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Universal Credit

Volume 519: debated on Monday 22 November 2010

20. What effects he expects the introduction of the proposed universal credit to have on marginal deduction rates experienced by households currently in receipt of tax credits only. (25127)

I repeat that the universal credit will benefit a large number of people, improving work incentives for some 700,000 people who will see their marginal deduction rates fall from about 96% to 76%. The specific group that the hon. Gentleman is talking about will have their withdrawal rates rise marginally, although that will be met by our guarantee that nobody will be a loser in the course of this.

I genuinely welcome the Secretary of State’s attempts to get more people incentivised and back into jobs, but does he accept that his proposals are more likely to fail because the regional development agencies that created many jobs in Rochdale and other parts of the country are to be replaced by what Lord Heseltine has called a “high-risk” regional growth fund?

I do not accept that point. We recognise that it is critical to create those jobs and we expect them to be created as the economy grows. The big problem with creating jobs under the previous Government was that 70% of all the jobs created in 15 years went to people from overseas and not from the UK. The big issue for us is getting people in the UK ready and able to do that work, which the Minister with responsibility for employment, the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is busy doing through the Work programme.

The Opposition seem convinced that the introduction of the universal credit will be dogged by IT difficulties. Does that not reflect their lamentable experience in this area? What reassurance can the Secretary of State give us that we will succeed where the previous Government failed so badly?

The previous Government had problems with IT development, as did lots of Governments—both sides accept that. To be fair, I have spoken to the shadow Minister, the right hon. Member for East Ham (Stephen Timms), who has been very positive about general developments. In his time, the development of the employment and support allowance computer was a very positive development, for which I compliment him. That is a very good example of the scale of computer development that we can undertake with the universal credit.