Budget 2018: People in Work

Oral Answers to Questions — Work and Pensions – in the House of Commons at 12:00 am on 19th November 2018.

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Photo of Victoria Prentis Victoria Prentis Conservative, Banbury 12:00 am, 19th November 2018

What steps the Government have taken in Budget 2018 to ensure that people in work keep more of what they earn when in receipt of universal credit.

Photo of Alok Sharma Alok Sharma The Minister of State, Department for Work and Pensions

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.

Photo of Victoria Prentis Victoria Prentis Conservative, Banbury

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?

Photo of Alok Sharma Alok Sharma The Minister of State, Department for Work and Pensions

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.

Photo of Grahame Morris Grahame Morris Labour, Easington

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?

Photo of Alok Sharma Alok Sharma The Minister of State, Department for Work and Pensions

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 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.