Alok Sharma responds to debate on Universal Credit

14th November 2018

Alok Sharma responds on behalf of the Government to a debate on the effect of the roll-out of universal credit in Nottingham.

It is an absolute pleasure to serve under your chairmanship, Mrs Moon. The hon. Member for Nottingham North (Alex Norris) gave us an interesting contribution, and we heard interventions from a number of colleagues. I will respond to those, but I start by putting into context where we are in terms of job figures.

I suspect we all agree that ultimately we want a welfare system that supports individuals, is fair to taxpayers and helps people into work. Yesterday, the Office for National Statistics published employment statistics that showed more people in work now than at any time. The rate of women in work is at a near record high. The employment rate for people with ethnic minority backgrounds is at a record high. Youth unemployment has halved since 2010. Since 2013, almost an extra 1 million people with disabilities have come into the workforce.

Some 3.3 million jobs have been created since 2010. There is always a discussion about what kind of jobs those are. Some people suggest that they are low-paid jobs that are not permanent, but that is not the case: 75% of the jobs created since 2010 are full time, permanent and in higher-level occupations that attract higher salaries—not my statistics, but those of the Office for National Statistics.

I thank the Minister for giving way—

Order. I am afraid that in a half-hour debate, interventions from the Front Bench are not permitted.

I am sure we have all heard what the Minister has said. Of course we welcome the fact that more people are getting into work, but many of the cases that we deal with in our constituencies are of people who are on universal credit not because they are out of work, but because they are in work and simply not earning enough to support their families. Many of the ways in which universal credit works do not support people who are in work, so people who have a fixed pay date but get paid early one month because the date falls on a weekend or a bank holiday find that they get two pay sessions in their universal credit assessment period and lose their universal credit altogether. Why is the Minister not addressing those concerns for people who are in work but not earning enough to be out of poverty?

I had just started to set out the case. Opposition Members have made a case, and I am responding to it.

I return to the point about the jobs that are being created. There is always a lot of noise about zero-hours contracts, and I am pleased that we as a Government have banned exclusivity in them, but in the economy right now, fewer than 3% of jobs are classed as zero-hours contracts and those individuals are working an average of 25 hours a week. The number of zero-hours contracts has come down this year.

I hope we are all pleased that wages are growing at the fastest rate in almost a decade. That is an incredibly positive development and I hope it will continue. I do not want to be churlish, but several hon. Members who were here in 2010 will remember that we were told by Opposition Members that 1 million jobs would be lost as a result of the Government’s policies. That has not happened. We have a buoyant jobs market with more than 3 million jobs created since 2010. Our welfare reforms have played a big part in ensuring that we are helping people get into work.

When we talk about universal credit, we have to compare it with the legacy benefit system that it replaces. As constituency MPs, we know that the legacy benefit system is incredibly complicated, with six benefits delivered by three different Government agencies, effective tax rates of 90% for some people and cliff-edges that disincentivise people from taking on work beyond a certain number of hours. As a result, 1.4 million people were trapped in benefits for almost a decade. Hon. Members talk about the amount of money in the system, but under the legacy benefit system, £2.4 billion of benefits are not claimed. That will change under universal credit, which will benefit 700,000 households to the tune of an average of £285 a month.

When it comes to universal credit, we are providing that support. I know that the hon. Member for Nottingham North has visited his jobcentre and sat with jobcentre staff. I am pleased that he has praised their work. He will know, because he has sat in on those interviews—as I saw in his newsletter—and seen the interaction, that for the first time in the welfare system, we are ensuring that one-to-one support is provided to the individuals we are interacting with. As part of my role, I regularly go up and down the country visiting jobcentres. Invariably, I hear from jobcentre staff that they feel that this system allows them to do what they came into the system to do—provide that one-to-one support. I find that incredibly heartening.

As I said, the cliff-edges are gone and we have a smooth taper. Under universal credit, people are getting into work faster, staying in work longer and earning more. In terms of support in the system, we introduced an extra £1.5 billion of support earlier this year. I am disappointed that Opposition Members did not vote with us on that, because it meant that the seven-day waiting period was abolished; two weeks of run-on in housing benefit was made available, which does not have to be repaid; and people can now get 100% advances on day one, if that is what they need, to help with any cash-flow issues. We can see that that is working, because 60% of people who are now coming on to universal credit are taking up advances. That is a result of the support that their work coaches are providing.

In last month’s Budget, another £4.5 billion net was injected into universal credit. Work allowances are up by £1,000, which will benefit 2.4 million families up and down the country, particularly those on low incomes, to the tune of £630 a year. In terms of helping individuals, as we have ensured that there is a two-week run-on for those who are on housing benefit coming on to universal credit, we shall also ensure that there is a two-week run-on of out-of-work Department for Work and Pensions legacy benefits for those who come across to universal credit as part of the managed migration process. Again, that will help more than 1 million households throughout the country.

Many people will have welcomed the Chancellor’s announcement that the universal credit work allowance was to be raised by £1,000, but it was raised for only some universal credit recipients. Admittedly, it increased for people with disabilities and parents with current responsibilities for children, but low-paid working couples whose children have left home or who do not have children were excluded. Poverty is poverty. Why was support provided for some families and some individuals but not others? Why did those working families not benefit from the £1,000 increase?

I would have more sympathy for the hon. Lady’s argument if she had voted to support the Budget, which Opposition Members did not do. I feel strongly that although it is right that hon. Members on both sides of the House raise the issues they have with any system or policy of the Government, the point where money is being put into the system to support their constituents and mine is the point at which they have to follow through and support those policies.

The hon. Member for Nottingham North has engaged with his jobcentre by visiting and taking part in a Disability Confident event organised by it, but that is not the same for all hon. Members present. I would encourage every single hon. Member—[Interruption.] I did not allude to the hon. Member for Gedling (Vernon Coaker), but there are hon. Members who have raised issues in the debate who have not visited their jobcentres recently. I encourage all hon. Members to engage with their jobcentres.

Where hon. Members have individual issues, they should raise them directly with the jobcentre and they should feel free to write to me as the Minister responsible. Again, I do not wish to be churlish, but—if I may put it like this—there has not been a large amount of correspondence about universal credit from hon. Members representing Nottingham, but where there are issues, they should feel free to raise them.

In terms of preparation by the local jobcentre, I had an opportunity yesterday, ahead of the debate, to speak to the district lead for Nottingham who is responsible for the three jobcentres. There has been a huge amount of engagement: 350 stakeholders have been met and eight or nine stakeholder events have taken place, including meeting landlords. That is all part of ensuring that we deliver what we all want for our constituents—a system that works.

Whatever our political differences, one thing that we can unite on is that we want a system that delivers, particularly for the most vulnerable, which is precisely what universal credit is doing. We want a system that supports the most vulnerable, that is ultimately fair to taxpayers, and that helps people into work.

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