Budget Resolutions - Income Tax (Charge)

Part of the debate – in the House of Commons at 2:50 pm on 1st November 2018.

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Photo of Stephen Timms Stephen Timms Labour, East Ham 2:50 pm, 1st November 2018

Bill Grant touched on universal credit and I want to focus my remarks on that. There were significant changes in the Budget, which go some way to repairing the great damage of George Osborne’s 2015 cuts. Those changes will make a big difference particularly for families with children who rent their home.

However, the Budget does not affect those features of universal credit that plunge people into debt, forcing them to get behind with their rent and compelling them to use food banks at the start of their universal credit claim. The biggest of those factors is still the five-week delay between applying for universal credit and being entitled to benefit. Ministers can defend that gap only in the case of people who have a month’s salary cheque in the bank just before they claim.

The latest annual survey of hours and earnings shows that almost one in seven employee jobs are paid weekly. On top of that, there are fortnightly-paid jobs. What are those people supposed to do during the five weeks when they are waiting for their universal credit to be paid? I have asked Ministers that question repeatedly, but they simply do not have an answer.

It is extraordinary that it has been proposed to apply the five-week gap to people who are being migrated from existing benefits to universal credit. They do not have a salary cheque in the bank, but have been dependent on benefits, perhaps out of work on ill health grounds, claiming employment and support allowance, for a long time. They will be migrated on to universal credit, and it has been proposed that they too will have a five-week gap when they get no support at all.

The Chancellor announced a two-week run-on for previous benefits. That will not apply to tax credits and, particularly for those on ESA, there will still be a three-week gap. What are people supposed to do in that time? The Government are saying to them, “We’re changing the system and, as a by-product, you will get no help at all for three weeks.” Where can that idea have come from? How can Conservative Members, who, I am sure, meet—as we all do—people struggling to make ends meet from one payment period to another, have come up with the idea that people get no help for three weeks? Ministers need to address that urgently.