Universal Credit and the work allowance has been a topic of much debate in Westminster over the past few days. Universal Credit is a major reform that will transform the welfare state in Britain. At the heart of UC is a belief that work should always pay. Under the new system, benefit will be withdrawn gradually as claimants start work or increase their earnings, meaning their total income always goes up.
I firmly believe that UC is a fair benefit that protects vulnerable claimants. As UC is a simpler, more accurate benefit based on up-to-date information, it will provide people with their full entitlement. This means that 700,000 people will receive on average an extra £285 per month which they have not received under the existing system. Around a million disabled claimants will gain on average £110 a month through UC, because their award is higher through UC than legacy benefits.
While changes have been necessary to reform the system of ‘work allowances' in UC, it is important to see this as part of a wider package of measures which together are designed to move us towards a lower welfare, lower tax, higher wage economy. The introduction of the National Living Wage has delivered a pay rise for millions of low paid workers and people are keeping more of what they earn due to increases in the tax personal allowance. In total earnings for full time workers on the minimum wage will have increased by over £2000 a year since the introduction of the National Living Wage in 2016. The taper is still in place, so people can still earn and claim a benefit, it has not been removed or dropped entirely and continues to be higher that what was previously available under the original Jobseeker’s Allowance.
Rightly for a programme of this scale, the priority continues to be its safe and secure delivery. The controlled expansion of Universal Credit started in April 2013 and I am pleased that significant progress has been made to date. Universal Credit is now available for single claimants in every jobcentre in the country.
Figures have shown that people claiming Universal Credit are 13 per cent more likely to be in work than people claiming Jobseeker's Allowance, earning more money and more willing to take a job. I am glad that 83 per cent of UC claimants are satisfied with the service they receive and I hope this explains why I strongly support this important reform.