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House of Commons Hansard
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09 October 2017
Volume 629
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13. Whether he has plans to reduce the taper rate for universal credit claimants. [901045]

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We have already made the taper rate more generous by reducing it from 65% to 63% in April this year, which means that recipients can keep more of every pound they earn.

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A taper rate of 63p in the pound is, in effect, a tax rate of 63% on net income. Surely the Minister accepts that that is a punitive rate and a barrier to work.

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This all has to be seen in the context of our reducing the benefit withdrawal rates and making it more attractive to go into work. Of course I understand the attraction of reducing the taper rate, which is why we have done it, but there is also always a trade-off with costs; reducing the rate from 65% to 63%, as we have done, carries a cost—an investment in the system of £1.8 billion.

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Is not the whole point of a pilot to test a system and then change it before it is rolled out further? Many of my constituents are in the universal credit pilot scheme. Given my caseload from them, I was horrified today to receive letters about all the rest of the jobcentres in my constituency getting universal credit roll-out. This needs to be looked at, along with the taper and many other issues, before it is rolled out further.

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In days of yore, such big changes used to be done via a big Gantt chart on the wall and then one day things going live. That is not how universal credit has been designed or rolled out; it is a very gradual process and has been being rolled out since 2013. The full service is now in more than 100 jobcentres, and we continue to update, evolve and improve it at every turn.

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If the hon. Member for Thirsk and Malton (Kevin Hollinrake), who has a similar inquiry at Question 17, were standing, I would call him, but if he is not, I will not—

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rose—

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He is now, so I will.

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17. Many of my constituents get paid weekly, and real cash-flow problems can be caused if they move from a weekly payment to a monthly payment cycle. Will the Minister set out what we are doing to help deal with these cash-flow problems? Will we keep these measures under review to make sure we provide a workable solution? [901051]

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Although most people these days are paid monthly, quite a lot of people are still paid weekly. When people move into a new job, they could then be getting paid weekly or monthly. There are two important things to mention here: advances, which have been extensively discussed during today’s questions, and the personal budgeting supports we offer to people to help them deal with changes in their cash flow.

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Universal credit claimants must wait a minimum of six weeks for their first payment, which does not reflect the world of work. Advance payments are not a remedy for that, because they are a loan, entrenching poverty and debt. Is the Department really going to ignore the unanimous plea from support and advice agencies to pause this roll-out?

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It would be wrong to pause the roll-out, because that would mean fewer people would have the benefit of universal credit, more people would be stuck on 16-hour jobs and fewer people would be able to claim the higher rate of childcare reimbursement. Universal credit is working; we know that people are getting into work quicker and that, once they are there, they can see clearly that working more will always pay.