That this House calls on the Government to cancel its planned cut to Universal Credit and Working Tax Credit which from the end of September 2021 will reduce support for many hard-working families by £1,040 a year.
I reiterate what I said when we had this debate in January: while, understandably, strength of feeling is high when talking about something that affects so many families and households across the country, this should not be a debate with personal abuse or accusations of bad motive. I ask everyone following the debate at home to consider that, too. If we instead took a moment to assess the matter properly and considered not just the impact on the 6 million affected families but what is in the best interests of our economy as we recover from the pandemic and, crucially, what we need as a country to be able to face the inevitable shocks and economic problems that will come our way in the future, we would decide that it would be unconscionable to take this money away.
In my constituency, £10.5 million will disappear from the spending capacity in our local economy when more than 10,000 people and working families lose access to this benefit. Does my hon. Friend agree that that will have a tremendously bad effect on local spending power?
My hon. Friend is exactly right. The reduction of £20 a week for 6 million low-income families will be the single biggest overnight cut in the history of the welfare state—bigger even than the cut to unemployment benefit in 1931 that caused the Government of the day to collapse. The scope of the cut, affecting one in 14 British workers, is also unprecedented. For those reasons alone, it is right that we are having this debate and that our constituents know where we stand.
Will the hon. Member tell me how many households in his constituency are in receipt of universal credit? I am giving him a chance to put on the record how many of his constituents are affected. There is a whole section of my speech in which I will tell him how the Government can afford to pay for this.
I did not know that the hon. Member did not know the figure for his constituency—I promise that I was not trying to catch him out. I was simply trying to make the point that the recovery of his local economy would be adversely affected by taking that spending power away, as my hon. Friend the Member for Wallasey (Dame Angela Eagle) made clear for her constituency.
I thank the shadow Secretary of State for introducing this important debate. Northern Ireland has the highest levels of child poverty in United Kingdom of Great Britain and Northern Ireland. My mailbag, like everyone’s, is full of real-life stories of people worried sick about how they will be affected. Does he agree that the removal of the £20 universal credit payment will plunge even more people into food poverty and have a detrimental effect not just on their pockets financially but on their health? It is a double whammy, and they just cannot take it.
I agree with the hon. Member. Opposition to the cut is truly universal, for those reasons. It includes MPs, charities, unions and six former Conservative Secretaries of State for Work and Pensions. If we are being honest, I think several serving Conservative Ministers also share that view. In this debate, I want to knock down the fiction that there is somehow a choice to be made between cancelling the cut and getting people back into work. I want to talk about what the cut will mean for the families affected and the impact that it will have on all our local economies and the national resilience necessary to meet future challenges. I also want to talk about how the Government could easily fund universal credit at its current rate without making this counterproductive and harsh cut.
I am inundated every week by employers who simply cannot get workers. Should we not be seeking to raise the sights of many working people to get another, better-paid job? They are out there.
In the right hon. Member’s constituency, 4,000 households are in receipt of universal credit. I want to ensure that, at the beginning of the debate, we knock down the argument, which we have also heard from the Prime Minister, that a focus on jobs will somehow mean that we do not need to keep universal credit at its current level. Of course we should get people back into jobs, but it is simply false to say that the choice is between keeping the uplift and doing that.
Let me remind the House again that universal credit is an in-work benefit. Almost half of the incomes that Government Members wish to cut are of people in work. Either the Prime Minister, the Cabinet and several Conservative MPs do not know how universal credit works or they are being wilfully misleading. I do not know which is worse. Let us have a real debate rather than this ignorant rhetoric about work or welfare, because—this is the crucial point—if as a country we could get the people affected into better-paying jobs, the cost of keeping universal credit at its current level would go down automatically. That is exactly how the system is designed to work. Anyone saying that the cut needs to happen to get people back into work, or to get them working more hours, does not know what they are talking about.
The hon. Member is kind. I hope he will answer my intervention rather than re-intervene on me; I found that very odd earlier. Is it better in principle that people receive £20 through the benefits system or through going into longer hours, with more progress in work and building up a career where there is no limit on what they achieve?
Of course it is better that people are in work, but the whole point of reform in this area over the last decade and a half has been to try to create a system that integrates with the world of work. I cannot see how the hon. Member does not understand that. I cannot see the logic in his argument that a cliff edge is necessary for the outcome that he wishes to see.
My hon. Friend makes a compelling argument about universal credit being an in-work benefit for many people. I have been inundated with calls from constituents who are supermarket workers, teaching assistants and carers. They are already working long hours and they have gone above and beyond during the pandemic. Does he agree that this is not the way to thank those hard-working key workers for everything that they have done for this country?
I agree absolutely; that is the point. We saw in the exchanges between the Secretary of State and me on Monday, as well as in Prime Minister’s questions, that the Government’s proposition is that somehow people working full time will be able to work 50 or 55 hours a week, on top of what they are already doing. The Opposition are more than happy to have a discussion about raising pay—we have plenty of ideas. Let us discuss raising the minimum wage to at least £10 an hour now or reducing the universal credit taper rate so that people keep more of what they earn. To dress up this devastating cut as a choice between supporting jobs and supporting families is an insult to the millions of working people who will see their incomes drop. Hon. Members who support the cut should at least have the decency to stand up and say so rather than hide behind straw men.
I will give my hon. Friend some statistics from my constituency, where 37% of all children—that is 6,802—are living in poverty, a figure that has increased considerably under the Tories. Thousands of them and their families rely on universal credit to put food on their tables. With the latest figures showing inflation rocketing, and that is very much on food, does my hon. Friend agree that adults and children will go hungry if the Government do not do the right thing?
My hon. Friend is absolutely right. However, it is also important to say that there are 1.7 million people this will affect who cannot work, owing to disability, illness or caring responsibilities. I have not heard a single mention of them from the Government, or the offer of any help coming their way to mitigate this cut.
The Government said at the time they increased the universal credit payment that it was to pay for essentials during the pandemic. I take that to be food and fuel. Does the shadow Secretary of State believe that food and fuel prices have fallen since the pandemic, and if not, does that not just do away with the Government’s argument altogether?