The Secretary of State’s Handling of Universal Credit

Julian Knight Excerpts

Wednesday 11th July 2018 Commons Chamber

[Julian Knight (Solihull) (Con)]

When the Government first announced their intention to implement universal credit, it was past the time when we should have grasped the nettle of welfare reform. The existing system was simply failing claimants. It was difficult to navigate—people missed payments to which they were entitled because of the complexity and the myriad different benefits—and it created perverse incentives that locked people out of work. It was truly time for change.

Universal credit was introduced to do several things. First, it was intended to simplify the complex system of different benefits, allowances and tax credits that had preceded it. Streamlining services will not only make them easier to administer, but, crucially, will make the system much more transparent for the user. That is further reinforced by the Government’s decision to invest £200 million in budgeting and digital support to help claimants, as we heard earlier from the Secretary of State. I am sure nobody ever intended to create the strong disincentives to work which ended up being baked into the previous system; it was simply very difficult to keep track of how many different welfare systems would interact with each other in the real world and over such a long period of time.

Creating a system that makes sure that work pays was the second goal of UC. I hope Members on both sides of the House agree that it was not right that some of the poorest people in our society faced some of the highest de facto marginal tax rates as a result of the previous system. Nobody should have to face a pay cut to move from welfare into work. A good job is about so much more than money: employment boosts our independence, our self-respect and our mental health. All claimants deserve the best possible chance of fulfilling their potential and building a strong, long-lasting career.

I am pleased that the Government have recognised that implementing such sweeping reform is a complex and sensitive task, and have adopted an incremental approach that allows Ministers and civil servants to adjust the roll-out—recalibrate at certain times—based on the feedback on the ground. That stands in sharp contrast to the chaos, which I remember from having worked in consumer affairs in the early 2000s, of the sudden “big bang” of tax credits. It is to the Secretary of State’s credit that she has listened since coming into office and has made so many crucial changes.

To sum up, UC is a fantastic idea and the implementation is coming along—we are getting there. We understand that not everything is perfect, but we are making the effort, and we need Members in all parts of the House to recognise that the system is crucial to moving people from a dependency culture into the world of work, not just for them, but for their families and our society.