Universal Credit: Household Incomes

Oral Answers to Questions — Work and Pensions – in the House of Commons on 7th January 2019.

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Photo of Mary Creagh Mary Creagh Chair, Environmental Audit Committee

What assessment she has made of the effect of the roll-out of universal credit on household incomes.

Photo of Justin Tomlinson Justin Tomlinson The Parliamentary Under-Secretary of State for Work and Pensions

Universal credit spends £2 billion more than the system it replaces. It simplifies the old system and makes work pay. It is already transforming lives across the country.

Photo of Mary Creagh Mary Creagh Chair, Environmental Audit Committee

Happy new year, Mr Speaker.

What an extraordinary answer. Some 10% of children in the UK live in severely food-insecure households. That is the highest number in the European Union. However and whenever the roll-out of universal credit starts, begins or enters into its full flood, will the Minister work with the Office for National Statistics to measure the extent of childhood food poverty before and after the introduction of universal credit?

Photo of Justin Tomlinson Justin Tomlinson The Parliamentary Under-Secretary of State for Work and Pensions

I think we all recognise that we need better-quality statistics. Various groups are working on alternatives, and the Government will take those seriously. As has been mentioned, there are 300,000 fewer children in absolute poverty. On the specific issue of food insecurity, in the past five years alone it has almost halved to 5.4%, which is 2.5% lower than the EU average.

Several hon. Members:

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Photo of Laura Pidcock Laura Pidcock Shadow Minister (Business, Energy and Industrial Strategy) (Labour)

Happy new year, Mr Speaker.

I note the delays to the roll-out of universal credit announced over the weekend, but will the Minister please tell us what justification there can possibly be for people who have had to claim universal credit so far not receiving any protections? Will the Secretary of State agree to halt natural migration, compensate every single person who has lost out, and investigate the circumstances that have led people on to universal credit when there has been no change in their circumstance?

Photo of Justin Tomlinson Justin Tomlinson The Parliamentary Under-Secretary of State for Work and Pensions

If the hon. Lady looked at the feedback we have had from stakeholders following this week’s announcement, she would see that they make it absolutely clear that they support universal credit over the legacy system. We know that 700,000 people—some of the most vulnerable people in our society—are missing out on £2.4 billion of support because the legacy system is too complicated. Universal credit gives personalised, tailored support and makes sure that people get the support that they need.

Several hon. Members:

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Photo of Jo Swinson Jo Swinson Deputy Leader, Liberal Democrats, Liberal Democrat Spokesperson (Foreign Affairs)

Thank you, Mr Speaker.

I hope that the delay to the full roll-out of universal credit is a sign that the Secretary of State for Work and Pensions is open to making the many changes to universal credit that are needed. I urge Minister to look in particular at the harsh repayment timescales for loans, which led my constituent to say:

“I should never have taken that 3 month job. It made me worse off”.

Surely that is the very opposite of what the Government are trying to achieve with universal credit.

Photo of Justin Tomlinson Justin Tomlinson The Parliamentary Under-Secretary of State for Work and Pensions

I, too, welcome the hon. Lady back.

This issue is a real priority for the Secretary of State. We have already made changes: initially, the repayment period was six months, then 12 months, and it is now 16 months, and we have moved the maximum deduction rate down from 40% to 30%. We will continue to review the situation.