Universal Credit Work Allowance

Gerald Jones Excerpts

Wednesday 6th January 2016 Commons Chamber

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

Thank you, Madam Deputy Speaker, for giving me the opportunity to speak in today’s debate. I promise that I will try to be brief.

In his autumn statement on 25 November, the Chancellor trumpeted that he was reversing the proposed cuts to tax credits in full, stating that he had abandoned plans to impose £4.4 billion of cuts from this April. It now appears that he is doing a U-turn on his U-turn, because in the short time since the autumn statement it has transpired that he has lined up similar cuts affecting many of the same working families, this time to universal credit. It seems that he is ushering in a new postcode lottery by pushing ahead with cuts to universal credit, which will leave some families up to £3,000 a year worse off than others in exactly the same circumstances.

We have heard the example of a single mother of two, working full time on the minimum wage and claiming universal credit, whose net income next year will be £2,981 lower than that of someone in the same circumstances who is claiming tax credits. Meanwhile, a single parent of two on a salary of £18,000 a year will see their overall income fall by £2,601 next year if they are on universal credit. As my hon. Friend the shadow Secretary of State indicated, analysis shows that from April, cuts to the work allowance will also mean an annual reduction of £2,000 a year in support for disabled people in work, which is clearly a particular concern.

My constituency will be hit hard by the proposals, with 2,000 families being affected in 2017, 5,000 in 2018, 8,000 in 2019 and 10,000 by 2020. Across our country, the need for food banks is increasing. I mention that because in many cases, food bank support is provided more to people in work than to those out of work. Perhaps if the Minister and the Secretary of State took the time to visit food banks and talk to the many thousands of volunteers, they would get a better appreciation of the hardship that is being endured. The proposals to cut tax credits will make matters much worse for people and hit working families—people the Government say they want to help and are committed to helping.

I say to Conservative Members that these measures will cause great hardship to many vulnerable families across our country, in all constituencies. The Tory Government have choices. We have seen announcements of billions being allocated to the most well-off by cutting inheritance tax and further support being handed to big businesses by cutting corporation tax.

[Oliver Dowden]

There is a repeated assertion on the inheritance tax cut. Even by 2021, the inheritance tax cut will cost less than £1 billion, which is in no way comparable to the savings that are achieved through the welfare reforms. We cannot magic up the savings by not proceeding with the inheritance tax cut alone.

[Gerald Jones]

That is one example of the wrong choices being made by the Government but there are others. They have given further support to big businesses by cutting corporation tax. They have chosen to continue the cut in the top rate of income tax from 50% to 45%, allowing someone earning £2 million a year to continue to pay £250,000 a year less in income tax. Those are clearly wrong choices, and they are made on the backs of ordinary working families. Against that background, the decision to penalise working families who are already struggling to make ends meet is wrong in so many ways.

The changes will cause worry and undue stress to millions of families. I therefore urge Conservative Members to support the Labour motion today, and not to turn their backs on working families.

Welfare Benefit Changes

Gerald Jones Excerpts

Wednesday 14th October 2015 Westminster Hall

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I pay tribute to my hon. Friend the Member for Swansea East (Carolyn Harris) for securing this important debate.

We have heard a number of concerns about the impact of the Government’s reforms to the welfare system. I want to focus on one particular aspect. The Welfare Reform and Work Bill will introduce new conditionality for parents with a three or four-year-old child who are claiming jobseeker’s allowance. In the future, once a child reaches three, both their parents will be expected to look for and prepare for work. That measure should be considered in the context of the Government’s promise to increase the free childcare entitlement for working parents of three and four-year-olds to 30 hours a week in England.

As often happens, the devil of this policy is in the detail. Let us start with England. Thirty hours of free childcare will come into force in September 2016. The increased conditionality for parents will come into force under clause 15 of the Bill in April 2016. That is six months in which parents with very young children will be expected to work, but will not be entitled to the free childcare they need.

Members will know that a legal entitlement is not at all the same as full implementation on the ground. Serious doubts have been raised about whether there is capacity in the sector to provide that extra childcare and whether it would be adequately funded. A recent analysis by the Pre-school Learning Alliance showed that the current average hourly cost of childcare per child is £4.53, with the Government contributing just £3.88. When increased to 30 hours, that means that nurseries would operate at an annual loss of £661 per child. That is surely not sustainable.

It is far from clear whether parents in England after September 2016 will have the benefit of the new entitlement, and I challenge the Minister to respond to this: what consideration has been given to the impact of this policy across the UK? I am not as familiar with the situation in Scotland and Northern Ireland, but I know that the Welsh Government currently support 10 hours of free childcare for three and four-year-olds, and there is additional support in “flying start” areas. The Welsh Government want to expand availability once the financial consequentials of the plans for England are known, but that is against the backdrop of a significant cut—around £1.3 billion, or 10%—to the Welsh budget by the UK Tory Government.

That brings me on to the serious problem of access to childcare, especially in rural and semi-rural areas, including parts of my own constituency. It is clear that availability of appropriate, accessible childcare that meets the needs of parents and children must be in place before the increased conditionality is introduced.

Lack of childcare is not the only problem with the policy. Conditionality can be extremely difficult for vulnerable parents, as we have heard. Care leavers, young parents, those with addictions and others often lack the skills and confidence they need to fulfil work-related activity requirements. Many need support to return to work, which is not always available. We know that jobcentres often lack the capacity and expertise to provide that support and to enable vulnerable parents to transition successfully into work

Barnardo’s has raised concerns that many jobcentres lack the basic facilities needed, especially for parents with young children, including bathrooms, and that staff can sometimes be unwelcoming when claimants bring their children to appointments. That is especially challenging for single parents with young children. It goes without saying that when increased requirements come into force for parents of three and four-year-olds, it will become even more important for jobcentres to address those issues. Given those difficulties, will the Minister commit to taking action to ensure that jobcentres adapt to meet the needs of parents and their children before the conditionality extension comes into force?

Another concern I have been made aware of is about the online system, which is now being used more and more. The system apparently frequently freezes, causing horrendous frustration, and the early indications are that the helpline is struggling to cope. Will the Minister look into that?

I will end on the sanctions regime. I agree with the concerns expressed by my hon. Friend the Member for Swansea East, specifically about the punitive and regressive impact that the sanctions regime will have on families with three and four-year-old children. We know that sanctions can be hugely disproportionate, and we have heard some horrendous examples of how bad they can be. We also know that the loss of benefits for weeks on end can leave families struggling to feed their children and heat their homes. Members will be aware that parents are being driven to food banks and into debt. For many families in my constituency of Merthyr Tydfil and Rhymney, that is a reality. I urge the Government to take action.

[Mark Pritchard (in the Chair)]

There are five Members still to speak. I will call Front Benchers from 3.30 pm, which allows everyone to have 10 minutes. I encourage Members to just speak for two or three minutes, to try to accommodate everyone.