Universal Credit and Working Tax Credits — House of Commons, 2021-09-15
Topic: Social Welfare
Stephen Creswell Timms (Labour, Centre-left): I very much welcome the argument that the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) has just set out, and I am grateful to him for reaffirming his support for the £20 a week rise. Like him, I want to focus on the question of adequacy If this cut goes ahead, it will reduce real-terms support for an out-of-work family to the lowest level since Margaret Thatcher was Prime Minister. The economy has grown by more than 50% in real terms since then, but the Government’s proposal is that support for unemployed families should not have grown at all over those 30 years. That support will be about one seventh of average earnings, which is, as I said in my intervention on the Secretary of State, the lowest proportion of average earnings it has been since 1948. The Secretary of State made no attempt to justify why it was so low. I invited her to do so, but she did not, and of course it cannot be justified. The House of Commons Library tells us that, if we go back to 1911 when unemployment benefit was introduced, it was set at a higher level as a proportion of average earnings than the system will deliver if this cut goes ahead. The cut will take effect just as we are seeing prices surge, including food prices, as we have seen in today’s inflation figures, and energy bills, with the Ofgem price cap lifted The Work and Pensions Committee heard last week from a lone father of two children who told us what this was going to mean for him: "The uplift sent some relief and for that to be removed is going to leave us with that big question again: do I go hungry, do my kids go hungry or do we keep the house warm?" Somebody worrying about how to buy their next meal is not going to be able to focus on finding a decent job. Taking away £20 a week will leave the level of support below the basic minimum that is needed and that we require the system to provide The cut will hit working families hard as well. The Committee heard from working lone parents who will lose £86 a month from their income. One of them told us that "if one of the children gets a party invite—which some weeks is my worst nightmare because then I have to find the money for them to be able to do that—it is kind of a case of robbing Peter to pay Paul all of the time anyway. There have been months where I have to decide which bill I am not going to pay this month...you are constantly playing catch-up on utilities particularly...The extra £86 a month has allowed for us not to be doing that so much." And that is a parent who is in full-time employment. If this cut goes ahead, it will reduce support for working parents and unemployed parents below the basic minimum that we all want people to have to enable them to look for a job, or for a better job, and to care for their children—things we all want them to do. We will instead be imposing grinding hardship on a very large number of people at a time of surging costs and inflation. Taking away the £20 a week now will mean that the level of support provided will be less in real terms, given today’s inflation figures, than the support that was available going into the pandemic The Government have lost touch with what people are having to deal with. The Secretary of State’s claim that people could make up the extra £20 a week by working an extra two hours is simply wrong. Governments do lose touch, but this House must not. We must retain a recognition of the realities that people are dealing with. We need to grasp what this will do to families, even though Ministers do not. It is not just about numbers on a spreadsheet. Half of those claiming universal credit only started doing so during the pandemic. They are not returning to their former level of support. Many will have to get used to a lower income than they have ever had to cope with, and that will come as a rude shock to those who were convinced at the 2019 election, maybe for the first time, that the Conservative party understood what they were dealing with. Every former Work and Pensions Secretary since 2010 opposes the cut, as the right hon. Member for Preseli Pembrokeshire reminded us. It will leave the system unable to do the job we need it to do, and the House must reject this cut.