Universal Credit Standard Allowance: End of Uplift

Work and Pensions – in the House of Commons on 8th November 2021.

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Photo of Sarah Olney Sarah Olney Liberal Democrat Spokesperson (Business, Energy and Industrial Strategy), Liberal Democrat Spokesperson (Transport)

What steps she is taking to support families affected by the end of the uplift to the standard allowance of universal credit.

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

The Government have always been clear that the £20 uplift was a temporary measure. Universal credit recipients in work will soon benefit from the reduction in the taper rate from 63% to 55%, with work allowances increasing by £500 a year, meaning that nearly 2 million working households will keep about an extra £1,000 a year on average.

Photo of Sarah Olney Sarah Olney Liberal Democrat Spokesperson (Business, Energy and Industrial Strategy), Liberal Democrat Spokesperson (Transport)

My constituent Simon Holroyd lost his mother to covid and is a single father to 10-year-old twins. He worked in the hospitality industry all his life to a senior level, but since the pandemic he has struggled to find work and is reliant on universal credit. His life before the uplift was removed was, in his words,

“a revolving mess of balancing debts”.

Now his situation is desperate. The Minister and the Secretary of State have both referred to the uplift as temporary, but for claimants such as my constituent who were not claiming universal credit before the uplift, the removal of the £20 is experienced only as a loss. Will the Minister commit to reintroducing the uplift?

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

With 1 million vacancies and above in the UK and with a comprehensive plan for jobs, our focus absolutely has to be on helping people into work, particularly in the hospitality sector, where there are vacancies. I hope that there might be a vacancy for the hon. Member’s constituent.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

May I thank the Minister and especially the Secretary of State for really pushing for the cut to the universal credit taper rate that we saw in the Budget? It will make a real difference to families on low incomes. There are more than 1 million job vacancies right now, plus the Budget measures to strengthen work incentives—cutting the withdrawal rate, boosting the work allowance and increasing the national minimum wage. Does that not all add up to the best opportunity in more than a generation to bear down on long-term unemployment in this country?

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

Absolutely. I credit my right hon. Friend: I know that he has been a champion of improving the taper rate over many years, and it was a pleasure to work with him as a Parliamentary Private Secretary when he was Secretary of State for Work and Pensions. Now is the time for us to take forward opportunities for people, given the Budget measures that have been put in place, and help long-term unemployed people into work through the sector-based work academy programme and the restart programme, which the employment Minister—the Under-Secretary of State, my hon. Friend Mims Davies—is taking forward with her characteristic verve and enthusiasm.

Photo of Stephen Timms Stephen Timms Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

Unemployment support is now at the lowest level in real terms for more than 30 years, even though the economy has grown by more than 50% in real terms over that period. As a proportion of average earnings, it is the lowest ever—lower than when Lloyd George introduced unemployment benefit 110 years ago. Why has unemployment support been set at this historically extremely low level?

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

It is always important to have a safety net, but it is also very important to make sure that we get people into the world of work, and that is what our focus is, as I have said repeatedly in my answers today. With 1.1 million vacancies and with a plan for jobs, that has to be our focus.

Photo of Ben Spencer Ben Spencer Conservative, Runnymede and Weybridge

Does my hon. Friend agree that we must look at both money in and money out, and that the cost of living is causing pressures for worse-off families? Will he update the House on the work that the Department is doing in looking at the cost of living, particularly childcare and housing costs?

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

We have already provided a range of measures. Eighty-five per cent. of childcare costs are covered by universal credit, and extra support has been provided through the increase in the local housing allowance. So steps are being taken, but I understand my hon. Friend’s point about childcare. Clearly, we need to focus on it further, and we will.