Alex Burghart is MP for Brentwood and Ongar.
Work is very close to the heart of the Conservative vision – a steady, strong economy that generates the jobs families need to support themselves, to enjoy life and set the positive example their children need. As I saw when I ran the policy unit at the Centre for Social Justice, when families and communities lack work, so much else in their lives can start to fall apart, and the social and financial cost becomes enormous.
One of our greatest achievements in government has been the nurturing of an economy capable of delivering a ‘jobs miracle’ – the envy of many other developed economies – which is continuing to break records. On Wednesday we saw another set of figures showing that employment was at its highest since the mid-seventies.
But this extraordinary good news story also relies on another part of the system: welfare. As we discovered in the Labour years, done wrong, the benefits system can act as a poverty trap, discouraging people from entering work. If you are offered a job and your benefits are withdrawn too quickly, then the value of entering work is destroyed – you might find you are only a few pence an hour better off in work than you are out of it. In particular, the system makes it very difficult for people to work more than 16 hours without be penalised.
These are the problems that Universal Credit (UC) – the Government’s flagship welfare policy – sets out to solve. A highly complex reform which is seeing the benefits system be simplified so that huge numbers of different payments are being rationalised into a single one, UC is transforming back-to-work support. It makes sure that your benefits are only slowly withdrawn as your pay increases: this means that its always profitable to work more, to take more hours. Now 86 per cent of people on UC are actively looking to increase their hours, compared to just 38 per cent under the old system.
Part of UC’s philosophy is that benefits should mirror the world of work. In Iain Duncan Smith’s inimitable phrase: if you are out of work, you are in work to find work. This mentality has driven a new modus operandi in which people are asked to form agreements with their work coaches, who are employed to help people overcome their barriers to employment. Gone are the days of people signing on and being forgotten. The system sets expectations and helps people to fulfil them. I’ve spoken to UC work coaches brimming with enthusiasm for this new way of working, which is helping them to help people as never before.
There are, however, some parts of the system that need fine-tuning, and it’s reassuring to hear that the Government is considering them. In imitating work, UC pays people on a monthly basis – just as people in work are. This helps recipients to practice budgeting before they enter employment. However, first payments are currently taking five to six weeks to land in claimants’ accounts, with some reports of people waiting much longer. This can cause hardship – so it’s important that the Government does even more to publicise the fact that people can apply for an advance on their benefits with a repayment period of six months. There’s been good movement in this direction, recently with 47 per cent of people taking early payments up from 33 per cent, but there’s clearly further to go.
Whilst there have been a few growing pains, UC is, crucially, helping more people into work. Those claiming it spend 50 per cent more time looking for work than those on the old Job Seekers Allowance, and they are four per cent more likely to be in work after six months. Once fully rolled out, UC is expected to boost employment by around 250,000 and to generate £7 billion in economic savings. It is Conservative welfare reform that is helping people to break out of the benefits trap and build a system on unemployment benefits squarely focused on getting people back into work where they will can become increasingly self-reliant and need progressively less help from the state. This is the practical, functional, durable social reform which only Conservative values can deliver.