Universal Credit: Stephen Crabb argues base rate was 'too low'
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Universal Credit is intended to support those who are out of work or unable to work, but also individuals who are on a low income. With millions impacted by the pandemic, the benefit has served as a vital lifeline during the last 18 months. With this in mind, the Department for Work and Pensions (DWP) made the decision to increase the standard allowance by £20 per week to help struggling families. However, this was only intended to be a temporary measure implemented by the Government. Now, as September draws to a close, many Universal Credit claimants have been told to expect their benefits to be cut as the Government removes the £20 uplift.
However, some have hit back at the idea of the removal of this kind of support, arguing that it could plunge people into further financial issues at a time of already existing hardship.
Today, the matter was debated in the House of Commons, with a number of MPs weighing in on the issue. One Tory MP appeared to break ranks with the Government’s view to make his opinions known.
Stephen Crabb, the Conservative MP for Preseli Pembrokeshire, said: “My views on this have not really changed since the last time we debated this, and on that occasion I voted against the Government for the first time ever, because I felt so strongly about the course of action we were intending to carry out and the impact that would have on workers on low incomes and their families.
“The truth about the pandemic, Madame Deputy Speaker is that it hasn’t been a time of increased hardship for everyone. For the lucky few it has been a gold rush, for others it has been a period of reduced household expenditure and increased savings. There are many who have become richer during the course of the pandemic.
“Those aren’t the people we are talking about this afternoon. Those we are talking about, many carried on working all the way through the pandemic. They didn’t enjoy furlough or some of the comforts of working from home.
“Typically we are talking about those in supermarkets, those working in cleaning jobs, in the care sector. The modern Conservative Party absolutely should be standing on the side of people like that. Those who choose to go out to work to improve their circumstances.”
Mr Crabb explained that he was surprised by the Government’s initial decision to increase Universal Credit by a value of £20 per week. However, he said he was “delighted” when this took place.
But for the Preseli Pembrokeshire MP, it was not clear why this specific figure was chosen. Indeed, he went on to express his belief that he did not think the Government was sure about why that particular number was selected either.
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He added: “Unless, it was a recognition that the standard allowance in March 2020 was too low to provide anything like a decent, respectable level of income replacement as an out of work benefit.
“It is this question of adequacy that I think we will come back to time and time again in the remainder of this Parliament.
“I came to the view a while ago that the level of Universal Credit in March 2020 was too low. One of the key reasons why it was too low was because decisions I was part of in 2015 to begin freezing that benefit and seeing the value of it, eroded at the time.
“At the time, I used some of the exact same arguments used at the dispatch box. We assumed we were in a time of low employment, we assumed there would be a virtuous cycle of employment. We assumed people would be a living demonstration that work is the best route out of poverty.
“But that didn’t happen. Instead, we saw an increase in in-work poverty. And that fact should be profoundly troubling for those of us on this side, who really do believe work is the best route out of poverty.”
Mr Crabb added that he was fearful his Government would create the “same cycle” of “assumptions” he argued had been made in the past when it comes to Universal Credit.
He cited in-work poverty increases as a “direct result” of the Government taking action to freeze the main rate of working age benefits for families on low incomes.
Mr Crabb continued: “Anybody who thinks we have generous benefits in this country, I’m afraid is wrong. Either looking at it internationally or looking at it historically, in no way can you describe UK benefits as generous. We don’t have them.
“I do worry that there is this view that if you could only just make welfare that little bit tougher, that more uncomfortable for families who are on it, that you will get better engagement with the labour market, you’ll see more people going out to work.
“But the evidence does not point to that either, Madame Deputy Speaker, the evidence shows that if you are a family living in destitution, living with anxiety directly as a result of your financial circumstances, you are less well able to engage with the labour market and increase your earnings and hours.
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“Even though I know the views of Number 10 and the Treasury are very clear and locked down on this, this will not be the end of the matter this afternoon.
“We are going to keep coming back to talk about this issue for the remainder of this Parliament.”
Will Quince, Parliamentary Under Secretary of State at the DWP, said in his closing statement: “There is no question the last 18 months have brought unprecedented challenges. But this Government has provided an unprecedented response and delivered support to families right across the country in response to this crisis.
“We’ve heard how £20 uplift has made a difference to households facing economic shock and financial disruption as a result of the pandemic. And we’ve heard calls for the uplift to be made permanent, and extended to those on legacy benefits.
“But I have to remind the House that the Chancellor has always been clear that the Universal Credit temporary uplift was a pandemic response, and he ensured the support was in place well beyond the end of restrictions and the reopening of our economy.
“There is not one member of this House that wants to see any of our constituents in poverty. We must work together to tackle the root causes and drivers of poverty. Universal Credit is a safety net, but it is not designed to trap people on welfare. Fundamentally, we recognise that work is the best route to prosperity. It is therefore right the Government now shift its focus to supporting people back into work and to progress in work. We have a comprehensive Plan for Jobs to help us achieve this.
“A time limited measure for a specific purpose being removed is not a cut, and to describe it as such as disingenuous.”
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