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Universal Credit

Volume 621: debated on Monday 20 February 2017

10. What estimate his Department has made of the number of households in which a person in work will receive less income in universal credit than they would have received in tax credits. (908766)

It is not meaningful to compare against an unchanged tax credits system, but the national living wage, help with childcare and the straightforward taper in universal credit all mean that people can earn more, and a higher income tax allowance means that they can keep more of it.

A single parent working full time on universal credit will be up to £3,000 worse off than someone in the same situation on tax credits, as a result of this Government’s cuts. Does the Minister accept that those cuts are creating an unjustified disparity in the in-work support received by people in similar circumstances?

Anybody who changes from tax credits to universal credit as a result of managed migration can get transitional protection. For those who are coming into it with a new claim, it is a wholly different system with a completely different support set, including much more child care support. There are various other reforms from which the individual to whom the hon. Gentleman refers would also benefit.

Does my hon. Friend accept that universal credit, which now reaches almost a third of the unemployed people in my constituency, is a much simpler system and the first major new benefit introduced in my political lifetime that has not resulted in a whole string of correspondence from people with difficulties?

It is indeed a dramatic and critical reform for our welfare system. I will highlight just one statistic: for every 100 people who moved into work under the old jobseeker’s allowance system, 113 do so under universal credit.

Last week, DWP informed Members of Parliament that our constituents would have to give specific and precise explicit consent if we are to help them with full universal credit claims with which they have difficulty. I think that that will significantly inhibit our ability to assist our constituents. Will the Minister reassure the House that measures will be put in place to ensure that MPs can support our constituents effectively?

Of course we want hon. Members to be able to support their constituents, but the universal credit full service system is different because the online account allows the user to access a greater breadth of their data. The claimant holds the key to those data, and implied consent cannot be assumed. A claimant can give their consent via their journal, and that is what has to be done to enable a Member to act on their behalf.

Currently, families have to wait at least six weeks to receive universal credit after they have made a claim, which is leading to some people being in rent arrears and at risk of eviction. Research by the Child Poverty Action Group and the Trussell Trust found that about 30% of food bank users were waiting for the outcome of a benefit claim. What urgent action will the Government take to cut the delay at the start of universal credit claims?

Universal credit, as the hon. Lady knows, is a monthly benefit, but benefit advances are available where people cannot make it through to the first pay day. The fundamental point is that universal credit is helping more people into work, and once they are there, it is helping more people progress in work, and that is what is putting down the better foundation for their future.

Many families on tax credits and universal credit will lose out when the two-child limit comes into force in April. The Institute for Fiscal Studies projects a 50% rise in child poverty by 2020—the biggest in a generation—and it says that a key reason will be the impact of tax and benefit changes on families with three or more children. Do the Government think that some children matter more than others?

The policy to which the hon. Lady refers relates to new cases. I remind her that relative poverty is down by 100,000 children since 2010.