Oral Answers to Questions

Stephen Timms Excerpts

Monday 28th November 2011 Commons Chamber

[Chris Grayling]

My hon. Friend makes an important point. There are several aspects to the scheme that we intend to review and consider as time goes by to see whether changes can be made to make the scheme even more effective. I will happily give serious consideration to the point he raises.

[Stephen Timms (East Ham) (Lab)]

The Low Incomes Tax Reform Group points out that tax credits today support self-employment much better than the proposals for universal credit will in future because universal credit will assume that people are earning at least the minimum wage, which is completely unrealistic in the early years of self-employment. Will the Minister look again at that particular problem with universal credit at least for people in the first year or two of self-employment?

[Chris Grayling]

We will monitor carefully how the decisions we have taken on universal credit work. As the right hon. Gentleman knows, we want to encourage and support self-employment, and we cannot allow people to shelter themselves on benefits under the false excuse that they are self-employed. In order to encourage people and to make sure that claimants are genuine, we are putting in place new rules. However, as I have said to him in Committee, every individual will have the right to self-assess or self-refer each month, so that we always get amounts right and do not penalise people who are trying to do the right thing.