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In-Work Poverty

Volume 670: debated on Monday 27 January 2020

May I welcome you, Mr Speaker, and the hon. Lady to your respective places? Since 2010, there have been more than 3.8 million more people in work and 730,000 fewer children growing up in workless households. Over three quarters of this employment growth has been in full-time work, which has been proven substantially to reduce the risk of poverty. But it is not enough to have just any job: we want people to be able to progress in the workplace. To do this, we are investing £8 million to develop the evidence about what works to support people to progress.

Just 33 working hours into January this year, FTSE 100 bosses had already earned more than the average worker makes over the entire year. Since the Conservative party came into power, wages have faced their biggest peacetime squeeze since the Napoleonic era, and more than 4 million people are now in work but none the less still in poverty. It should be no surprise that the economy works for the super-rich and fails for everyone else, when the Conservative party is funded by a third of UK billionaires. Given that shameful record, why should my constituents believe a word that this Government say about tackling the scourge of poverty pay?

As far as I am concerned, one person or family in poverty is one too many, and I will work to tackle that while I am in this role. The statistics show that full-time work substantially reduces the chances of poverty. The absolute poverty rate of a child when both their parents work full time is only 4%, compared with 44% when one or both parents are in part-time work. We are supporting people into full-time work where possible by offering, for example, 30 hours of free childcare to parents of three and four-year-olds. The jobcentre in the hon. Lady’s constituency is doing incredible work in this area, and I strongly recommend that she visit.

What impact does the five-week wait for universal credit have on levels of in-work poverty and on poverty overall?

Nobody needs to wait for an initial payment. An emergency or urgent payment of up to 100% of the first indicative award can be made within the first day in many cases. It is interest-free and repayable over 12 months, increasing to 16 months as of next year.

I am unsurprised that the Minister did not know the answer to that question because, in response to a freedom of information request from the Poverty Alliance, the Government said that they did not hold that information. Following on from the National Audit Office saying that there is no evidence that universal credit has any link to increased employment levels, we now know that the Government have done precisely nothing in an area in which MPs, expert charities, the Scottish Government and local authorities are screaming for change. Will this Minister encourage the UK Government to open their tin ears and fix universal credit?

I recommend that the hon. Gentleman visits his local jobcentre and speaks to work coaches, because they will tell him about the impact of universal credit. More people are getting into and staying in work. Importantly, we do listen to hon. Members from across the House and to stakeholders within the Department. In addition to the measures I mentioned earlier, we now have a two-week run-on for housing benefit and will have a run-on for other legacy benefits as of October next year.[Official Report, 30 January 2020, Vol. 670, c. 8MC.]

The reality of the so-called jobs miracle is nothing but a mirage for families up and down the country. Two thirds of children living in poverty are in working households, earnings have not even recovered to 2008 levels, and the use of zero-hours contracts went up by 15% last year. Will the Minister have a word with the Prime Minister and get zero-hours contracts kicked into touch once and for all?

Employment has increased by over 3.8 million since 2010; the employment rate is 76.3%; unemployment is at its lowest rate since the ’70s; wage growth is outstripping inflation and wages are increasing at their fastest rate in a decade; and we have around a million fewer workless households and a record low 730,000 children in workless households. That is a record that we should be proud of. The hon. Gentleman talks about zero-hours contracts, but they account for 2.7% of the labour market and work very well for many people.

With average weekly earnings having risen by 3.4% compared with last year, and with the national living wage set to receive its largest cash increase in April, does my hon. Friend agree that the Conservative party and this Conservative Government can rightly claim to be fighting poverty for hard-working Britons?

I thank my hon. Friend for that question. She is absolutely right that real wages have risen for over a year—22 months in a row. Total wages have risen by 3.2%, but we want to go further, which is why the Chancellor announced that the national living wage will rise to £10.50 by 2024 as part of our drive to end low pay.

Trapping families in welfare year after year, which was a key feature of the last Labour Government’s welfare policy, never got anybody out of poverty. Does the Minister agree that the surest foundation on which to build a true anti-poverty strategy is to have an expanding workforce and increasing incentives for people to work?

My right hon. Friend is absolutely right. The Institute for Fiscal Studies slammed Labour’s pledge to scrap universal credit as uncosted and

“unwise…expensive, disruptive and unnecessary.”

We believe that work should always pay. We need a welfare system that helps people into work, supports those who need help and is fair for everyone who pays for it. Let us remember that no Labour Government have ever left office with unemployment lower than when they started.

Can the Minister confirm that this Government’s numerous increases to the personal allowance since 2015-16 have taken a further 1.74 million people out of income tax altogether?

Absolutely. Income inequality has been falling under this Government in real terms, and the national living wage will rise to £8.72 in April and to £10.50 by 2024. My hon. Friend rightly points out that our tax changes have made basic-rate taxpayers over £1,200 better off than in 2010. We have doubled the free childcare available to working parents of three and four-year-olds to 30 hours per week, saving them up to £5,000 per year per child.