HM Opposition debate on cuts to Universal Credit Work Allowance

On Wednesday 6 January 2016 HM Opposition Labour Party called an opposition day debate on Universal Credit Work Allowances. The debate was moved by the Shadow Secretary of State for Work and Pensions, Owen Smith. The Parliamentary Under-Secretary of State for Work and Pensions, Mr Shailesh Vara, responded on behalf of the Government.

Under Universal Credit, families are allowed to earn a certain amount each month before their maximum award begins to be reduced; these amounts are known as the Universal Credit Work allowances. The summer Budget 2015 announced cuts to universal credit work allowances for most claimants which is due to come into effect in April 2016.

Some examples of the changes are: For a single mother with one or more children, the work allowance will be halved from April of this year from £8,808 to £4,764, a reduction of £4,044. In cash terms, that working mother will lose £2,628 next year. That is the nature of the loss to a single mother. For a joint couple living and working together, one or both with limited capacity to work as they are disabled, their budget —the work allowance—will be cut from £7,700 to £4,700, a loss of £3,000 in their income. A single individual in receipt of UC will lose everything—a £1,332 reduction; a net loss to their income of £865.

The full text of the motion was that “this House calls on the Government to reverse its decision to cut the universal credit work allowance, which is due to come into effect in April 2016”. I voted in favour of the motion, however the vote was: the Ayes:273 and Noes: 308. And so the motion was defeated.