Universal Credit — House of Commons, 2018-11-05
Topic: Social Welfare
Esther Louise McVey (Conservative, Centre-right): With permission, Mr Speaker, I would like to make a statement on the changes announced to universal credit in the Budget last week and on the draft Universal Credit (Managed Migration) Regulations 2018, which we are laying in the House today The Chancellor announced a substantial package at the Budget to ensure that millions of people keep more of what they earn, and vulnerable claimants are supported when they move to universal credit. In total, this package will be worth an extra £4.5 billion across the next five years. I pay special thanks to all the colleagues, charities, third-sector organisations, Jobcentre Plus staff and claimants who fed back to me in order to build this package of support to ensure that universal credit is a fair system, supporting thousands who cannot work as well as thousands who can. I also thank my right hon. Friends the Prime Minister and the Chancellor for their support to deliver these measures Make no mistake: this is a Department that listens and a Department that will continue to listen, adapt, change and deliver. We will put an extra £1.7 billion a year into work allowances, increasing the amount that hard-working families can earn by £1,000 before universal credit is tapered away, providing extra support for 2.4 working families—I mean, 2.4 million working families. [Laughter.] Of course, the Opposition do not like helping 2.4 million working families, and they are laughing because we help and support people into work The work allowance increase was welcomed not only in this House, but among charities. The Child Poverty Action Group said: "The work allowance increase is unequivocally good news for families receiving universal credit" The Joseph Rowntree Foundation said that this extra investment "will help make universal credit a tool for tackling poverty" And we have gone further, recognising the genuine concerns raised about the support we were offering people, especially the most vulnerable, when they moved to universal credit We have made a further £1 billion package of changes, providing two additional weeks of Department for Work and Pensions legacy benefits for those moved on to universal credit—a one-off non-repayable sum that will provide claimants with extra money during the period before they receive their first universal credit payment. This is on top of the two additional weeks of housing benefit announced at autumn Budget 2017 and put into place this year We will also support the self-employed in moving to universal credit. We will open up a 12-month grace period before the minimum income floor is applied, supporting 130,000 self-employed claimants—because we are the party of business; the party of aspiration. We will support those in debt by reducing the normal maximum rate at which debts are deducted from universal credit awards from 40% to 30% of standard allowances. This will help over 600,000 families to manage their debts at any one point when roll-out is complete, providing them with, on average, £295 extra a year as their debts are repaid over a longer period. This is targeted support to help work pay and support the vulnerable, which is why today I lay regulations to deliver the next phase of universal credit—managed migration, through which people will be moved on to universal credit. That is a move from a system that trapped people on benefits and created cliff edges at 16, 24 and 30 hours with punitive effective tax rates of over 90% for some. Under Labour, between 1997 and 2010, benefit spend went up by 65%. In 1997, households were paying £5,500 in taxes to fund the benefits system—and by 2010, the figure had risen to £8,350. The Conservative party was voted into office to manage the country’s finances and get them under control, and also to make sure that the benefits bill was affordable and sustainable for the future. While Labour Members may hanker for the dark old days of trapping people on benefits, excluding them from the opportunity of work and getting on in life, and at the same time delivering a big bill to the taxpayer, we do not. Under this Government, 3.4 million more people are in work, and the vast majority of those jobs are full-time permanent roles. This means that we have created more new jobs in the UK since 2010 than France, Spain, Ireland, the Netherlands, Austria and Norway combined, alongside creating a welfare system that supports those who need it Through universal credit, about 1 million disabled households will receive about £100 extra, on average, per month through more generous support. The Universal Credit (Managed Migration) Regulations 2018 will, in addition, protect 500,000 people’s severe disability premium at the point of migration, and deliver transitional protection for those we move to ensure that, at the point of moving, those managed-migrated have their entitlements protected. We will take a measured approach to delivering managed migration, taking our time to get it right and working with claimants to co-design it We have taken on board, and will continue to do so, the advice of experts and charities such as the Social Security Advisory Committee, whose report on the regulations we have published, along with our response, today. We have accepted, in full or in part, all but one of its recommendations—and the one we did not accept is because we want to make it more generous. I pay tribute to the hard work of the SSAC in scrutinising our regulations We have changed a key part of the regulations, as charities have asked me, MPs and the Department, relating to the minimum statutory notice period for people moving from their legacy award to universal credit. We have extended this period from a minimum of one month to a minimum of three months to allow claimants maximum time to prepare and make their claim before their legacy award expires. Alongside this, we have unlimited flexibility to extend claim periods for people who need it. We will backdate any claimant who has missed the deadline date but has made a claim within a month of the deadline day passing. We will test a variety of communication methods, including advertising campaigns, face-to-face communication, letters, texts, telephone calls and home visits, to provide support for claimants during managed migration. We will constantly review our approaches, engaging fully with charities, experts, claimants and all Members of the House. I commend this statement to the House.