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Universal Credit

Volume 541: debated on Monday 5 March 2012

We are making good progress towards the delivery of universal credit in 2013, and I have fortnightly progress meetings with officials and weekly reports from my office. I also chair the universal credit senior sponsorship group, which brings together all Government Departments and agencies that are relevant to the delivery of universal credit. Design work is well under way and is being continually tested with staff and claimants, and the development of the necessary IT systems will continue in parallel.

Many of my constituents complain to me that the current benefits system is far too complicated. There are more than 50 different benefits that people can claim, although no one appears to know the exact number, which leads to huge confusion among those who are genuinely in need. Can the Secretary of State confirm that universal credit will reduce that complexity, improve the user experience and, most important, make clear to all claimants that it will always pay to work?

I can confirm that. Universal credit will put together all the benefits that are relevant to people going back to work. Benefits that are not relevant to the Work programme will not be included, but the rest will. That will hugely slim down the complexities, and will ensure that people understand that in every hour for which they work, they are better off in work than out of work. The migration will take place in three phases over four years, and each phase will bring in a new group of claimants of those different benefits until we have finally completed the process and there is a single universal credit.

As the Secretary of State says, when the universal credit is introduced in October 2013, a couple with two children and working 16 hours a week will be better off in work than on benefits, so why is he introducing changes to the working tax credit this April that will make the same family £728 a year worse off than an equivalent family with no one working? That does not seem to make much sense in policy terms.

The tax credit system, which the hon. Lady’s party left us, is administered and run by the Treasury. She said that I was bringing this measure in, but the Treasury has made that policy decision. [Interruption.] Before Opposition Members get over-excited, I should add that I of course fully support everything my colleagues at the Treasury do. I remind the hon. Lady that when universal credit is reintroduced, people who fall into the bracket in question will be £95 better off than they would be on benefits. I also remind Opposition Members that we inherited a massive debt that the last Labour Government racked up, and we have to reduce it. This measure is one of the mechanisms by which to do that.