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Working Families (Benefits)

Volume 587: debated on Monday 3 November 2014

1. What assessment his Department has made of the effects on working families of recent changes to the level of benefits. (905803)

Since the financial crash of 2008, while average wages have risen by around 10%, working age benefits have risen by around 20%—a sign of our commitment to those who are most vulnerable, despite the black hole in the public finances that we inherited.

In their relentless demonisation of those on benefits, this Government forget to say that only 3% of welfare spending goes on benefits to the unemployed, and a half of all those in poverty are in working households. In the north-east, working people are £1,800 worse off per year since this Government came to power, and a quarter of a million of them do not even get the living wage. Now the Minister decides to freeze working tax credits. Why is he balancing the books on the backs of the working people?

It is difficult to know which of those dubious assertions to choose from that question. [Interruption.] The hon. Lady asks which one is dubious. She says that 3% of what she calls welfare spending goes to the unemployed—[Interruption]—goes on benefits to the unemployed, so she presumably counts state pensions as welfare spending. I do not.

I welcome the news that over the last 12 months we have seen the largest annual fall in unemployment since records began. Does the Minister share my view that the best way out of poverty is through sustainable employment and a regular pay packet—something enjoyed by an extra 847 of my constituents since January 2013?

My hon. Friend is quite right. We know that the risk of a child, for example, being in poverty is three times as great if they are in a workless household rather than a working household. We have almost become blasé about new record falls in unemployment month after month. That is the key to our drive to tackle poverty.

I ask the Minister this week to support the living wage campaign in his own Department. Can he tell the House how many contracted-out workers outside London in his Department have yet to receive the living wage?

The right hon. Gentleman deserves great credit for his promotion of the living wage. My right hon. Friend the Secretary of State inherited a situation in which some of the Department’s employees were not receiving the living wage. Our Department has committed to it, and we have had that dialogue with our subcontractors as well.

I also welcome the rise in the living wage announced today. The Minister will be aware that jobseeker’s allowance claimant numbers are falling across the board in every single constituency in the north-east, and by 31% in my Hexham constituency over the last year. Does he agree with me that coming off JSA and into employment is surely the way forward?

My hon. Friend is quite right. It is entirely welcome that we are ensuring not only that more people get into work, but that work pays through the universal credit reform, which this coalition Government are proud to have introduced.

According to the Government’s own figures, 20% of working people in my constituency earn less than the living wage, yet they will lose hundreds of pounds a year through this Government’s freeze in working tax credit. How does that possibly reward people who want to work, and how can the Minister justify that when the Government give tax cuts to the wealthy?

The largest number of people who have benefited most from tax cuts during this Government are those who are in work and paying income tax. Under this Government, a typical basic rate taxpayer is £800 a year better off in cash terms as a result of our changes to the personal income tax allowance, and over 3.2 million individuals will have been taken out of income tax altogether.

Harrogate borough is part of the roll-out of universal credit, and the feedback from jobseekers and employers has been universally positive. Will the Minister explain a bit more about the benefits to the UK economy as a whole when this roll-out is completed?

My hon. Friend is quite right that the early indications from those receiving universal credit have been positive, in line with the expectations of my right hon. Friend the Secretary of State. We are designing the system to be simpler for people and to make sure that when they take work, work pays. Already those on the front line who are working with unemployed people are welcoming the new freedoms universal credit gives them to support people back to work.