Universal Credit and Working Tax Credits

Stephen Doughty Excerpts

Wednesday 15th September 2021 Commons Chamber

[Chris Elmore (Ogmore) (Lab)]

On the face of it, today’s debate is about how we want to protect people’s incomes and stave off the threat of poverty for future generations but, scratching beneath the surface, we see what is really happening. The UK Tory Government have lost sight of what modern work means. They no longer understand the economy in which we live and how to implement policies that futureproof the world of work for tomorrow. In short, they have become stuck in the past, again.

When the Conservative party introduced universal credit, with the support of the Liberal Democrats, it heralded it as a panacea for poverty in the UK, but we have seen UC used as a vehicle for cuts to working wages. Today is no different. The former Chancellor of the Exchequer, George Osborne, repeatedly stoked the idea that those in receipt of welfare were out of work and should be punished, and that they should be ashamed of receiving additional support even when they were in work. Apart from being morally reprehensible, that is utterly wrong. Although the current Chancellor has better polish than the former, he is taking exactly the same path, a path that leads to poverty and the degradation of our local economies.

In my Ogmore constituency, we currently have 7,060 households in receipt of universal credit or working tax credits. Of those, 36% are in work, but the figure I want Ministers to listen to most carefully is that 4,731 children in Ogmore live in a home receiving universal credit. When Conservative Members vote this afternoon, I ask them to remember those 4,731 children whose families will face hardship. Those children have done nothing to deserve the cut that the Conservatives are pushing on their families, apart from being born into hard-working families who are often already working full time and just need this small piece of additional support that goes so far to ensure that their children can eat or live in a warm house. That is today’s modern Conservative party.

These numbers may seem abstract and distant, but each one represents a family who will lose £1,040 a year due to the decision made by the Chancellor and the Prime Minister. That in turn will snatch £7.3 million from my constituency, which is money that would have been spent in local businesses that in turn could continue to employ their staff and hopefully expand.

The pandemic has shown us the power of Government—the power of collective risk and shared reward. These are not just high ideals, they are policies that have been put into action by the Welsh Labour Government in Cardiff with self-isolation payments, financial support for utility bills, free financial advice and debt advice, the discretionary assistance fund, the covid-19 statutory sick pay enhancement scheme, the economic resilience fund and the most generous business rates relief anywhere in the UK. All of this has been done by a Labour Government who understand the modern world, the modern economy and modern household budgets. Comparing this forward thinking with that of the UK Government, we see a stark difference between a Welsh Government who care and a Westminster Government who have no interest.

The world of work is now more insecure, with a rise in zero-hours contracts and agency work being the main driver. The UK Government have rejected calls to overhaul this outdated system and make it one that rewards hard work. Instead, they cling to the outdated dogma that cutting UC will give people the incentive to earn more, despite the fact that many people in receipt of UC are already working full time. Are people meant not to care for their children or see their family? Are they meant to work every weekend? Is this the modern Conservative party?

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an incredibly powerful speech that very much reflects the experience of my constituents in Cardiff South and Penarth. Does he agree that these people are also having to deal with a huge increase in food, fuel and energy prices? We are seeing inflation at record levels, having jumped to the highest rate since 1997. These people are having to spend more of their income, at the time of this cut in UC, on food, fuel and other essential items.

[Chris Elmore]

I completely agree with my hon. Friend. Today’s figures show that the Government are out of kilter with what is happening to constituents across the land. Do Conservative Members not do a weekly shop like their constituents? Do they not see that prices are rising, whether on fuel or food? These things makes a huge difference, and the Conservative party is condemning families to have less in their back pocket as we approach the autumn and winter months. This afternoon Conservative Members will march through the Lobby and pretend it has no impact on their constituents. You could not make it up, Madam Deputy Speaker.

There are only so many hours in the day. Where are these people meant to find the hours to make up for the cut that the Conservatives are pushing through in the coming weeks? This is why we have seen poverty skyrocket across the country. The cut to UC is simply an old idea imposed on a new generation. If the Government were serious about tackling structural problems in our national economy, they would get to grips with low productivity rates and support investment led by communities, not Whitehall.

Yet again, the Government’s actions stand in stark contrast to their rhetoric. They claim to be levelling up—it would be funny if it was not so serious—but in truth they seek only a race to the bottom. Conservative Members will show their true colours again this afternoon in voting for stale economic thinking, whereas Labour Members will show a fresh alternative for the future of work.