. Does she agree that she should scrap that limit altogether to prevent millions of children from being forced into poverty? That would be one way in which she could honour the commitments that she is making today to tackle child poverty.

[Amber Rudd]

The hon. Lady must bear in mind the context in which some of those welfare reforms were made. The Government came to office in 2010, in the midst of an economic crisis. Reforms were needed, and if we had not made those reforms, the consequences for the national economy could have been so destabilising that they might have reduced the funds that are now available for us to spend on social security.

Universal Credit

Rushanara Ali Excerpts

Monday 14th January 2019 Commons Chamber

[Alok Sharma]

The hon. Gentleman and I have discussed universal credit before and, as I have said, my door is always open. If he has specific cases, I will be happy to review them.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Over 100 MPs supported the cross-party campaign to scrap the two-child limit policy, including the hon. Member for Glasgow Central (Alison Thewliss). However, some 3 million children will still be affected by the policy, even though the Government have decided to relax it somewhat. Will the Minister heed MPs’ advice and scrap the policy altogether?

[Alok Sharma]

We have listened. In November, I spoke to the hon. Lady and other colleagues about the policy, and we have changed its retrospective nature. However, I point out that the overall policy is about fairness not only to those who receive welfare but, of course, to taxpayers.

Universal Credit and Child Tax Credit: Two-child Limit

Rushanara Ali Excerpts

Tuesday 27th November 2018 Westminster Hall

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

It is always a pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for Glasgow Central (Alison Thewliss) on her tireless campaign on this very important subject and on securing today’s debate.

The issue sits in the context of the wider debate about universal credit, which will affect 1 million homeowners, slightly fewer than 750,000 households on disability benefits and 600,000 single parents. On universal credit, two in five households will lose about £52 a week in payments, and across many constituencies entire families will be severely affected—if they are not already. In areas where universal credit has already been rolled out, food bank use has increased by 52%. As the hon. Lady said, as part of the 2015 package, from April 2017 low-income families with a third or subsequent child lost their entitlement to additional support through child tax credits.

[Kate Green]

Does my hon. Friend agree that contrary to what the hon. Member for Glasgow Central (Alison Thewliss) suggested, Labour did not support the two-child limit? We abstained on the Second Reading of the Welfare Reform and Work Bill but voted against Third Reading. Does she agree that we should place that on the record?

[Rushanara Ali]

I concur. It is really important that the Scottish National party, the Labour party and other parties that oppose the policy continue to work together, so that we can protect families. More families will be affected from February next year, as universal credit is rolled out, and the retrospective element, which the hon. Member for Glasgow Central mentioned, will be devastating. No family could have prepared for a policy that was to be applied retrospectively; nor is it right that children should be retrospectively punished in that way. This, in short, is a punishment of children, and it is totally inhumane. No Government should be standing up for such a policy. Given that the Minister has recently taken on his role and the policy was not his idea, I urge him to reflect carefully on what is being said and on the representation being made to him, to ensure that the policy is reviewed and reformed.

If the Government are concerned about family size and think that families should not be as large as they are, just as with teenage pregnancy, public education exercises can be more successful than punitive measures that punish children. In developing countries, where there is a case for encouraging smaller families because families cannot provide, family sizes have been brought down through education and women’s empowerment, but that is a different debate from what is happening here.

Philip Alston the UN’s special rapporteur on extreme poverty and human rights recently said of the two-child limit that it is “in the same ballpark” as China’s one-child policy, because it punishes people with more than two children. Reports also state:

“The UK government has inflicted ‘great misery’ on its people with ‘punitive, mean-spirited, and often callous’ austerity policies driven by a political desire to undertake social re-engineering rather than economic necessity, the United Nations poverty envoy has found”.

It cannot be right that in one of the wealthiest economies of the world, our children face hunger and punishment.

[Mr Gregory Campbell (East Londonderry) (DUP)]

In encouraging the Minister to reconsider, does the hon. Lady agree that it is important that he understand that most people—most of those I meet, anyway—are in favour of reform, because of the complexity of what preceded universal credit, and are in favour of encouraging people into work, but are most definitely not in favour of stigmatising or of ensuring that the very vulnerable in society are punished as a result of the first two?

[Rushanara Ali]

I agree. I do not think that policies that punish vulnerable people are ultimately likely to succeed, which is why the Minister needs to rethink both this aspect of the universal credit policy and the policy more generally. In their attempt to simplify, the Government have found ways to cut funding. People will be worse off under universal credit.

Since implementation, the policy has already affected 400,000 children, and some 3 million children are likely to be affected. That is why I echo the points the hon. Member for Glasgow Central made, calling on the Minister to review the policy and put a stop to it, certainly until the extension of the policy next February, which will be devastating for families.

In my constituency, a large number of children and families will be affected by the policy. We have a large Muslim population and, as has been mentioned, people of other faiths are also affected. I call on the Minister to take into account the unequal impact the policy will have and the fact that the equality impact assessment is flawed.

[Dr Huq]

rose—

[Rushanara Ali]

I will have to conclude, to give others the opportunity to speak. The equality impact assessment does not recognise the negative consequences for certain groups. More than 100 MPs wrote a letter to the Prime Minister, copying in the then Work and Pensions Secretary and the Chancellor, and we have still not had a response, which is really unfortunate. I encourage the Minister to go back to his Secretary of State and ensure that she responds to it and seriously rethinks the policy so that children in our country are protected.

[Several hon. Members rose—]

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[The Minister for Employment (Alok Sharma)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I thank the hon. Member for Glasgow Central (Alison Thewliss) for securing this debate. I know she has a long-standing interest in the subject, and earlier this year we met at the Department for Work and Pensions to discuss issues relating to this particular policy. Yesterday, as the shadow Minister just pointed out, there was a cross-party roundtable led by the Bishop of Durham to discuss these issues and I took part for some of the time, as did the hon. Lady. I thank all Members who have contributed to today’s debate.

My style is generally not to feed rancour in a debate, because I think it is important that we have a civilised discussion and colleagues have an opportunity to raise issues that are important to them, but the hon. Member for High Peak (Ruth George) talked about the fact that an economic mess has been created over the past eight years. I respectfully say to her that she was not in this House in 2010. A number of us were, and I would say that the economic mess we inherited was from the previous Labour Government. I must point out that 3.3 million jobs have been created since 2010—I see hon. Members shaking their heads in disbelief, but that is a fact—and wages are now outpacing inflation. The vast majority of those jobs are full-time and permanent, at a high level of education. That is not an economic mess.

[Rushanara Ali]

Will the Minister address the social mess that his Government have created? That includes not only this policy, but welfare and policing—the list goes on. Will he respond to the serious concerns that hon. Members have raised today? That is what we are after: not looking backwards, but addressing the problem at hand.

[Alok Sharma]

Of course I will address the issues, but it is important to look back and see where we have come from to reach the policies that we are now putting in place.

Several hon. Members mentioned universal credit. I know that this debate is not about universal credit, but I am afraid I must point out that the legacy benefits system is not really fit for purpose. It is incredibly complicated, and as a result 700,000 households are not claiming—or are not able to get hold of—the full amount owed to them. Under universal credit, those households will be £285 better off on average per month. Likewise, 1.4 million people spent the best part of a decade on unemployment benefits under the last Labour Government, but that is changing.

I accept there has been discussion about finances, but I must say to SNP colleagues that, as Labour Members have pointed out, the Scottish Government have the power to create new benefits in devolved areas. They are able to provide assistance to meet short-term risk and they have the ability to top up reserved benefits from their own resources.

Universal Credit

Rushanara Ali Excerpts

Wednesday 17th October 2018 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Government’s universal credit policy is an utter shambles and a disgrace. Even if the original vision was well intentioned, it is forcing families into poverty, homelessness and destitution. According to The Times, some households will be £200 a week worse off after transferring to universal credit. Half of lone parents and two thirds of working-age couples with children are likely to be £2,400 a year worse off.

The Government have used universal credit as a vehicle for cuts. Instead of helping to lift families out of poverty, it is increasing dependency on food banks, increasing homelessness and increasing indebtedness. The context of this policy is that 4.5 million children are already living in poverty in this country. With disability benefits being cut by £5 billion, child benefits being cut by £2.8 billion and housing benefits being cut by £2.3 billion, universal credit will add to people’s suffering. This is not about transferring people from worklessness and unemployment into employment; it will increase in-work poverty.

The Government talk about ending austerity, but the reality is that this policy will add to people’s suffering. The Government rapidly need to find the additional funding to make this policy achieve its original objective of creating an opportunity for people to make the transition into work and to be able to lift themselves out of poverty. That is not what is happening.

[Gareth Johnson]

I agree with the hon. Lady that universal credit needs to be adequately funded. Is she as surprised as I am, therefore, that the Labour party did not support the extra £1.5 billion given to universal credit in the last Budget?

[Rushanara Ali]

The hon. Gentleman should talk to the Chancellor about sorting out this policy, because, too often, his Government experiment on the British people without having a clue about what is happening in people’s lives and dismiss the problems that our constituents face. That happened with national health service reform. Where is the former Health Secretary, who introduced those policies that have devastated the health service? The same is happening with welfare reform. Ministers mete out incredibly devastating, damaging policies on the population, just as they are with Brexit, and then they leave. That is not good enough. Take responsibility and sort out this policy.

If universal credit were a workable policy that improved people’s lives, the Minister might have support from other parties, but that is not where we are. People are being forced into poverty and destitution—that is the legacy of the former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), who introduced this policy. Frankly, he went on a discovery exercise in opposition and found poverty in this country. He decided to come to this House to introduce universal credit, but the reality is that it will make matters worse.

Even those of us who gave the right hon. Gentleman the benefit of the doubt when he founded the so-called Centre for Social Justice now find that his intentions were utterly disgraceful. He presided over a policy that will devastate millions of people’s lives, and Ministers should get a grip and make sure that those mistakes do not end up causing more suffering in our country, because that is his legacy. He should be here taking responsibility for what is happening in this country.

Over half the population of my constituency, including over half the children, live in poverty—the proportion has gone up significantly. Local government funding has gone down by 24% since this Government came to power. Furthermore, families with more than two children are facing cuts to their benefits. The two-child policy will devastate children’s life chances. The policies introduced by this Government are an attempt to cut much needed funding. Although they might have been well intentioned, they are making a mess of a policy that might have commanded support on both sides of the House. The Government need to get a grip, sort out the policy and delay the roll-out until universal credit is absolutely watertight and protects people’s lives, rather than damages them.

Universal Credit

Rushanara Ali Excerpts

Tuesday 16th October 2018 Commons Chamber

[Alok Sharma]

We have put in support for individuals—I have talked about that. Of course, also very importantly, we now have this partnership with Citizens Advice, which is a respected, nationwide, independent organisation. It is there to help and assist the most vulnerable.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The two-child policy limiting the financial support to low-income families has already affected 400,000 children, making their families £4,000 a year worse off. When it is eventually rolled out through universal credit, some 3 million children will be affected. Will the Minister commit today to scrapping this abhorrent part of the wider welfare policy?

[Alok Sharma]

Universal credit is a welfare system that is about being fair to the most vulnerable people and to taxpayers, and being sustainable. The reason for that policy is that taxpayers face similar choices. It is important to say that we have exemptions in place, which will include kinship carers.