Universal Credit Work Allowance — House of Commons, 2016-01-06
Topic: Social Welfare
Richard Michael John Ogilvie Graham (Conservative, Centre-right): We will keep his windy eloquence for a moment, if that is all right. He had quite a long go earlier The reason the hon. Gentleman said nothing about that is that if there are no changes to tax credits or housing benefit, he will not find £12 billion of welfare savings. I suspect that either he has no policy at all, because none was announced today, or that he has something pretty horrific to say on housing benefit that the House needs to hear After the windy eloquence of the hon. Member for Pontypridd (Owen Smith), we heard the relative still small voice of calm of the right hon. Member for East Ham (Stephen Timms), who described universal credit as a sensible idea whose implementation was a shambles. I would describe universal credit as an inspired idea, but it is one that the former Labour Chancellor, the former Member for Edinburgh South West, described as too complicated to be taken up by his party. I agree that the implementation has been over-optimistic so far, but it is happening and I have seen it happening. I will come on to that, because I am not sure how many Opposition Members have gone to their Jobcentre Plus to find out how it is working. It is already delivering positive change to the lives of my constituents and many other people. One can criticise a project that is delayed, but that is happening and successfully so, when one said that it was impossible to do it at all, but it risks looking like carping, which is not really worthy of the right hon. Member for East Ham The truth is that Labour Members cannot make up their mind whether to say that universal credit was a bad idea, full stop; that it is a complete or partial shambles; or that it was a good idea, but they are not sure whether it will be a shambles. They half hope that universal credit will collapse, so that they can criticise it more and call again and again for my right hon. Friend the Secretary of State for Work and Pensions to resign, but they know in their heart of hearts that they must support universal credit because it is the right thing to do and it will completely transform the working opportunities of so many people in this country The reason why universal credit is right is absolutely clear to all of us. When tax credits were introduced, they were a modest cost to the taxpayer, but that cost ballooned from £6 billion in 1998 to £28 billion by 2010. As I have hinted, the former Chancellor and former right hon. Member for Edinburgh South West has described more eloquently than any of us here today could how that project ran miles away from its original intention. Something that was launched with the best of intentions—to help people on low wages—became a massive cost. It was not just a cost in itself, but generated huge interest costs that were simply unsustainable for this country, particularly after the great recession of 2007 to 2009 In their heart of hearts, everybody in this House must recognise that universal credit is the way forward. I cannot believe that anyone here today who has been a Member for more than a few years has not received letters from constituents describing how their life on welfare makes it impossible for them to want to go to work, because they would be worse off working. I also cannot believe that Members here have not had meetings with employers in their constituencies at which they have described the number of times they have offered people who work for them promotions or a higher salary, only to be told, "Sorry, I don’t want that promotion. I would be worse off because I would lose more in benefits than I would gain from the promotion." Tax credits ended up as a disincentive to aspiration and achievement. Scottish National party Members may shake their heads, but that is the truth. What is also true, unfortunately, is that the welfare programmes that were introduced by the last Labour Government ended up, during the great recession, when 6,000 people in my constituency lost their jobs, many of them low-paid, trapping people on welfare with no incentive to go back to work. That is the background to the debate on universal credit. It is vital to our country that it works properly Those of us who have been to our Jobcentre Pluses where universal credit is being rolled out know that it is in place and working very well for single people. In Gloucestershire, it has not yet been introduced for families with children where there are two people who are in and out of work or in low-paid jobs. That is the more complicated element of universal credit. If my hon. Friends on the Front Bench are able to add more about the success of the rollout of universal credit to more complicated families with children, it would be reassuring for everyone. I have seen it in place in London and it seems to be working well I am conscious that there are time limits on us, so I will bring my contribution hastily to a conclusion. There are 156,000 people on universal credit who are receiving their benefits effectively. As I say, the people I have met in my constituency are definitely in a better place than they were. It is vital that universal credit continues to move forward as quickly as possible. I suspect that the figure of 156,000 will advance rapidly during this Parliament. We should all wish universal credit well. The changes that we are debating today are all part of a move towards a higher wage, lower tax, lower welfare society and away from what we were left in 2010, which was wages that were too low, taxes that were too high, unsustainable welfare and a system that was no longer working Let me finish by saying that I understand the emotional appeal of the speech by the hon. Member for Pontypridd, but it is vital that we reduce the cost of tax credits and the cost of welfare, and that we provide people with a system that incentivises them to work through universal credit.