Ipswich MP: Why I accept decision not to make £20 benefit uplift permanent

Over the past couple of weeks, we’ve had some in Westminster and I suspect we will have a few more during the course of this parliament.

You can’t spend more than £400billion over the space of approximately 20 months, as this government has done, and then expect to not have to make difficult decisions when it comes to tax and spend.

Anyone who pretends that the kind of government borrowing and spending we’ve seen during the pandemic can just go on and on is living in cloud cuckoo land.

Last week, the government introduced a new health and social care levy to raise £36bn over the next three years.

This will help to tackle the daunting NHS waiting list, reform social care and introduce a new £86,000 cap on social care costs.

This week, there was an opposition day motion about whether to make the temporary £20 uplift in Universal Credit permanent.

It is currently the government position that the temporary £20 uplift in Universal Credit, intended for the duration of the pandemic, will not be made permanent.

The government has also made the decision to end the furlough scheme.

It was absolutely right that this hugely expensive scheme was designed and implemented by the chancellor to save millions of jobs during the pandemic.

But it was always going to have to come to an end at some point. Clearly, when it did, there was always going to be a degree of disruption. Some people were always going to miss out.

It’s right that the government, through the Kickstart scheme and other employment and skills initiatives, is doing what it can support those who end up out of work as a consequence of the pandemic.

As we look return to normal and restore sanity to our public finances, it’s inevitable that many of the schemes that were designed to be temporary are ended.

However, I appreciate that for many constituents this will bring challenges.

I am well aware of how many of my constituents are in receipt of Universal Credit and have benefitted from the temporary £20 uplift that was introduced at the start of the pandemic by the government.

The uplift was introduced to support those dependent on Universal Credit during the worst of the pandemic.

Earlier this year, there was a debate about whether or not the £20 uplift should have been extended beyond March 2021.

At the time, I and a number of colleagues made the case that it should, as we were still very much in the midst of the pandemic and living with all the associated restrictions. I was pleased that the government took the decision to extend it.

In early August, the debate surrounding Universal Credit returned.

Despite the fact that at that time all restrictions had been removed, I was sympathetic to the argument made by many that many of those in receipt of Universal Credit had got used to the extra £20 and withdrawing it at this time would make things more difficult for them.

It is for this reason that I wrote to the chancellor over the summer requesting that he consider and look into the possibility of making the temporary Universal Credit uplift permanent.

I did this whilst all the time knowing the scale of the public spending commitments currently being placed on the chancellor and the fact that ultimately it is his responsibility to look at all these demands in the round and make sure that our public finances are on as sure a foot as possible as we exit the pandemic.

Even after spending £400bn as a consequence of pandemic, there continues to be unprecedented pulls on the public purse.

Our NHS has never been under greater strain, more needs to be spent on education to young people’s services to ensure catch up, we need more mental health funding and it’s likely we will need even further support for businesses. The list goes on.

At the same time, our ability to fund these demands through increased borrowing is extremely limited and I really don’t think many of my constituents want to see a return to austerity and cuts to vital services.

Therefore, after much consideration, I have accepted the government’s argument that it doesn’t feel able at this time to make the £20 Universal Credit uplift permanent at a cost of £6.5bn.

It is important, however, that it explores other ways of supporting the most vulnerable in society and those on the lowest incomes.

A key focus needs to be on the economic recovery from Covid-19 and supporting businesses to bring about more and better paid jobs.

It’s been pleasing to see over the past month or so the number of vacancies that have been coming about locally. This has exceeded many people’s expectations.

Of course, the Labour Party think that we can simply ignore the fact that we’ve spent £400bn as a country over the past 20 months and we can avoid any difficult decisions.

They voted against the cut to international aid that saved the government £4bn and they also voted for making the Universal Credit increase permanent that would have cost a further £6.5bn. Where would they find this £10bn from?

They voted against the government’s plan to raise £36bn over the next three years through the health and social care levy to urgently tackle NHS waiting lists and reform social care - but with no plan at all about how they would actually fund this urgent work.

We also can’t forget that if Labour had their way, we would still be in a lockdown of some form or another - so the capacity of business to rebound over the past few months would have been more limited.

It’s not enough for them to vaguely talk about capital gains taxes and wealth taxes. We have no idea about how this would work in practice and how much money it could even bring into the Exchequer.

There isn’t a spending commitment that the Labour Party are ever prepared to say no to and there is a total vacuum where there should be a plan for how they would raise all the funds in question.

The reality is that would rely almost exclusively on further extensive borrowing at a time when national debt is already at record levels.