It's time to recognise the dynamic effects of Universal Credit in Britain's "job miracle"
By Saskia Greenhalgh
In an article for the Sunday Times last weekend, Shadow Business Secretary, Angela Eagle responded to proposals from the Labour Leadership to restrict the ability of large companies to pay out dividends as “flawed and unworkable”.
Instead of chiding our biggest employers, the Labour Party should embrace the Universal Credit revolution that is helping more people take on more work.
This week has seen a flurry of reports into Universal Credit with the Institute for Fiscal Studies praising the ability of Universal Credit to “help strengthen the incentive to find work”.
Before Christmas the Government produced a landmark piece of research which deserved to get more attention. Looking at claimants working less than 30 hours a week, the Government found that 86 per cent of those in receipt of Universal Credit were trying to earn more through increasing their hours. Universal Credit is starting to fulfil its promise of a dynamic benefit by removing some of the cliff edges preventing the low paid from earning more through work.
This is good for our largest employers and good for low paid workers. Universal Credit supports people who are more willing to take on extra shifts and be flexible about the hours they work. As the Government report identified, “employers tell us that they are already using the flexibility afforded by Universal Credit to create more jobs and increase the hours offered to employees”.
If the Labour Party wants to support the low paid they should embrace the Universal Credit reforms and challenge our largest employers to utilise the flexibility offered by it.
Helping Universal Credit claimants in work and on low pay to take on more hours and develop new skills is the surest answer to low pay Britain; not new legislation to restrict the ability of our largest companies to create new jobs.