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Universal Credit

Volume 624: debated on Monday 27 March 2017

The roll-out of universal credit continues to roll out to plan—[Laughter.] About a million claims have now been taken, and the full universal credit service for all claimant types is available in 53 jobcentres.

I shall not mention hon. Members’ ridicule of the Minister’s answer, but I want to raise another point about universal credit: the interaction between passported benefits and universal credit, and the progress on this that the Government are making. My constituents tell me that as they get into work and move through universal credit, they lose free school meals, bus passes for their children and entitlement to a free uniform, so they are much worse off in work than they would be if they were not in work.

We continue to work closely with partners and stakeholders to ensure that this service is a success. There are some questions about passported benefits and we continue to work through them.

I thank my right hon. Friend the Secretary of State for coming down to see the successful roll-out of universal credit in Canterbury, where nearly a third of the unemployed now enjoy universal credit. That has not only pushed down the level of unemployment, but resulted in remarkably few cases coming to my surgeries.

Universal credit is a transformational benefit. It converts six benefits into one, which means working with one organisation and not three. It supports people into work and makes sure not only that work pays, but that it is visible to the individual that work pays. It is indeed transformational in our system.

In just a few days’ time, austerity cuts to universal credit come into effect that will further cut the incomes of millions of working families, including families with disabled children, who could lose about £1,600 a year, while single parents in full-time, low-paid work could lose almost £200 a month. Was the intention of universal credit to drive up poverty among disadvantaged children? If not, why will Ministers not accept that the system is failing those whom it was designed to help?

No such cuts are about to happen in universal credit. The taper change from 65% to 63% will eventually benefit 3 million households.

Mounting evidence from the full service roll-out areas exposes the fact that the universal credit system is beset with failure. It is simply not working. Rent arrears are soaring, claimants are waiting up to three months to have their claims processed and some people have even lost their homes. The Government need to get their head out of the sand, so will Ministers call a halt to the full service roll-out while they conduct an immediate review?

We will not call a halt to the roll-out, because it would be unfair and wrong to deprive people in Scotland or elsewhere of the advantages that the universal credit system brings. We continue to work on improving processes and accelerating delivery, including with respect to housing, and a number of improvements have already been made, with more in train.

Last week’s report by the Equality Trust illustrates just how extreme inequality is in the UK, with the average pay of chief executive officers of FTSE 100 companies standing at £5 million a year. From this April, families on low incomes who are claiming tax credits or universal credit will not receive support for the third and subsequent children in a family, except when the child is disabled. In that instance, however, the money will be withdrawn from one of the other children. Will the Government address this injustice and scrap the two-child limit?

The purpose of the limit on support through universal credit or tax credits to the first two children, in the case of new claims and new births, is to reduce our welfare spending and to target it in a particular way—[Interruption.] In some 85% of families that include children, there are one or two children. When it came to determining where necessary reductions must be made, this was the correct way of doing that.

The hon. Lady talks about rising inequality. I simply mention to her that inequality is down, and that household incomes are at a record level.