Universal Credit - Statement

Part of the debate – in the House of Lords at 5:28 pm on 5th November 2018.

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Photo of Baroness Buscombe Baroness Buscombe The Parliamentary Under-Secretary of State for Work and Pensions 5:28 pm, 5th November 2018

My Lords, with the leave of the House, I shall repeat a Statement made in another place by my right honourable friend the Secretary of State.

“Mr Speaker, I would like to make a Statement on the changes announced to universal credit in the Budget last week and on the managed migration regulations, which we are laying in the House today. The Chancellor announced a substantial package at the Budget to ensure that millions keep more of what they earn, and vulnerable claimants are supported when they move to universal credit. In total, this package will be worth an extra £4.5 billion across the next five years.

I want to say a special thank you to all the colleagues, charities, third sector organisations, Jobcentre Plus staff and claimants who fed back to me to build this package of support to ensure universal credit is a fair system, supporting thousands who cannot work, as well as thousands who can. I would also like to thank my right honourable friends the Prime Minister and the Chancellor for their support to deliver these measures.

Make no mistake: this is a department that listens and a department that will continue to listen, adapt, change and deliver. We will put an extra £1.7 billion a year into work allowances, increasing the amount that hard-working families can earn by £1,000 before universal credit is tapered away—providing extra support for 2.4 million working families. Of course, the Opposition do not like helping 2.4 million families, which is why they are laughing, because we help and support people into work. That is why it was welcomed not only in this House but among charities like the Child Poverty Action Group, which said:

‘The work allowance increase is unequivocally good news for families receiving universal credit’; and the Joseph Rowntree Foundation, which said that this extra investment,

‘will help make Universal Credit a tool for tackling poverty’.

We have gone further, recognising the genuine concerns raised about the support we were offering people, especially the most vulnerable, when they move to universal credit. So we have made a further £1 billion package of changes, providing two additional weeks of DWP legacy benefits for those who move on to universal credit—a one-off, non-repayable sum that will provide claimants with extra money during the period before they receive their first universal credit payment. This is on top of the two additional weeks of housing benefit announced at Autumn Budget 2017, and put into place this year. We will also support the self-employed moving to universal credit. We will open up a 12-month grace period before the minimum income floor is applied, supporting 130,000 self-employed claimants, because we are the party of business—we are the party of aspiration.

We will support those in debt by reducing the normal maximum rate at which debts are deducted from universal credit awards, from 40% to 30% of standard allowances. This will help over 600,000 families to manage their debts at any one point when rollout is complete, providing them with, on average, £295 extra a year as their debts are repaid over a longer period. This is targeted support to help work pay and support the vulnerable.

That is why today I lay regulations to deliver the next phase of universal credit: managed migration, through which people will be moved on to universal credit. It is a move from a system that trapped people on benefits and created cliff edges at 16, 24 and 30 hours, with punitive effective tax rates of over 90% for some. Under Labour, between 1997 and 2010, benefit spend went up by 65%. In 1997, households were paying £5,500 in taxes to fund the benefits system, and by 2010 it had risen to £8,350. This party was voted into office to manage the country’s finances and get them under control, and to make sure that the benefits bill was affordable and sustainable for the future. So while the party opposite may hanker for the dark old days—trapping people on benefits, excluding them from the opportunity of work and getting on in life, while at the same time delivering a big bill to the taxpayer—we do not.

Under this Government 3.4 million more people are in work, the vast majority of which are full-time and permanent roles. That means that we have created more new jobs in the UK since 2010 than France, Spain, Ireland, the Netherlands, Austria and Norway combined, alongside creating a welfare system that supports those who need it.

Through universal credit, around 1 million disabled households will receive around an extra £100 on average per month through more generous support. The managed migration regulations will, in addition, protect 500,000 people’s severe disability premium at the point of migration, and will deliver transitional protection for those we move, to ensure that at the point of moving, those manage-migrated have their entitlements protected.

We will take a measured approach to delivering managed migration, taking our time to get it right and working with claimants to co-design it. We will continue to take on board the advice of experts and charities such as the Social Security Advisory Committee, whose report on the regulations we have published, along with our response today. We have accepted in full or part all but one of its recommendations, and the one we did not accept is because we want to make it more generous.

I pay tribute to the hard work of the Social Security Advisory Committee in scrutinising our regulations. We have changed a key part of the regulations, which charities, MPs and the department have asked me about, which relates to the minimum statutory notice period for people moving from their legacy award to universal credit. We have extended this period from a minimum of one month to a minimum of three months, to allow claimants maximum time to prepare and make their claim before their legacy award expires. Alongside this, we have unlimited flexibility to extend claim periods for people who need it. We will also back-date any claimant who has missed the deadline date but who has made a claim within a month of the deadline day passing. We will also test a variety of communications methods, including advertising campaigns, face-to-face communication, letters, texts, telephone calls and home visits. This will provide support for claimants during managed migration. We will constantly review our approaches, engaging fully with charities, experts, claimants and all Members of this House. I commend this Statement to the House”.

My Lords, that concludes the Statement.