Universal Credit and Working Tax Credits

Yvette Cooper Excerpts

Wednesday 15th September 2021 Commons Chamber

[Dr Coffey]

The hon. Lady will know that every individual or household on universal credit has very distinct relationships, which is why we can find households earning up to nearly £40,000 still being recipients of universal credit. It depends on the circumstances. As the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester (Will Quince) said the other day, trying to do some kind of analysis by trying to make individual assessments is just not viable. However, we know, and she knows—

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

Will the Secretary of State give way?

[Dr Coffey]

I will give way to the former Secretary of State for Work and Pensions shortly. The hon. Member for Oldham East and Saddleworth must agree with me that the best way to get more pounds into people’s pockets is through work. We have universal credit work allowances for people with children—this may have covered some of the people who gave evidence to the Select Committee—who have a limited capability to work, so they can keep all the extra money they earn until the allowance is used up and the taper rate kicks in. That is why we have given extra support for people who may not currently be working full time. That is an extra way for them to get all the money they earn for more hours.

[Yvette Cooper]

I thank the Secretary of State for giving way. A care worker or a low-paid public sector worker—for example, a nursery assistant—who works full time, loves their job and has no prospect of a pay raise any time soon, is now about to be told that they will have £20 a week taken away from them. What does she say to those care workers about why that is fair?

[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.

--- Later in debate ---

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

Low-paid workers are facing not a double whammy but a triple whammy, with prices and bills going up, national insurance contributions going up and now a £1,000 cut in universal credit. Ministers are creating a cost of living crisis for low-paid workers. I do not understand how they think people will manage. On what planet do Conservative Ministers think that that is fair?

One of many emails that I got last week said:

“I am unemployed, 65 years of age and my sole source of income is universal credit. My income will drop from £715 a month (just keeping head above water) to £612 a month (drowning!). When my rent and all other bills are paid, this will leave me with £89 for food, clothing, bus fares for job interviews and everything else for the month. We need help.”

A constituent in Pontefract who is working to support himself and his disabled partner, on universal credit but paying off rent arrears, talked about the pressure that he is already under. He said:

“I don’t know what to do. I have been crying. I have just half a tin of beans left for us.”

In Normanton, Pontefract, Castleford and Knottingley, 10,000 families—nearly half of all families with children in the constituency—will be hit, losing £85 a month or more than £1,000 a year. That means £10 million will be taken out of the five towns’ economy that would have been spent in our local shops when, frankly, our town centres are under real pressure. Care workers, factory workers, warehouse staff, teaching assistants and hairdressers are all being hit.

Ministers say that the answer is for people to work harder and work longer, but they are already doing that, and care workers doing 14-hour shifts do not have any hours or extra days that they can work. Ministers claim that the £20 must go because it was only ever supposed to be temporary, but why? Price rises are not temporary; they are getting worse. The debt that people have run up because of covid is not temporary; it still has to be paid off. The hardship and hunger that children face is not temporary; it is getting worse. Even before the £20 came in, families had lost nearly £2,000 a year because of previous Government cuts. Why do Ministers want to go back to that? That is not building back better.

There is a huge gap between Conservative Ministers’ words and the reality of working people’s lives. The bottom line is that millions of people will be worse off next month because of the Government’s decisions. Some people made more profits during the crisis, and some on higher pay made real savings, but the key workers who kept us all going through the crisis, on the lowest pay, doing the most important jobs, are being hit. Ministers clapped them in the streets; now they are cutting their family income. It is not just a kick in the teeth; it is a complete betrayal. Ministers should have some shame and cancel the cut.