Universal Credit: Household Income

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 6th November 2018.

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Photo of Gerald Jones Gerald Jones Shadow Minister (Defence) 12:00 am, 6th November 2018

What recent discussions he has had with the Secretary of State for Work and Pensions on the potential effect on household income of the roll-out of universal credit.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

Thanks to our universal credit and welfare reforms, we have a record number of families earning wages and a record number of children in houses with work, bringing more income.

Photo of Gerald Jones Gerald Jones Shadow Minister (Defence)

Labour Members and my constituents would gladly welcome the end of austerity, but the measures laid out in the Chancellor’s Budget certainly will not bring an end to it. Will the Chief Secretary clarify what proportion of the cuts to UC made by George Osborne in the 2015 Budget have now been reversed?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

In the Budget, we announced an additional £630 for every family on UC. The Resolution Foundation has confirmed that this is more generous than the previous benefits system, but it is also better at keeping people in work. The reality is that if the Labour party was in power there would be no money to spend on those families, there would be no money for tax cuts and taxes would be going up for ordinary people.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

The Minister knows this, but can she explain to Opposition Members that helping people into work and into higher rates of work, and keeping the credits and benefits they are entitled to matters, and that if Labour’s policy of freezing the roll-out of UC came in many people would not get the support they need to help them have the lives they want?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

My hon. Friend is absolutely correct. Under the previous Labour Government, we saw 20% of young people unemployed and we saw families trapped on benefits. What we have done is create a system where it pays to work. There are now a record number of children in houses where parents are out at work. That is good for them and good for the next generation.

Photo of Stephen Timms Stephen Timms Labour, East Ham

The Chancellor announced in the Budget a two-week run-on of legacy benefits for those being migrated to universal credit, but it takes five weeks for a universal credit payment to come through, so what does the Chief Secretary expect families to do in the three-week gap between those two?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

We already have an advances system that enables those families to be covered for that period. Universal credit is designed to mirror the world of work to make it easier for people to get into work and that is exactly what it is doing, as opposed to the previous benefits system, which trapped people in poverty and kept people where they are, which is what the Labour party wants to do.

Photo of Vicky Ford Vicky Ford Conservative, Chelmsford

Universal credit comes to my constituency next month. Will the Chief Secretary confirm that the changes made in last week’s Budget mean that there is more support for working families with children, more support for people with disabilities and more support for the self-employed and that, crucially, people will not need to wait five weeks for a payment?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

My hon. Friend is right on all those points. What we were also able to do in the Budget is make sure that there is £690 boost for those on the national living wage and a £130 basic rate tax cut. We were able to do that because of the improvement in the public finances, thanks to getting more people into work. The reality is that the reason we had £100 billion extra in our Budget is that this Government have taken responsible decisions.