Meeting of the Parliament 06 November 2018
It goes without saying that there has been renewed discussion about the impact of universal credit and its effectiveness in recent weeks and months, and I welcome that discussion. We all agree that the roll-out should be done as sensitively as possible and that it should consider, first and foremost, the people whom the system set out to support.
As the Chancellor of the Exchequer said last week:
“Universal credit is here to stay”.—[Official Report, House of Commons, 29 October 2018; Vol 648, c 667.]
It is our duty to make sure that it becomes the success that it was designed to be.
A couple of weeks ago, I put on record my concerns about universal credit and called on the UK Government to implement it in a way that saw no one left behind. I called for measures to be put in place to reform the system before its full roll-out, and I asked that the most vulnerable in our society be reassured that their concerns would be listened to.
It is clear from today’s debate in the chamber that concerns will continue to be raised, but it is important that we recognise that there is fundamental support for the principle behind universal credit and that the UK Government will listen and respond—as it has done—to concerns as it is rolled out.
I have seen the effects of being trapped in a benefits system, with little opportunity to enter the workforce. When lain Duncan Smith MP visited Easterhouse in 2002, he recognised that the policies that were in place at that time simply did not work. He saw the need to give people an alternative to a life on benefits, and one that provides a safety net when it is needed most and that ensures that work will always pay.
That is the point: work is essential to tackling poverty. People who are out of work are much more likely to fall into poverty when they live in a workless household. We must support simplifying a welfare system that ensures that it always pays to work. It made no sense that, under Labour, the benefits system was so complicated that, for some people, there was little point in working more because they would lose more in benefits than they would earn in work.
Third sector organisations have supported the principle of universal credit. Just this week, the Institute for Fiscal Studies said that universal credit had
“large potential benefits from simplification and getting rid of the weakest work incentives.”
Last month, the Resolution Foundation said that the prize of a far simpler social security system was “well worth holding onto”.
The implementation of universal credit is as important as its guiding principles. The UK Government has listened to concerns and changes have been made over time. In 2017, the UK Government recognised the practical difficulties of implementing the system and made a number of changes totalling £1.5 billion in investment. An interest-free advance of up to a month’s worth of universal credit was made available from January 2018; the seven-day waiting period was removed from February; and from April 2018, those already on housing benefit could receive their award for the first two weeks of their universal credit claim.
Two weeks ago, changes made during the 2018 budget were welcomed: according to the IFS and the Resolution Foundation, the changes made universal credit more generous than the system that it replaced. The chancellor announced that, as of April 2019, universal credit claimants will benefit from a £1,000 increase in in-work allowances, meaning that working parents and people with disabilities on universal credit will be £630 a year better off.