Alok Sharma is Minister of State for Employment and MP for Reading West.
Conservatives can be proud of the remarkable employment success our policies have helped to deliver across the UK. Unemployment is at a 43-year record low. Employment is at a near record high. 3.3 million more people are in work since 2010, and youth unemployment is nearly halved. That’s on average a thousand jobs created every day, with 75 per cent of these being full-time and permanent, and around 70 per cent in higher skilled occupations which attract higher wages.
So not the flood of zero hours contracts some on the left would have us believe. In fact, fewer than three per cent of all jobs currently are on zero-hour contracts. And for those who question the veracity of the employment figures, it is worth pointing out these are issued by the independent Office of National Statistics, not by the Government.
Contrast our record with Labour’s: every time Labour has left office in the post-war period, unemployment has been higher than when they entered.
Reforming welfare is critical to continuing our jobs revolution, and Universal Credit is central to that. Consider first the legacy benefits system Universal Credit is replacing.
It is a complex mix of six benefits, for which people have to interact with up to three different organisations: HMRC, local authorities and DWP. If that isn’t difficult enough, the legacy system punishes working extra hours through tax credit cliff-edges at 16, 24 and 30 hours – meaning that, in some cases, people face losing benefits entirely if they work above a certain amount, effectively removing the incentive to take on more work.
So under the legacy benefit system, the State effectively stands in the way of people taking on extra hours. It confuses people as to what they can claim – meaning that £2.4 billon goes unclaimed by 700,000 of those who need it most. Ultimately, the legacy benefits system lets people down and holds them back. It needed to be radically reformed.
Universal Credit is designed to help those who can work into work, and protect vulnerable claimants that can’t. It is a simpler benefits system that ensures work pays by consistently removing 63p of benefits for every extra £1 people earn – removing cliff-edge disincentives to work. It is responsive to changes in earnings, taking away the threat of huge tax credit overpayment bills at the end of the year.
And Universal Credit is working: 86 per cent of people on Universal Credit are actively looking to increase their hours, compared to just 35 per cent of people on JSA. When it is fully rolled out, we expect Universal Credit will boost employment by 200,000, result in people working an additional 113 million hours a year and generate £8 billion in economic benefits each year.
I was delighted to hear Theresa May cite examples of people who have benefitted from getting onto Universal Credit at last week’s PMQs. These are similar to the personal stories I hear when I visit Jobcentres, and I know Ministerial colleagues do too.
And I also hear from job centre staff across the country, many of whom have worked with us for many years, that for the first time in their careers with DWP they are doing precisely what they came into our job centre network to do: advise and help people move into work and into better paid work. Rather than having to explain a hugely frustrating and complicated legacy benefit system.
We are constantly improving the Universal Credit system to make it more efficient for those using it. Claimant satisfaction levels on Universal Credit are similar to those on legacy benefits, and I am determined to continue to drive up our performance so everyone who has an interaction with Universal Credit has a positive experience.
That is why those in Labour peddling the idea that we should halt Universal Credit are so wrong. They play politics with those who need support. Earlier this year we implemented an extra £1.5 billion of support for those on Universal Credit, Labour cynically voted against this extra funding. Labour would deny support to the very people they claim to speak for.
By the end of this year, we will have rolled out Universal Credit across the country for all new benefit claimants and existing claimants with a change in their circumstances. In 2019, we start our ‘managed migration’ phase of Universal Credit, in which those who are currently on legacy benefits are switched to Universal Credit without having any change in circumstances. This phase will take several years and extend into 2023.
Before we start any volume managed migration of claimants we will ensure a full testing of the process. And working with key stakeholders, we will ensure there is support and safeguards in place for vulnerable claimants to make their migration journey a smooth one.
And when we switch claimants, we will protect them. £2.6 billion of transitional protection will ensure that the incomes of those switched do not decrease at the point of moving. We will also ensure that the 500,000 people claiming Severe Disability Payment will not lose that income.
This protection is part of the Universal Credit regulations that I will be bringing forward in Parliament in the autumn. They are crucial for supporting the most vulnerable and unlocking the path for those who can work to get on – helping people into work, helping people progress through work and helping people reach their potential.