Universal Credit Taper Rate

7. What assessment he has made of the potential merits of reducing the universal credit taper rate on the levels of people’s incomes.

11. What assessment he has made of the potential merits of reducing the universal credit taper rate on the levels of people’s incomes.

We reduced the earnings taper to 55% last December and we increased the work allowance by £500 a year. As a consequence, 1.7 million households will benefit from these measures, which mean that they keep, on average, around an extra £1,000 a year. That encourages in-work progression as claimants are clearly better off in work.

The claimant rate in Rugby is just 2.8%, and I hear regularly from employers about the workforce challenges that they face. The low rate in Rugby has arisen in part because of the cut to the taper rate that the Minister referred to, which was extremely welcome to working people on universal credit. Will he set out what further steps his Department can take to encourage claimants—those who can—to increase their income by taking on more and better-paid work?

My hon. Friend will be aware that Rugby jobcentre is doing a fantastic job locally; I look forward to visiting in 2023. Since April 2022, we have been rolling out the new in-work progression offer, which will support approximately 2.1 million working universal credit claimants to progress into higher-paid work. They will also be supported by progression champions, of whom we have 37 across the country, including in Mercia.

Universal credit was always intended to ensure that work pays. Reducing the taper rate is a critical part of that, but does my hon. Friend agree that it is not the only critical element? To keep unemployment as low as it is today or lower, things like increasing access to work coaches are equally important.

A huge amount is being done to increase the time that individual claimants spend with work coaches. More intensive support is being provided. The additional earnings threshold, which my hon. Friend will be fully aware of, is also being rolled out across the country to ensure that we see claimants in better-paid jobs on a longer-term basis.