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Universal Credit

Part of the debate – in the House of Commons at 3:14 pm on 17th October 2018.

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Photo of Neil O'Brien Neil O'Brien Conservative, Harborough 3:14 pm, 17th October 2018

The case for UC long predates this Government. Opposition Members will recall that Labour welfare Secretary James Purnell proposed something very similar in 2008, and the Institute for Fiscal Studies called for the same thing. Why was there that consensus? Why is this the right thing to do? It is because we had a system that had grown up in a piecemeal way over time, and that had led to perverse consequences. In particular, large numbers of people on housing benefit and tax credits were losing 90p in every extra pound that they earned. There were mad situations, such as the one trapping people on 16 hours a week because there was no incentive to earn more. I know some of those people and it is good that we are fixing that problem through UC.

One SNP Member disputed the idea that UC was improving work incentives, so let me tell him what the IFS says. It says:

“UC will still strengthen work incentives overall. Importantly, UC will have the welcome effect of strengthening work incentives for groups who face the weakest incentives now: the number of people who keep less than 30% of what they earn when they move into work will fall from 2.1 million to 0.7 million. ”

So we are talking about a huge improvement; UC is breaking that welfare trap. Maria Eagle said we should scrap UC, but, with respect, I do not think even the more sensible Members opposite believe that.

UC is one reason why we are seeing more people moving into work and we have record employment. It is why youth unemployment has been halved under this Government and 3.3 million more people have been helped into work.