Alok Sharma answers MPs’ questions to the Ministers at the Department for Work and Pensions.
Under the universal credit business case, we expect universal credit to deliver an economic benefit of £8 billion a year in steady state, and result in 200,000 more people moving into work. We published a labour market evaluation strategy on 8 June, setting out how these impacts will be measured.
I thank the Minister for his answer, but a recent Public Accounts Committee report on universal credit found that the Department, as it has in fact admitted, cannot empirically measure the number of people who are going back to work. I welcome the new Secretary of State to her place, but may I encourage her to read this report? How on earth, if the data are not reliable, can we meaningfully achieve any kind of target?
I encourage the hon. Lady to look at the document we have published about what we will be doing to measure this number. However, I also point her to the record levels of employment: the fact that there are more people in work in the economy right now than ever before, and that unemployment is at a 43-year record low. Jobs are being created and people are moving into work, and that is largely due to the welfare reforms that we have introduced.
Will the Minister elaborate on how much better off families on universal credit are now as a result of measures introduced in the Budget?
My hon. Friend raises an important point. Earlier this year we introduced £1.5 billion of support, and in the Budget there was £4.5 billion of support. I say to Opposition Members that it is all very well calling for support, but they also have to vote for these measures, which they never actually do.
The Minister knows that there are huge problems with the roll-out of universal credit in terms of debt, hardship and rent arrears. The new Secretary of State, whom I congratulate on her new post, needs to take time to look at those problems and address the severe poverty that is being caused, not to dismiss the UN report. I urge her and all the Work and Pensions Ministers to halt the roll-out. It will hit my constituency at the end of this month, and frankly, people are deeply worried that we are going to see delays, debt and hardship at Christmas. I urge Ministers: halt this roll-out now.
I hope that the right hon. Lady would also recognise that there are 1 million fewer people living in absolute poverty now than in 2010, when she was in government. If she is concerned about her constituents, I would be happy to talk to her and her local jobcentre to provide them with the assurances that they need.
The target is getting 200,000 extra people into work through universal credit. How many have been delivered so far?
Since the hon. Gentleman is keen to talk about the number of people in work, I point him to the universal credit claimant survey, which we published in June. It showed that under universal credit, employment levels almost double between the point of the claim and nine months into it.
In the Budget, the Chancellor announced a £1,000-a-year increase in work allowances from April next year. It will provide an annual boost of £630 for about 2.4 million working families across the country.
Does my hon. Friend welcome those announcements in the Budget? Does he agree that not all Labour’s legacies were as effective as those mentioned in the previous question, and that a system which penalised hard-working people with marginal tax rates as high as 90% was not effective?
My hon. Friend is absolutely right. Under the legacy benefits system, some people faced punitive marginal tax rates. The fixed taper rate under universal credit ensures that work always pays, and that is why we are seeing more people getting into work.
Work does not always pay—that is the problem. A million more children whose parents are working are living in poverty, and a million and a half people are relying on food banks. Why do the Government not implement Labour’s plan for a £10 minimum wage and ensure that work truly does pay?
As I said, we introduced a £1,000 increase in work allowances in the Budget. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), talked about the living wage, which was introduced by this Government and has risen by 4.4% this year. At the end of the day, however, we also want to ensure that people are getting into work. If the hon. Gentleman is particularly focusing on children, he will know that children living in workless households are five times more likely to be living in poverty than those in households in which the adults work.
I want to start by thanking my right hon. Friend for the engagement and support that she gives to her local jobcentre. As I have noted, we recently announced in the Budget a £1,000 increase in work allowances. We also have the single taper to ensure that claimants are better off working, and working more. Evidence also shows an increase in earnings for those in work and on universal credit by an average of £600 a year.
Can the Minister confirm that claimants on universal credit are more likely to move into work and more likely to make progress towards longer hours in work under this system, compared with the old system that we inherited from Labour?
My right hon. Friend makes an important point. Under the legacy benefits system, around 1.4 million people spent almost a decade trapped on benefits instead of being helped into work, and much of that time was under the last Labour Government. Under universal credit, people get into work faster, they stay in work longer and, very importantly, they earn more.
As we have pointed out, under universal credit people are able to get the one-to-one support with their work coach that was not possible under the legacy benefits system. Again, I reach out to the hon. Gentleman. If he has concerns in his own constituency, I am very happy to have a discussion with him and his local jobcentre, because we want to support absolutely every single person who is in the welfare system.
The welfare system undoubtedly encourages our constituents into work and rewards them in work, but the system does not always capture that because of the anomaly of the claimant count being used as a proxy for unemployment, whereas in fact many people who are on universal credit are working. What can the Minister do to try to improve the statistical way in which this is recorded?
My hon. Friend raises an important question. As he will know, we had a consultation on this particular point. We have published our findings, and I would be very happy to share those with him. Perhaps it would be appropriate for me to write to all colleagues setting out the changes that we are proposing.
Is it not obvious how few questions we have had from Conservative Members today on some of the biggest changes to welfare reform in a generation? I have raised with Ministers many times now the fact that those who are getting a change of circumstance as they move on to universal credit do not have the transitional protections at the moment. Ministers keep telling me that they do, but they do not. I have had universal credit in my constituency for a long time, and I could give them a catalogue of cases where people are worse off on universal credit as a result of this. With the new leadership at the Department, can the tin ear now be opened a little?
If the hon. Lady is keen on protecting people who move from legacy benefits on to universal credit under the managed migration process, I would invite her to vote for the regulations, with me and my colleagues, when they come through Parliament later this year.
If the hon. Gentleman has a particular case to raise, I am happy to discuss it, but I should say that I and my colleagues go up and down the country to jobcentres, and I am afraid that the characterisation that he described is not the one we find. We find work coaches who are really enthusiastic about delivering universal credit and supporting people on a one-to-one basis. When it comes to payments, 80% of people get their full payment on time for the first assessment period and 90% will be receiving at least part-payment, but of course we require information to be provided to us—for instance about childcare or other costs—before we can make those payments.
In March, I wrote to the DWP regarding a systematic error in the housing element of universal credit that was incorrectly deducting £70 from claims. I was assured that the fault was known and the fix was on its way, but eight months later my constituents are still having their money taken. When will the Government sort out this mess?