Universal Credit Roll-out
(7 years, 1 month ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
18:59 - The House having divided: - Ayes: 299 / Noes: 0 - Question accordingly agreed to.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I beg to move,
That this House calls on the Government to pause the roll-out of Universal Credit full service.
I am delighted that we have secured this vital debate on universal credit, given the concerns across the country and among Members on both sides of the House. I am aware that some 90 people have put in to speak, so I will take only a few interventions from both sides of the House. I will try to get through my key points as quickly as I can.
Our motion calls on the Government to pause the roll-out of universal credit while the issues associated with this key social security programme are fixed. I genuinely offer to work with the Secretary of State for Work and Pensions to fix the many and varied issues associated with universal credit. To understand what needs fixing, we need to understand how we got here. When universal credit was first introduced in 2012, it had the underpinning principles that it would simplify the social security system, bringing together six payments for working-age people in and out of work, and that it would make work pay.
Nick Thomas-Symonds (Torfaen) (Lab)
My hon. Friend talks about the underpinning principles. Surely, one of those should be that our social security system should not drive people into debt, yet that is precisely what is happening to my constituents who are waiting months for payments.
Debbie Abrahams
Absolutely, and I will go on to make those points in a moment.
Getting back to the principles, we supported those then and we support them now. The Government wanted to pilot the implementation of UC, so they introduced a number of pathfinder areas, including my Oldham constituency, and planned a phased roll-out between 2013 and 2017.
Mark Pawsey (Rugby) (Con)
My constituency was also a pathfinder, and since the introduction of UC in 2012, the claimant count in my constituency has halved. Does the hon. Lady think the two issues are connected?
Debbie Abrahams
There may be many and varied reasons why the claimant count is down, not least the system of punitive sanctions the Government also introduced in 2012.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Newcastle was also a pathfinder constituency. As the local MP, I have seen at first hand the absolute misery and destitution that this system has forced many of my constituents into. Our Newcastle food bank was already the largest in the country, and now it regularly runs out of food as a direct consequence of this system. Does my hon. Friend agree that the Prime Minister’s attitude at questions earlier today showed a total lack of understanding of the impact and of the destitution and suffering of so many of her citizens?
Debbie Abrahams
This is a real test for the Government; if there is a genuine desire to make life better for everybody across the country, UC is a key way in which we can respond. I am so sorry to hear about the issues in Newcastle as a consequence of the introduction of UC.
Ms Angela Eagle (Wallasey) (Lab)
I can report to my hon. Friend that I have had exactly the same experience in my constituency, where people are being driven into destitution by the waits for UC. The local food bank, alongside the citizens advice bureau, has estimated that if this full roll-out goes ahead just six weeks before Christmas, leaving everybody destitute for Christmas day, it will have to collect 15 tonnes of extra food to deal with the demand that will be generated by these changes.
Debbie Abrahams
This is the reality that people are facing; this is happening in the areas my colleagues have mentioned, and our concern is that, as this is rolled out to 55 areas this month, the situation will get even worse.
Simon Hoare
I am most grateful to the hon. Lady, who is being enormously kind with her time. The motion calls for a pause in the roll-out. Is she going to tell us what the Labour party would do during that pause period?
Debbie Abrahams
The hon. Gentleman is pre-empting my speech, but I will happily propose exactly what we would like to do in conjunction with the current Government, whose programme this is.
From the start, there were a number of serious design flaws, which the Work and Pensions Committee, of which I was a member, raised in 2012. They included, first, the fact that UC applications would be “digital by default”; in other words, applications could only be made online. There are still several issues with that, not least the assumption that everyone is computer-literate or has ready access to getting online. We all remember the scene in “I, Daniel Blake” where somebody who had not used a computer before was trying to do so, and we saw the real stress and difficulties he found.
Debbie Abrahams
I am sorry but I am not going to give way again, as I must try to press on.
Secondly, there were concerns that UC payments would be made monthly, in arrears, and paid only to the main earner of each household, so women, as second earners, are automatically discriminated against in this process; it was also quite a radical change, with rental payments going directly to the household and not the landlord. Thirdly, there were considerable doubts about the use of so-called real-time information, which was meant to ensure that information from employers to Her Majesty’s Revenue and Customs would allow the Department for Work and Pensions to calculate quickly what people in low-paid employment would be entitled to from UC. The reliability and validity of this data exchange was another key concern. I believe there is a DWP RTI issues group, so there are clearly still problems. Finally, the Government said that disabled people would not be financially worse off under UC, but because the severe disability premium payment has not been incorporated into UC, it is an effective loss of up to £62.45 a week for a single person—more than £3,200 a year.
All that was in 2012, but a number of other issues emerged in the following couple of years—universal jobmatch, ballooning costs and of course several delays. One of the most worrying issues revealed in the January 2015 UC regulations was that people in low-paid work on UC will now be subject to in-work conditionality. So, for example, someone who is one of 1 million or so people working on a low-paid, zero hours contract, with different hours from one week to the next, will have to demonstrate to their Jobcentre Plus adviser that they are trying to work 35 hours a week and if they fail to do that to that person’s satisfaction, they can and will be sanctioned. For Members who are unfamiliar with this concept, those people will have their social security payments stopped for a minimum of a month.
Fast forwarding to the 2015 summer Budget, the then Chancellor announced that cuts would be made to the so-called universal credit work allowances, which are how much someone can earn before UC support starts to be reduced. For example, a couple with two children claiming housing costs had their work allowances cut from £222 a month to £192 a month. In addition, approximately 900,000 families with more than two children could not receive support for third or subsequent children.
Debbie Abrahams
I am not going to give way again, as 90 people have put in to speak.
The UC equivalent of the family element in tax credits was also abolished. The Government’s equality analysis showed that women and people from black, Asian and minority ethnic communities will be most adversely affected by these work allowances cuts. Let us recall what the principles of UC were and then consider that the Institute for Fiscal Studies stated at the time that the cuts to work allowances meant the principle of making sure work always pays was lost. The Government’s claim that UC is leading to more people getting into work is misleading, as it is based on 2015 data, before the work allowance cuts came into effect.
The current Chancellor’s attempt to redress some of the damage of these cuts by reducing the UC taper rate in last year’s autumn statement has had a marginal effect. Members may recall that he reduced the rate from 65% to 63%, so that for every £1 earned over the work allowance, 63p of UC support is withdrawn. That is a far cry from the 55p rate envisaged when UC was first being developed. On that basis, the Resolution Foundation estimated that some families will lose £2,600 a year because of these cuts.
Debbie Abrahams
I am sorry but I am not going to give way again, as I need to make progress, with 90 people having put in to speak.
This summer, the Library analysis that I commissioned showed the real-terms impacts on different family structures and for different income groups. It found that a single parent with two children working as a full-time teacher will be about £3,700 a year worse off in 2018-19 compared with 2011-12.
So where are we are up to now? The most recent statistics show that there are currently about 600,000 people claiming UC, over a third of whom are receiving support via the full service. The roll-out of UC over the next six months will see the overall case load rise to just under 1 million, which is a 63% increase. On average, 63,000 people a month may start a new UC claim before January 2018, and by 2022 we expect about 7 million people to be seeking support from the programme. We are at a turning point in the Government’s flagship programme, the roll-out of which is currently being ramped up dramatically.
On top of the design flaws and cuts that I have just mentioned, several other issues have emerged. Perhaps the most pressing is the Government’s decision to make new claimants wait six weeks before they receive any support. Four weeks of that is to allow universal credit to be backdated, plus there is an additional week, as policy, and then a further week waiting for payment to arrive. This “long hello”, as some have called it, is believed to be one of the primary drivers of the rising debt and arrears we are now seeing. Citizens Advice reports that 79% of indebted claimants
“have priority debts such a rent or council tax, putting them at greater risk of eviction, visits from bailiffs, being cut off from energy supplies and even prison”.
Debbie Abrahams
I am sorry, but I will not.
Half those in rent arrears under universal credit report that they entered into arrears after they made their claim. What is worse is that many claimants do not even receive support within the Government’s lengthy six-week deadline: one in four are waiting for longer than six weeks and one in 10 are waiting for more than 10 weeks. The Government’s so-called advance payment, which is meant to be available to those in need, is in fact a loan that has to be paid back within six months out of future social security payments. I recognise and welcome the Secretary of State’s announcement about speeding that up, but I will explain later in my speech exactly what we might need to tweak.
As we have heard, the measures I have outlined are pushing people into debt, rent arrears and even homelessness. Last year, the National Housing Federation warned that approximately 80% of tenants on universal credit were in rent arrears, with the six-week delay being attributed as the key cause. A few weeks ago, a nurse came into my surgery. She was a single mum who had transferred from tax credits to universal credit. She had the six-week wait, and as a result the arrears racked up. When she came to see me, she had just been served an eviction notice. As universal credit is rolled out, such stories will become more and more common.
The Mayor of Greater Manchester has warned that rough sleeping will double over the winter if the universal credit roll-out continues without its fundamental flaws being addressed. This is not scaremongering; it is based on estimates by local authorities in which universal credit has already been rolled out. Throughout Greater Manchester, the average arrears for people on UC in social housing is £824, compared with £451 for non-UC tenants. It is already having an impact on rising evictions and homelessness—and that is without even going into what is happening in the private rented sector. In addition, the increase in rent arrears for social housing landlords means that less money is available for investment in housing-stock maintenance or the building of new social housing, thereby adding to the existing housing crisis.
The increase in food bank use is another consequence of universal credit delays. Earlier this year, the Trussell Trust reported that referrals for emergency food parcels were significantly higher in a UC area, at nearly 17%, compared with the national average of just under 7%. The trust’s report also highlighted the impacts on the mental health of people on UC, who were described as stressed, anxious or depressed, as they worried about being unable to pay bills and falling into debt.
Who is most likely to be affected and why? Single parents are particularly vulnerable under universal credit. There are now 65,000 single parents on UC. Gingerbread has described how, through
“error in administration and the structure of the system itself, single parents have been threatened with eviction and jobs have been put at risk”.
Gingerbread told me about Laura, who lives with her two sons, one of whom is severely disabled. Laura had to apply for universal credit when her temporary contract at work ended. She had to wait eight weeks for support, and visited a food bank to feed her children. She was not told about advance payments and was struggling with rent arrears. Reflecting on her experience, Laura said:
“it’s very stressful, single parents quite often have enough stress and worry about money; and other things, bringing up your children to start with and it’s exacerbated by this very unfair, very unjust system”.
With child poverty among single parents forecast to increase sharply to 63% by the end of the Parliament, it is vital that we fix the social security system to ensure that it is working. In a forthcoming Child Poverty Action Group report analysing the cumulative effects of social security changes on child poverty since 2010, the section on universal credit highlights its design issues and, in particular, the detrimental impact on single parents. It states:
“Universal credit was designed to be more generous to couples than single people, with lone parents in particular expected to lose out compared with tax credits. This was a deliberate reaction to the decision, within tax credits, to boost support for lone parents in comparison with couples because of their higher risk of poverty and the greater difficulty of increasing earnings from work if you are a lone parent.”
The report goes on to say:
“Since its initial design, universal credit has been subject to a succession of changes and cuts which have substantially reduced its adequacy overall… As a result, it is now less generous than the system it is replacing, and no longer offers the promise of reducing poverty.”
Universal credit is not just affecting single parents; young families and families with more than two children will also fare much worse under UC. Young families going on to universal credit will be affected by the decision to introduce a lower under-25 rate of the standard allowance in universal credit, even for parents with children. As a result, young families will be at increasing risk of poverty, especially if they have a single earner or a second earner working part time. Of course, among other cuts, limiting the child element of support to only two children leaves families with more than three children worse off as well. The report reiterates that as well as being less generous and actually cutting family income, UC fails to incentivise people into work or to progress in work, which are fundamental principles of UC. Shockingly, it has been calculated that, because of the cuts, universal credit will push a million more children into poverty by 2020, with 300,000 of them under five.
Mr Bob Seely (Isle of Wight) (Con)
On a point of order, Mr Speaker. The last time that the Leader of the Opposition spoke on this issue, he made a series of entirely unsubstantiated factual claims about housing in Gloucester. Are these further unsubstantiated claims?
Mr Speaker
Order. That is not a point of order and it is an abuse of our proceedings. I strongly counsel the hon. Gentleman not to make the same foolish mistake again.
Debbie Abrahams
I wonder how that intervention will be seen by those people affected by these issues. Some 900,000 working-age adults will be pushed into poverty, while 900,000 children and 800,000 adults will be living in severe poverty.
Earlier, I mentioned the design issues that are affecting disabled people. This week, I heard from someone who has lost nearly £80 a week—a week—because of their transfer to universal credit after they moved house, ending their ESA claim. When UC was first launched, the Government said they wanted to
“simplify the current complex rules which have been prone to error and complex and confusing for disabled people”
and to replace
“seven different premiums with a simpler, two-tier system that focuses support on the most severely disabled people who are least able to work”.
However, subsequent social security changes, particularly the abolition of the UC limited-capability-for-work element from April 2017, have meant that, instead of a net gain, it is likely that there will be a net reduction of support for people with health conditions and disabilities.
Under this Government, we are seeing unprecedented cuts in support to disabled people, with the consequence that more and more disabled people are living in poverty. The number currently stands at more than 4.2 million; this cannot go on. This is exactly what the UN Committee on the Rights of Persons with Disabilities said is causing a “human catastrophe”.
Debbie Abrahams
I am sorry, but I will not. As I have said, I am conscious that 90 people wish to speak.
The self-employed are another group who are adversely affected by the Government’s changes to universal credit. We have seen a dramatic increase in self-employed people in recent years: they now make up 15% of the workforce—5 million in total—and account for 80% of the increase in employment since 2008. But 45% of them pay themselves less than the living wage.
As I have said many times, it is absolutely right that we try to design a social security system that can properly support self-employed people and that recognises the fluctuating nature of the labour market for those workers. Sadly, universal credit no longer does so, after the introduction of the minimum income floor, which is an assumed income for self-employed people, found by multiplying the minimum wage on the assumption that self-employed people are working 35 hours a week. One self-employed recipient who contacted me said:
“This system does not allow for the fluctuations in income that are experienced by the self-employed. Surely an assessment made on a year’s profits would be much fairer.”
They went on to say that universal credit will close down enterprise as a route to employment.
Importantly, the Department for Work and Pensions does not average incomes over a year, which leads to issues around holidays, such as Christmas, when the self-employed may take time off. They will be punished for doing so under the Government’s universal credit system. The Federation of Small Businesses has also expressed concerns, saying that it expects major problems for low-income self-employed people to set in at Christmas.
We need to build a social security system fit for the 21st century and to make sure that all workers, employed or self-employed, are afforded dignity and security as work demands fluctuate. We cannot allow the devastating impacts of universal credit roll-out to happen. I reiterate my genuine offer to work with the Government to address the very real concerns about universal credit, particularly its design flaws, the administrative issues and the cuts.
I welcome the Government’s announcement this morning that the so-called helpline will now be a Freephone line. Given Serco’s appalling performance over the past few years and the profit that it has made from the Government contract, it should be paying for the Freephone lines. It is unacceptable that people on the lowest incomes have been paying money that they do not have on phone calls to find out about their claims.
Action must be taken to improve call handler capacity and competence, so that people making inquiries on their claim are not kept on hold or passed from pillar to post. Another key ask is for alternative payment arrangements to be offered to all claimants at the time of their claims. That includes ending the one-week wait and enabling people to have fortnightly, instead of monthly, payments where appropriate with the option of the housing element to go directly to the landlord. Alternative arrangements have already been made available in Northern Ireland and will be introduced in Scotland, so there is no reason why they also should not be available to people in England and Wales.
We need to look at the advanced payments and make them more manageable. A repayment over six months is still creating huge issues for people on the lowest income.
Debbie Abrahams
I am sorry, but I will not give way.
These are relatively straightforward suggestions. I recognise that reinstating the original level of work allowances and reducing taper rates are less so, but if the Government and the Prime Minister are sincere about tackling injustice in this country and making sure that work pays, they must act. Once again, I commit to working with them on this. We must address the poverty and discrimination that universal credit is causing women, children, disabled people and black, Asian and minority ethnic communities now. This will only get worse as universal credit is rolled out.
This country is at a crossroads. Brexit must not blind this Government to other obligations to their citizens. We must all work together in the national interest to avert the disaster that is about to unfold if universal credit is rolled out without fixings its failings. I urge all MPs to vote with their conscience, stand with us and their constituents and pause and fix universal credit.
The Secretary of State for Work and Pensions (Mr David Gauke)
Today we have seen yet another excellent set of labour market statistics: unemployment is 1 million lower than in 2010 and youth unemployment has gone down by 415,000 over the same period. Underneath those raw statistics lie the work and effort of millions of families across the country who are keen to get on and make the best of their lives: people who are in work but want to earn more, people who are out of work but really want to get a job. Young and old all deserve the opportunity to maximise their potential. That is what universal credit is all about.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Will the Secretary of State give way?
Mr Gauke
Let me make a little progress.
When it comes to universal credit, there is much talk about supporting the principles behind the reform, and I welcome that. Before turning to the issues raised by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams)—and I will be taking plenty of interventions—I think it would be helpful to the House to articulate what those principles are.
The fundamental purpose of universal credit is to assist people into work. It is through work that people can support themselves, obtain greater economic security and progress in life. Universal credit does that by making work pay.
Several hon. Members rose—
Mr Gauke
Let me finish on the principles, and then I will take plenty of interventions.
We inherited a welfare system that puts in place barriers to people fulfilling their potential. If those on jobseeker’s allowance do more than 16 hours of work, they must go through the disruption of stopping their benefit claim only to start another. Many on employment and support allowance can be faced with a choice between financial support or work while we know that many thousands would like, and would benefit from, both. Once a person is in work, they are all too often caught by the hours rules in tax credits. Universal credit cuts through that by taking six different benefits and replacing them with a single system: a system where claimants receive tailored support to get them into work; a system where claimants have to deal with only one organisation, not three; and a system that ensures it always pays to work and always pays to progress.
Clive Efford (Eltham) (Lab)
It is not the principle, but the practicality that is at issue. [Hon. Members: “Ah!”] The principle of getting people back into work is something that we on the Labour Benches accept. The citizens advice bureau, the Trussell Trust and even John Major are saying that universal credit should be delayed, because it is increasing poverty and leading to debt and rent arrears. Are they wrong?
Mr Gauke
My argument is that we should not be pausing this. May I just say that I welcome the clear expression of support for the principle of universal credit? That is helpful. The case I will make today is that the principles lead us to a design that is focused on making work pay. It is diminishing the differences between being out of work and being in work, and can make a significant difference.
Mr Speaker
The hon. Member for St Albans (Mrs Main) has just been promoted. The Secretary of State needs to gesticulate whom he means with greater clarity.
Mrs Main
I thank the Secretary of State for that promotion. I look forward to receiving it in the post.
Is the Secretary of State any more aware than I am of the topic of this debate? Yesterday, the Opposition wanted to fix universal credit. Today, the word “fix” has been dropped. It seems that the Opposition want to pause but not fix. Has he any greater awareness of this matter?
Stephen Timms (East Ham) (Lab)
Has the Secretary of State seen the survey of 105 local councils, which showed that of claimants who claim universal credit, over half of the council tenants are in rent arrears compared with only 10% of those on the old housing benefit? Does that not show that this system needs to be paused and fixed?
Mr Gauke
Part of the issue is that that is not comparing like with like. The right hon. Gentleman will understand that the selection of people who will be on universal credit will be of a different group than the housing benefit population as a whole. [Hon. Members: “Why?”] The reason is that in many cases, going on universal credit involves a change of circumstances, and that change of circumstances may in fact be a reason why people are in arrears. [Interruption.] May I just make this point? I know that the right hon. Gentleman has concerns about how we address the issue of the early period, so I will say a little bit more about it. We are seeing improvements in payment timeliness, and people are getting more support early so the reasons for increased rent arrears will not necessarily apply.
I want to make this point about what universal credit does. The work done within universal credit to give people the support to prepare for work can be too easily missed from debate.
Several hon. Members rose—
Mr Gauke
I will just make a little bit of progress.
Universal credit gives a person a work coach, who provides personalised support, helping them to stay close to the labour market and overcome barriers to work. A universal support package provides people with assistance to build confidence and competence with IT, manage their universal credit account online and access online job search facilities and training. Universal credit makes being out of work more like being in work, because people are paid monthly, as 75% of employees are, and because it is paid directly to tenants instead of to their landlord. It also stays with recipients during the transition from being out of work to being in work.
Lucy Frazer
The Secretary of State makes a really important point about the unemployment figures and the importance of getting people into work. Will he join me in congratulating my constituency, which has one of the lowest levels of unemployment—the sixth lowest—in the country, with only 375 people unemployed or claiming unemployment benefit?
Several hon. Members rose—
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Secretary of State is being very generous with his time. Did not the shadow Secretary of State rather give the game away when she denied any link at all between universal credit and the increase in employment levels? Since 2010, the Labour party has set its face against welfare reform. In 2010, Labour Members ran to the barricades to defend an outdated system that trapped people in poverty and worklessness for years.
Mr Gauke
I am just making a point about the speech we just heard from the shadow Secretary of State, who has set her face against any form of conditionality in the benefits system, as far as I can tell. She fails to appreciate that the best way of helping claimants is to get them into work. That sometimes requires a change of behaviour, and a degree of conditionality within the system is required to ensure that people change their behaviour so they can make progress.
Jack Dromey (Birmingham, Erdington) (Lab)
On this side of the Chamber, we live in the real world of our constituents. People suffering from motor neurone disease came to see us in Westminster yesterday to say that on top of the agony of their disease, they faced the indignity of fighting for their full entitlement under PIP. Today a landlord came to see me in my office, saying that he will never again let to tenants on universal credit, and a single mum told me that she is desperate because, with roll-out just before Christmas, she and thousands of others face a bleak Christmas. Does the Secretary of State begin to understand—
Mr Speaker
Order! I am sorry to have to shout, but the hon. Gentleman, though he speaks with great force and eloquence, took too long. We must have shorter interventions, as it is not fair on others.
Mr Gauke
I will give way, but not for a moment.
Throughout this period, claimants have a flexible, clear and tailored claimant commitment so they fully understand their responsibilities. The commitment supports and encourages them to do everything they can to move into or towards work, or to improve their earnings. The only thing we ask is that claimants meet reasonable and agreed requirements that take into account their individual circumstances and capability, including mental health conditions, disability and caring responsibilities. I hope that this approach to benefit conditionality will have the support of both sides of the House, including the hon. Member for Wallasey (Ms Eagle).
Ms Angela Eagle
The Secretary of State must surely realise that the way in which the system is being administered is leaving people penniless and possibly destitute. He must address that point. The Government are rolling all the six benefits into one; if that is then not available to people for six weeks, there are people who cannot afford to survive in that time. The loans, which have to be paid back, are not an adequate response. Will the Secretary of State admit the human suffering that is happening in all our constituencies and deal with that particular point?
Mr Gauke
Let us be clear: if people need support under this system, they do not have to wait for six weeks. [Hon. Members: “They do!”] They do not have to wait for cash in their pocket from the state because they can get an advance, which is normally paid within three days. If someone literally does not have a penny, they can get that money on the day. There is a responsibility on all of us as constituency MPs, when we meet our constituents who face difficulties of this sort, to inform them of the availability of advances, not to scare them with the belief that they have to wait six weeks when they do not.
Richard Graham (Gloucester) (Con)
The points being made by Opposition Members are disappointing in one particular way. There is a strong responsibility on all of us as Members of Parliament to help our constituents when they get into problems, rather than trying to weaponise them politically. One way this could be done is to encourage our largest housing associations to have an implant inside the Jobcentre Plus so that at the very moment somebody goes on to universal credit, the housing association is there and able to make sure they get the necessary advance so that they can pay their rent. Does the Secretary of State agree?
David Morris
My constituency was a pilot scheme for universal credit, and I regularly meet the jobcentre and the citizens advice bureau. The important point is that there were teething troubles in the early days, but people can now get a loan on the day. The worst wait is seven days, depending on the individual’s circumstances. The problem—if there is a problem that has to be addressed—is how the loan is paid back. The repayment cap is currently at 40% of payments. Would the Secretary of State look into a 10% rate instead, to help the system flourish even further?
Several hon. Members rose—
Mr Gauke
I have given way numerous time already, probably a multiple of the number of times the shadow Secretary of State gave way. I do not want the House to miss this point: universal credit represents a generation-changing culture shift in how welfare is delivered and how people are helped, creating a system that allows people to break free from dependency, take control of their lives and move into work. Our analysis shows that 250,000 more people will be in employment as a result of universal credit when it is fully rolled out. Universal credit is picking up from a deeply flawed system and striving to solve problems that were previously thought unsolvable.
Caroline Lucas (Brighton, Pavilion) (Green)
If the Secretary of State’s intention really is not to cause hardship and distress, why will he not get rid of that automatic six-week wait? Many people still do not know about it. Many do not know to go to their MP to seek solutions. Get rid of it. What he is talking about is a loan, which has to be paid back over six months and which many people are not eligible for. The point is that the way the system is designed is making people fall into hardship, and it is deliberate. It is not an accident. It is absolutely an integral part of the design. Change it.
Mr Gauke
I will come back to the six-week period.
We have to remember that we have inherited an old system, in which complexity and bureaucracy often served to stifle the independence, limit the choices and constrain the outlook of its claimants. The disincentives in the legacy system to work or earn more have been removed, along with the complex hours rules and cliff edges.
Several hon. Members rose—
Mr Gauke
I have to make some progress.
Claimants now no longer need to switch between benefits if they move in and out of work, so they are free to take up short-term and part-time work without worrying about being worse off or their claim ending. It is working: our research shows that compared with people in similar circumstances under the previous system, universal credit claimants spend more time looking for work, apply for more jobs, take up jobs that they would not even have considered previously, and take on more hours or extra jobs. That is not an abstract discussion; this is real people’s lives being improved because of universal credit.
Mims Davies (Eastleigh) (Con)
Eighteen months ago, I visited Radian, a housing association in my constituency. Radian expressed to me and to our hon. Friend the Minister for Employment concerns about the impact of universal credit on tenants. Eighteen months later, those people are in work, paying the rent and working with the housing association. The outcome is positive. Labour Members are simply scaremongering.
Anna Soubry (Broxtowe) (Con)
Thanks to a Conservative Government, we now have almost full employment in this country. For a number of people who claim unemployment benefits, their mental health is a barrier to getting work. What assurances can my right hon. Friend give us that the universal credit system will either help people with low-level mental health conditions to get back into work, or give them the support they need for their future?
Mr Gauke
My right hon. Friend makes a good point. I was about to give an illustration of the way universal credit can work involving a claimant with learning difficulties, who was out of work when he came to the jobcentre. His work coach provided tailored support, building his confidence and capability. That man is now in work. He told us that he is proud of himself for getting into work, and that he did not think it would have been possible without universal credit. He is now looking forward to the future. That personalised support, tailored to individual circumstances, is much more widely available.
Let me give another example. A university graduate had not previously had a job but was desperate to get into work. Her work coach helped to build her skills—interview skills and application writing—and she was soon successful in gaining a 16-hours a week job. When she was offered overtime, the work coach supported the claimant flexibly, rescheduling her Jobcentre Plus appointments so they did not clash with her new hours. The claimant could accept the overtime, confident that she would remain on universal credit and continue to be supported by her work coach.
Those are true testimonies of the powerful potential of the reform to change lives for the better.
Tom Brake (Carshalton and Wallington) (LD)
Does the Secretary of State agree that one of the best ways to help people into work and support them is to deal not only with the six-week wait, but with the fact that—according to Citizens Advice—one in three people now wait longer than six weeks, and one in 10 wait longer than 10 weeks?
Mr Gauke
Let me deal with the points on the waiting period and timeliness. I acknowledge the concern. Returning to the intervention from the hon. Member for Brighton, Pavilion (Caroline Lucas), we have to remember that a waiting period is fundamental to the structure of universal credit, which pays people monthly, mirroring the world of work. Universal credit also automatically adjusts payments to take account of a claimant’s income in a particular month, meaning that a claimant will always be better off in work. To do that, payments necessarily have to be made in arrears.
We know that some people cannot afford to wait six weeks for their first payment, which is why we have advances that provide those in financial need with up to their first universal credit payment. Increasing numbers of people claim that; the numbers from July show that the majority of claimants did so. Claimants who want an advance payment will not have to wait six weeks; as I said, they will receive the advance within five working days, and if someone is in immediate need the advance can be paid on the same day. I recently improved the guidance to DWP staff to ensure that anyone who requires an advance payment will be offered it up front.
Several hon. Members rose—
Mr Gauke
I will make a little more progress before giving way again.
Of course it is important that we get people the right money at the right time. As UC full services roll out, there have been significant improvements in verifying claims and making payments on time. Our latest data show that 80% of new claimants are being paid in full and on time; 90% receive some payment before the end of their first assessment period; and, taking into account advances, 92% of new claimants receive some support within six weeks. More than 1 million claims to UC have been taken. The live service is available in every part of the country and the full service version is already in 135 of our jobcentres for new claims across all claimant types.
Neil Gray (Airdrie and Shotts) (SNP)
The Secretary of State says that advances are typically paid within three days. Of course, an advance in crisis funding is an admission that the system is failing, but aside from that, what evidence does he have for saying that payments are made within three days? The answer to a written question that I received this week shows that the DWP is not collecting those data.
Mr Gauke
For a start, it is not crisis funding; it is an advance giving people flexibility in when they receive their universal credit payments. Our commitment is to deliver within five days, and my understanding is that typically payment is made within three days. We are providing support to people earlier. I acknowledge the concerns. I have seen the hard cases of people who have apparently gone weeks—sometimes months—without support. What we are saying is that they can get an advance quickly, as long as we have verified their identity.
Helen Whately
May I back up my right hon. Friend, drawing on work I have done in my area and on discussions with citizens advice bureaux? When people have needed advance payments, they have received them incredibly quickly, within two or three days, and the jobcentre staff tell me that universal credit is helping them to help people to get into work. Does he share my frustration at hearing so much negativity from Labour Members and never any positives?
Mr Gauke
I certainly do. This is an important matter and strong views are held in all parts of the House, but I urge right hon. and hon. Members to engage with their local jobcentres. When they talk to jobcentre staff, many Members hear what my hon. Friend just described—that the universal credit system is delivering for people, giving them the opportunity to get jobs. That is exactly what we are determined to do.
Universal credit is working and the roll-out will continue—to the planned timetable. We are not going to rush things. It is more important to get this right than to do it quickly. At the moment, of the total number of households that will move on to universal credit, we are currently 8% of the way there. By January, it will be 10%. Across the country, we will continue to improve our welfare system to support further those who aspire to work.
Several hon. Members rose—
Mr Gauke
I have given way numerous times. I am conscious that, as the shadow Secretary of State repeatedly said, 90 speakers want to get into this debate, and I have spoken for nearly half an hour, which is more, I am sure, than the House can endure.
We are under no illusion but that we must continue to work together to resolve issues as they arise and ensure a successful roll-out. I want to improve the system. I want constantly to refine the system. I want to make changes where necessary to test and learn and improve. I am determined to do that. I have made an announcement today along those lines about telephone lines.
Karl Turner (Kingston upon Hull East) (Lab)
We all welcome the Government’s concession on the premium phone line, but I met the CAB on Monday and it tells me that advisers are sometimes waiting up to half an hour to get through. Would the Secretary of State consider an MP-type hotline for advisers from the CAB and other welfare advisers?
Mr Gauke
First, we have never had a premium line; it is the same sort of system that one of the hon. Gentleman’s constituents would find if he called him and booked into a constituency surgery. It has never been a premium line, but we are changing it. On the average waiting times, I think that in September it was five minutes and 40 seconds. As for his particular proposal, let me take that away. Very often the CAB needs to call the local jobcentre rather than the national centre, because if it wants to deal with an individual case, dealing with the jobcentre would be more helpful.
Simon Hoare
I thought that there was a helpline for MPs to deal with all our constituents’ cases—unless it is a courtesy extended only to North Dorset.
Mr Gauke
My hon. Friend is absolutely right, but to be fair to the hon. Member for Kingston upon Hull East (Karl Turner), I think that he wants to extend the helpline that we have or offer a similar service to advisers. As I say, I will look at that, but very often advisers need to contact the local jobcentre.
Several hon. Members rose—
Mr Gauke
I have spoken for a long time and I want to push on.
The approach that we are taking is to test, to learn and to improve, because we are delivering a really important and fundamental change, moving towards a more dynamic system that is already improving lives and has huge potential to do more.
Let me say something about the approach we have heard from Labour Members. We have adopted, I believe, a responsible approach. Of course, there are legitimate questions to ask, and no Government can object to scrutiny, but let us not pretend that that is what we are getting from Labour Members. What we are hearing today is not constructive opposition—not a plan to reform universal credit, but an attempt to wreck it. It is an attempt to paralyse a policy that will help 250,000 more people get into work and to block a reform that will increase opportunity. It is an attempt to play politics but with no attempt to set out a real alternative. I say to my colleagues, well, let them do that, but we will proceed. We will address the historical failures of our benefits system, we will increase opportunity, and we will deliver a welfare system that puts work at the heart of it.
Neil Gray (Airdrie and Shotts) (SNP)
Back in 2010 when universal credit was first mooted by the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), the SNP gave it a cautious welcome. My predecessor as the SNP’s social justice spokesperson, Dr Eilidh Whiteford, said at the time that
“some of the measures set out today—particularly the universal credit—are very welcome”.
The initial premise of a simplified social security system streamlined with one payment was a good idea. The SNP still supports that idea.
However, successive Chancellors and Work and Pensions Secretaries have not just salami-sliced the idea; they have hacked it to bits as £12 billion of cuts need to be found from somewhere—anywhere—within the DWP. The fast-fading dream of a budget surplus meant arbitrary cuts to departments across Whitehall, but particularly the DWP, such that indiscriminate and unco-ordinated cuts were required. Cuts to tax credits, to the work allowances, to employment support allowance and to housing benefit—all component parts of universal credit—have undermined the new system. Indeed, having initially welcomed the premise behind universal credit, Eilidh Whiteford was one of the first to warn about the problems we see in its roll-out today. I wish she were standing here today for that reason.
Yesterday a group of very prominent Government Back Benchers met the Prime Minister and the Secretary of State and presented them with a set of areas which the Government could act on quickly as the roll-out was going on, and which would immediately help people and improve universal credit. Let me be clear: we do not want to see universal credit scrapped; we want it fixed and improved. The improvements suggested yesterday were cutting the automatic minimum wait from at least six weeks to a guaranteed four weeks, making payments on a fortnightly rather than a monthly basis, and doing more on advance payments to make them part of the award and therefore not recoupable as a loan. Those would be very welcome steps. None of those changes would break the bank. All of them would help. All of them would make a meaningful change to people’s lives. Those changes are the focus of what SNP Members and the Scottish Government have been calling for over the course of months and years, so of course we would have supported them.
Jess Phillips (Birmingham, Yardley) (Lab)
The suggestion that I would like to add to that list—I wonder if the hon. Gentleman agrees with me—is that the Department might start to monitor whether people have requested split payments, which were put in place by campaigners like me to ensure that victims of domestic violence can access any of their finances. At the moment, under the current system, they have to admit it in the jobcentre, often in front of their partner.
Neil Gray
I thank the hon. Lady for her intervention. That is one of the flexibilities that the Scottish Government are going to be using, so yes, we absolutely support it. Indeed, I was about to go on to some of the areas where we would want the Government to go further.
We want the Government to address single household payments; to reduce the 63% taper rate, which far exceeds the top rate of tax; to scrap the two-child tax credit limit and the rape clause; to look again at cuts to housing benefit; to look again at employment support; and to look again at the work allowances. I understand why the concerned Tories chose the issues they did—because they are easy and quick to do without costing much money—but it appears that their pleas have fallen on deaf ears, at least for now. I suspect that if the Government abstain this evening, again, it will be only a matter of time before changes have to be made—so why not do it now? If the Government are abstaining to play for time until the Budget, what happens with the areas about to experience roll-out over Christmas? The Government must commit to fix this now.
Paula Sherriff (Dewsbury) (Lab)
Does the hon. Gentleman share my concern at learning about my constituent who suffers from severe mental health problems, failed a PIP assessment, and was told to claim universal credit? He has a sick note up until the end of December but was made to sign a form advising him that he will take any job. The sick note was dismissed by the work coach, who said that if he did not sign he would be sanctioned.
Ronnie Cowan (Inverclyde) (SNP)
My constituents had universal credit rolled out last November, and we have been bearing the brunt of it since then. The only measurable difference we have seen is that food bank referrals have gone up by 70%. People cannot wait for the Government to make up their mind on how they are going to fix this system.
Neil Gray
I wholeheartedly agree with my hon. Friend, as do the expert charities and organisations involved in alleviating food poverty. The Secretary of State will, of course, claim to have listened to concerns and made a concession by apparently reducing the time taken to process advance payments and crisis loans. Leaving aside the point that I have already made that for many, myself included, the very fact that these advance payments exist highlights that universal credit is failing, I struggle to see what has changed since his announcement. I know from my written parliamentary question this week that there is no data available on how long the claims took to process previously, but my suspicion is that it will not be too dissimilar to before the supposedly big concession in the Secretary of State’s Tory conference speech. I do not think that anything has really changed.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is important to understand and address all the unintended consequences of universal credit. Does the hon. Gentleman agree that it is vital for the Government to talk more to local authorities, which are often on the receiving end of people in crisis—those who have been made homeless or who are struggling to pay for food for their families? As an illustration, universal credit claimants make up 15.4% of all local authority tenants in my borough, but they account for 49% of all tenant arrears. That is not unusual.
Neil Gray
I agree, and I think it is good for agencies to talk to each other to ensure that the system works as smoothly as possible.
In spite of the concessions and potential changes, and in the full knowledge of the evidence of the harm that universal credit is doing to our constituents, the Government are determined to press on. As the House of Commons Library briefing points out, the problems include
“financial hardship and distress caused by lengthy waits before the first payment of UC is received, compounded by the 7-day ‘waiting period’ for which no benefit is paid; some, particularly vulnerable claimants, struggling to adapt to single, monthly payments in arrears; inflexible rules governing Alternative Payment Arrangements such as direct payment of rent to landlords;”
and
“increases in rent arrears, with serious consequences not only for claimants but also for local authorities and housing providers, as a result of exposure to greater financial risk”.
That is why the Scottish Federation of Housing Associations has circulated a briefing ahead of this debate in support of a pause and fix of universal credit. In addition, homelessness claimants have been unable to get help with the full cost of emergency temporary accommodation.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The point that the hon. Gentleman makes about the impact on social landlords and housing associations is absolutely correct. We have not yet seen the full roll-out in Cardiff—it is not due until the new year—but I have been contacted already this week by social landlords who tell me that average rent arrears are as much as £500 for universal credit claimants, and that some have had to wait as long as three months to get their payments in place.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Does the hon. Gentleman accept that the breaking of the system has gone too far when organisations such as the Greater Manchester Law Centre refuse to support universal credit, on the basis that it results in further adversity and punishment for vulnerable people?
Neil Gray
Yes, absolutely. The Trussell Trust has reported a 17% rise in food bank aid in areas in which universal credit has been rolled out, which is double the year-on-year rise in the rest of the UK. There is, therefore, a direct correlation between the roll-out of universal credit in its current form and people living in food poverty. That cannot and should not be ignored. Citizens Advice in East Lothian, where UC has been rolled out, says that more than half its clients on UC are £45 per week worse off. The third of clients who are better off are up only 34p a week. Citizens Advice Scotland says that rent arrears are up 15% in UC areas, compared with a 2% drop everywhere else in Scotland. The DWP’s own figures show that one in four UC claimants wait longer than six weeks—some of them up to 10 weeks—to receive a payment.
The SNP has been warning about these issues for years. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) met the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), who was then the Under-Secretary of State for Scotland, on 14 March 2013. My hon. Friend was, at the time, the leader of the Highland Council, which was one of the first areas for roll-out. Nothing has been done. The warnings from Highland have been ignored, despite the roll-out being designed to allow improvements to be made as it progressed.
Where universal credit is currently in operation, rent arrears have spiked, because housing benefit is no longer paid directly to the landlord and people are not getting their money on time. Food bank need has grown because of the minimum six-week wait for payment. In-work poverty is rising as new work benefits start to become sanctionable, and the incentive to work is removed by the cuts to work allowances.
Of course, the DWP has claimed, and will claim, that universal credit is motivating people into work, but that is not true on the scale that it would wish us to believe from its rhetoric. The DWP’s own figures show that for the 2% of jobcentres with UC, there has been a 3% uplift in employment rates. That accounts for all the factors that contribute to people finding or staying in work. Are the rises in food bank use, rent arrears and in-work poverty really worth a 3% uplift in employment, when many of those jobs are precarious, low-paid and unsustainable? The DWP must look again at cuts to work allowances to really make work pay, cut in-work poverty and allow people to get on. The roll-out is supposed to allow the DWP to adapt where things are going wrong, and to fix the problems. Why, then, are the Government not listening to their own Members, to the expert charities, to the Scottish and Welsh Governments and to constituents?
On the subject of listening to constituents, the hon. Member for Moray (Douglas Ross) is failing his constituents by failing to be here to take part in a potential vote on this issue, which will impact on thousands of his constituents and a huge proportion of children in his constituency. Normally, Whips give slips for votes or business days so that MPs can take part in important constituency events or travel with Committees. The Government Whips appear to have slipped the hon. Member for Moray so that he can run the line at a football match in Barcelona. Far from standing up for his constituents, who would get sanctioned for not turning up to a work-related meeting—
Lucy Frazer
On a point of order, Madam Deputy Speaker. Is it appropriate, in a debate about universal credit, to talk about the absence or otherwise of a particular Member of Parliament?
Madam Deputy Speaker (Mrs Eleanor Laing)
I allowed a passing reference to the hon. Gentleman, because I understand from exchanges at Prime Minister’s questions that the hon. Gentleman in question had already been informed by colleagues of the hon. Gentleman who currently has the floor that his name might be mentioned in this context today. I have allowed a passing reference; that is all. I think we have had enough about the hon. Member for Moray.
Neil Gray
At the start of the year, Mr James Moran from Harthill in my constituency qualified as an HGV driver and managed to find work on a zero-hours contract as a driver while also receiving universal credit—exactly the sort of scenario under which universal credit was supposed to work better. Not long after gaining employment, however, Mr Moran was sanctioned, despite being in employment. As he started the process of appealing the sanction, he suffered a stroke, which meant that he was no longer able to work as a driver. As the sanction was still in place, he returned home from hospital with no means of receiving an income. Despite getting some help from his elderly parents, Mr Moran struggled with no money whatever for more than a month. He then suffered a second stroke. Mr Moran has advised me that the doctors who treated him in hospital at the time of his second stroke admission told him that the low blood pressure that caused the second stroke was almost certainly caused by malnourishment. That malnourishment was a direct result of a DWP sanctioning error, forcing Mr Moran to live without an income—to live on fresh air.
I wrote to the Secretary of State about the case on 1 September and have repeatedly chased his office for a reply, but I have received nothing in return to date. The six-week minimum wait appears to be built into the Secretary of State’s correspondence turnaround as well. I do not take that personally, because I gather from press reports that the Chair of the Select Committee on Work and Pensions has had similar problems with getting the Secretary of State to put pen to paper. Perhaps he will now chase a reply.
The revelation last week that our constituents on universal credit had to pay 55p a minute was a further dent to the public’s confidence in this Government’s handling of universal credit. It should not really have been much of a revelation, as my hon. Friend the Member for Glasgow South West (Chris Stephens) has been raising the telephone tax issue for months—and what a win for my hon. Friend this morning, as, following his ten-minute rule Bill in February, the Government have finally announced that the phone line will be free. But why must we wait until the end of the year for all telephone charges to be scrapped? The Government should bring in that welcome concession now.
Alex Burghart
Did any SNP Members, when they raised this issue, ever point out that there was a call-back service?
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Why are hon. Members shouting?
Neil Gray
It is little wonder that the Government have moved. We all watched in horror as the Chief Secretary to the Treasury was put up to defend charging people with no income—living on fresh air—55p a minute to get help and answers about why their payment had been delayed. She told viewers of the BBC’s “Daily Politics” to go to their local jobcentres instead of lifting the phone to the DWP—the same jobcentres her Government colleagues are shutting. After being pressed time and again by Andrew Neil, the Chief Secretary, who has quite a bit of influence over financial matters in this country, could neither defend nor explain why people on zero income were paying more to access help than people under investigation for tax fraud, although the irony appeared to be lost on her.
The idea that this concession has been made to appease the Opposition or just a few concerned Government Back Benchers is of course nonsense. This morning’s concession was made for no other reason than to try to deflect attention from the fact that this Government do not carry the support of their own side of the House, never mind of the House in its entirety. It is a red herring to divert press and media coverage away from the rebellion on the Government side of the House.
In conclusion, I return to the other areas on which the Government could act now at little cost, but which would benefit so many people. In doing so, I wish to appeal directly to Tory and Democratic Unionist party Members who have been working hard behind the scenes to try to get the Government to shift. Tory MPs have raised this issue with the Prime Minister, and DUP MPs have signed early-day motions consistent with the motion. The appeals have been made, the case has been made and the evidence is there for all to see: universal credit in its current form is failing those it should be helping. We all want this system to work, which is why I have done what I can to help those on all sides to make this case.
The time has passed for walking by on the other side. It is crucial that we vote tonight to say to the Government, “You cannot just ignore this any longer. You cannot plough on regardless. You must act, and act quickly.” Yesterday, the Prime Minister and the Secretary of State met concerned Tory MPs, who made suggestions that would garner support across this House and make a major difference to people on universal credit. It is crunch time now. What are Ministers and concerned Tories to do now? We have an opportunity this evening to make a real difference. That is what we all came into politics for—to make a real difference, and to see a problem and to fix it.
The Government, when given a way out of this entrenched position, appear to have chosen to plough on, turning their face against reasonable offers, in the face of the evidence of destitution. I say to the DUP and to Back-Bench Tory MPs, on behalf of their constituents and mine in Airdrie and Shotts, “Don’t give up the powerful position you find yourselves in tonight. Take the opportunity to force real change, send a message to the Government that they know they cannot ignore and vote for the motion to fix universal credit.”
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I rise to support my right hon. Friend the Secretary of State, who I thought made an excellent speech. I congratulate him on the courage and the spirit in which he produced his commentary against quite a lot of what is really scaremongering about the way in which the system has been designed.
First and foremost, the point I would make about universal credit is that it was designed to simplify the system, as well as to get more people into work. The second but very important element is that universal credit is about dealing with the very great difficulties of identifying those people—the minority, admittedly—who need universal support and then, with councils, providing them with help on debt counselling and getting them into the banking system in order, basically, to get them ready for work. Until now, those people have by and large been written off and forgotten about in a complex system—disjointed between councils and jobcentres—that did them no favours and provided them with no support. That is what we were trying to get rid of and believed we were actually getting rid of.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Will my right hon. Friend give way?
Mr Duncan Smith
I recognise that time is limited, so I will limit the number of times I give way.
Universal credit is not just about getting people into work; it is actually about changing lives so that those people are ready and better able to enter work. Why are there monthly payments? The very simple answer is that over 80% and rising of all work is paid monthly, and the figure will soon be close to 90%. That means that if people are not ready, able and prepared to pay bills and deal with their money in monthly periods, they will never survive in the world of work, as has happened to many people crashing out of work.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Will the right hon. Gentleman give way?
Mr Duncan Smith
I will give way to other Members in a minute, but let me make a second point. When it comes to housing, why do we want people to pay their rent, rather than always have it paid for them directly? There is a simple answer. All too often, housing associations and local authorities receive the money directly, but then do very little for the tenants. They often know very little about their tenants, and they quite often care even less about their lives. The result is that many tenants run up arrears because nobody bothers to get involved.
Several hon. Members rose—
Mr Duncan Smith
I will give way in a minute.
That is why universal support—now bringing in councils—will identify such people and help them. That is the purpose of universal credit.
Michael Tomlinson
Was my right hon. Friend as surprised and disappointed as I was, during Prime Minister’s questions, to hear this policy described and characterised as “calculated cruelty”? There is nothing cruel about getting more people into work. There is nothing cruel about encouraging more people to work more than a mere 16 hours. There is nothing cruel about simplifying an overly complex system. The cruelty is trapping people in a lifetime of benefits.
Stephen Timms
The right hon. Gentleman has explained the theory of the four-week delay, but does he accept that that theory simply does not work for the very large number of people who are still paid weekly?
Mr Duncan Smith
It is not a theory, but I will come on to that in a minute. The right hon. Gentleman and I have had plenty of conversations and discussions about the structure of this, and I want to take him up on that point.
I want to make the point, which is not often referred to by Labour Members, that the whole nature of the roll-out was deliberately set so as not to repeat the grave mistakes made when they rolled out tax credits and other benefit changes.
Mr Duncan Smith
No, because I am conscious that others want to speak, but I will come back to the hon. Gentleman in a minute.
I recall that my surgery was full of people who, under the tax credit changes, found they had no money at all. When Labour rolled out tax credits in a big bang, over 750,000 people ended up with no money at all. Since then, the thresholds have had to be raised dramatically to get money to those people.
Mr Duncan Smith
I will give way in one second.
The roll-out of universal credit has been deliberately designed—it is called “Test, learn and rectify”—so that, as it happens, we can identify where there are issues, rectify them and then carry on rolling it out. I want to give an example of why stopping the roll-out now will not work.
One area that we discovered early on is that landlords were simply unaware of who was on benefits. As a result of all that, arrears would be racked up, but they did not know they could get that stopped and have direct payments made. That will be changed in the next stage of the roll-out, because a portal between landlords and the service centre will allow them to establish that immediately. Unlike the local housing allowance, under which people ran up huge levels of debt, but reset slightly and carried on, universal credit allows them only a two-month period of debts before they go on to direct payments. That critical change will be one way of resolving the problem.
Mr Duncan Smith
I will come to that. The hon. Gentleman should not worry—I will not resile from why I resigned.
Too much of the debate has been based on evidence that is months old, when rectification has taken place and changes have been made. Let me give an example that has not been mentioned. The mistakes in tax credits and housing benefit mean that more than 60% of those coming on to universal credit already carry debt and rent arrears. Universal credit is identifying those people and having to clear up the errors. That is an important point. Before universal credit, too many people were left to get on with their lives and get deeper and deeper in debt.
Anna Soubry
My right hon. Friend and I are about the same age. Does he share my concern that anyone who is younger than us and listening to the debate might labour—no pun intended—under the misapprehension that, before the election of a Conservative Government in 2010, the previous system was perfect, when it has been bedevilled by flaws for decades? That is why this simplified system, when all the bumps have been ironed out, is welcome.
Mr Duncan Smith
I am grateful to my right hon. Friend, who has borne the years better than me. However, I will do anything for a kind look—[Laughter.] Particularly from my right hon. Friend.
It is interesting that, in the past 24 hours, the Joseph Rowntree Foundation has made the following statement:
“Universal credit has the potential to dramatically improve the welfare system, which is fragmented, difficult to navigate and can trap people in poverty.”
It went on to say that the system will help people
“transition into work and will respond better to people’s changing circumstances.”
I agree. It would have been nice if the Opposition had started their debate by being clear and positive about how and why universal credit can change lives.
The point about test, learn and rectify is that it does exactly that. My right hon. Friend the Secretary of State made many points in his excellent speech about the changes that are already beginning to happen. For example, some of the rent arrears are beginning to come down and the portal will help enormously with that.
However, I ask my right hon. Friend about universal support, which is the critical other bit of universal credit that no one has mentioned. It allows us to pick up the pieces around universal credit and deal with them on a human basis. Universal credit flags up when somebody has a debt problem and when they are running into arrears. Universal support is vital to work directly with them, using councils, jobcentres and all the other agencies, and hub up around them to help them change their lives on the basis of knowledge about how to pay their bills, their banking facilities and their debts. I ask for reassurance in the winding-up speech that Ministers will put in the extra effort, focus—and money, when necessary—to ensure that universal support rolls out successfully alongside universal credit. That is critical.
Neil Coyle
The right hon. Gentleman seems to acknowledge that universal credit has not worked for everyone, so does he agree that it has been almost as bad for some of those affected as online reviews of his novel, “The Devil’s Tune”? Comments include: “frighteningly bad”, “rubbish”, “utter drivel” and “hilariously awful—an outstanding compendium of bottomgravy”.
Mr Duncan Smith
I thought that was a reference to the hon. Gentleman’s speaking ability in the House.
Universal credit is a huge driver for positive change that, as the Joseph Rowntree Foundation said, will not just get people into work quicker, but help us identify those in deep difficulty and change their lives. That is the critical element that I hope will unite the House on what universal credit is all about.
We should not stall universal credit because doing so would damage it. Changes need to be made, and the problems that have been discovered need to be rectified as we move forward. The way that the system is being run is therefore right.
I direct my right hon. Friend the Secretary of State to some of my earlier comments. As I said, I hope that the Chancellor will look again the way in which financing for the work allowances has been reduced. I would like that to be changed. My right hon. Friend made a very good point when he said that we keep what needs changing constantly under review. The issue around waiting days is critical—I know that he will consider that and see if the evidence stacks up for whether changing that would make a major difference.
I congratulate my right hon. Friend on moving swiftly to ensure, as was always the intention, that jobcentre staff can pay out the advances on the day or within the week and, more than that, notify every would-be recipient of universal credit that they are eligible to receive them. That will dramatically change the position of many who have found themselves in difficulty because of the monthly wait.
Mr Duncan Smith
I apologise, but I am about to conclude.
Universal credit is the single biggest change to the welfare system. Those who care about it know that it is capable of dramatically changing lives for the better. My party should be proud of it. I will therefore not support the motion because it intends to stop the roll-out and damage universal credit for short-term political reasons. We should resist that, ask the Secretary of State to make the changes, but not stall the roll-out because universal credit changes lives and delivers an improved quality of life to thousands of people.
Caroline Lucas
On a point of order, Madam Deputy Speaker. I hear that political journalists are tweeting that the Government do not plan to take part in the vote later. That would be a show of contempt for the Chamber and our constituents throughout the country. Is there nothing you can do to prevent the Government from opting out of the Chamber’s democratic procedures?
Madam Deputy Speaker (Mrs Eleanor Laing)
The tweets of political journalists are certainly not a matter for the Chair. I class that as rumour, which is not a matter for the Chair. What the Government decide to do is a matter for them, but we have several hours of debate ahead. That is the important point for the Chamber to note.
Several hon. Members rose—
Madam Deputy Speaker
Order. Before I call the next speaker, it is obvious to the House that a great many people—about 85—wish to speak. I will therefore have to put a formal time limit of four minutes on speeches. I want to give that warning now so that hon. Members can trim their orations accordingly. Everybody may sit down now. I will not impose a formal time limit on the Chairman of the Select Committee on Work and Pensions, whom I trust to take a reasonable and correct amount of time.
Frank Field (Birkenhead) (Lab)
I simply want to ask the Secretary of State a question. He said in his contribution that the scheme was working well—indeed, working so well that he was accelerating the pace of the roll-out. I reported to him in the Select Committee meeting this morning that Birkenhead food bank, after talking to other food banks in areas that have experienced the roll-out, believes that it will need 15 more tonnes of food this Christmas. What message should I take home, please? Should I tell the good citizens of Birkenhead that the food bank is scaremongering, that we should pay it no attention, and that we should take the Secretary of State’s word that the system is rolling out well, or that they should contribute the extra 15 tonnes to the food bank to prevent people in Birkenhead from being hungry over Christmas as a result of the roll-out and the right hon. Gentleman’s inability to deliver a scheme that works?
Mr Mark Harper (Forest of Dean) (Con)
I will follow your strictures, Madam Deputy Speaker, and be relatively brief.
Let me take first the words on the Order Paper, which do not bear any relation to what the shadow Secretary of State said. She said she was asking the House to support a motion to pause and fix universal credit, but that is not what it says. It is what the title said yesterday, but between yesterday and today all the Opposition are now calling for is for us to pause universal credit and not bother doing any fixing at all.
Mr Harper
I was grateful for my hon. Friend’s earlier intervention, which was taken up. It is a serious point. The former Secretary of State, my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), made the point that pausing the roll-out of universal credit does not help anybody, given the positive effects it is having on getting people into work and allowing them to progress in the workplace. My right hon. Friend the Secretary of State made the point that this is both an in-work and out-of-work benefit. That means that those who are out of work and are thinking about taking a job can have the confidence to do so, because it will not mean throwing up in the air all their existing arrangements for paying for their house and supporting their family. They will have the confidence to take on that work and to take extra hours, because they know they will be better off and that if it does not work out they will not have to go back to the drawing board.
Ms Karen Buck (Westminster North) (Lab)
One of the principal concerns about universal credit is what is happening to people’s housing costs. Is the right hon. Gentleman aware that two-thirds of all private landlords now report that the people on universal credit they are renting to are in arrears? Will he support the call of housing charities for changes to be made to the roll-out of universal credit to make sure that when people take that step into work they do not put themselves at increased risk of losing their home? As currently envisaged, that is exactly what the roll-out will do.
Mr Harper
Let me address part of that point now and I will also come on to it later in my remarks. We should not compare universal credit with some mystical world of perfection; we should compare it with the existing system. Under the existing system, housing benefit is not perfect. There are lots of issues with housing benefit and tax credits in the existing benefit system. I understand that the citizens advice bureau has about 600,000 ongoing cases under the existing benefit system, so we are not talking about comparing universal credit with perfection. The existing system is not very good, does not work very well, and does not support people very well. Universal credit is an improvement.
On housing and the direct payment of landlords, which I know is controversial, my own view is that it is better to assume that people can manage their rent themselves. In cases where they cannot, and it is shown that they cannot, my right hon. Friend the Member for Chingford and Woodford Green made it clear—as the Secretary of State did, with the roll-out of the housing portal—that we can deal with that. I do not think it is reasonable to assume that everybody on universal credit is incapable of managing their own money. That is what is assumed with the insistence on paying landlords directly. The other advantage of paying the person directly is that landlords cannot then discriminate against people who get housing benefit. If universal credit is paid directly to you and you make the payment, the landlord does not know that you are a benefit recipient and therefore cannot discriminate against you by having signs in the window saying, “I won’t take people on DSS,” which I know some landlords do.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Will the right hon. Gentleman give way?
Mr Harper
I do not have very much time and I am conscious that Madam Deputy Speaker wants me to be brief, so let me move on to my final two points.
On the design of the system, my right hon. Friend the Secretary of State is exactly right. It is about setting up a system that is like work, so that those people who are not yet in work have a system that enables them to get into work and manage those challenges. There was talk by the shadow Secretary of State about assuming IT skills. Universal credit is digital by default—it is only by default; people can still apply on paper—and I think 99% of people make claims electronically. In the modern world, most jobs have to be applied for electronically and most jobs require a certain level of IT skill. If someone is not capable of applying online, they will find it very difficult to get into work. It is important that the work coach can identify that requirement, so the proper help and support can be put in place to enable that person to have the digital skills to be able to get into the workplace.
The final point I wanted to address, which I think is potentially life-changing, is the nature of job opportunities open to people. We all know that the existing benefit system has hour limits, so people are unable to take jobs with more hours. There is a 16-hour limit and a 24-hour limit. Employers end up designing jobs around the benefit system, not the requirements of their business or the requirements of the individuals. Universal credit means that an employer can design a job around the requirements of the business. It means that if somebody is successfully working 16 hours and wants to take on more hours to support their family, they do not have to think about the benefit system. They can think about their own arrangements and the needs of their family. They know that universal credit will adjust to mean that they are better off having taken that job and that they will be better off taking those extra hours.
Universal credit is a very powerful benefit and a real change. It will, as has been said, change the culture and the life-chances of many people. I therefore support the continuation of the roll-out of universal credit with a careful test, learn and rectify approach, particularly with a Secretary of State who has demonstrated that he listens. I am not persuaded to support the motion on the Order Paper. I find it very easy to resist that temptation.
Judith Cummins (Bradford South) (Lab)
I am pleased to be called to speak in this very important debate.
I want to start with the quotes from the Joseph Rowntree Foundation mentioned by the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). He was very selective, as the foundation was much more cautious about the roll-out of universal credit. Without reform and redesign, universal credit will hurt the very people it is supposed to help: working people, families and communities right across this country.
I am proud that, as a Labour Member of Parliament, I stood in this year’s general election on a manifesto pledge to reform universal credit and end the injustice of claimants having to wait six weeks for their payments. During those six weeks, life does not stop. Rents still need paying, food still needs to be put on the table and the heating bills still need to be paid. I am interested in making sure that working people up and down the country can enjoy dignity, fairness and stability in their lives. Without reform, universal credit promises quite the opposite: it creates instability, uncertainty and injustice.
Working people cannot survive another blow to their finances. Seven years of this Conservative Government has left working people struggling to make ends meet, and universal credit risks pushing many over the edge. This headlong rush to roll out universal credit will have dreadful consequences for this country’s children and young people. They will suffer the most. That is what the Government must remember: standing behind their ministerial statements and spreadsheets are real people, real families and millions of vulnerable children.
As the House knows, the scale of child poverty in this country, which is one of the richest in the world, is appalling. One in four children grow up in poverty today: that is 28%, or nine children in every classroom of 30. In my own constituency, over 9,000 children live in poverty—a shocking 34% of all our children. The Child Poverty Action Group has stood against the rising tide of child poverty. Its analysis reveals how working families will suffer: all families with children will be worse off by an average of £960 a year by 2020, and all single-parent families will be left worse off by, on average, £2,380. The Government should be ashamed of these figures. They have created a system that punishes the very people our welfare system was designed to protect. If the Minister is not yet convinced that a change is necessary, I ask that he reflect on the words of a former Prime Minister who described universal credit as
“operationally messy, socially unfair and unforgiving”.
As he will know, those are the words of former Prime Minister John Major. I ask that the Minister listen and pause the roll-out for the sake of working families and children of this great nation.
Justin Tomlinson (North Swindon) (Con)
In highlighting the fact that these are real people, the hon. Member for Bradford South (Judith Cummins) insinuates that Government Members have no understanding, which is absolute nonsense. I went to a school at the bottom of the league table, my father died at an early age, we had bailiffs at the door, and there was no support. We absolutely understand the importance of providing opportunity. That is what drove me into politics and why I support universal credit. I do not want it paused because it offers people a transformational opportunity.
I am not just plucking stats out of the air. I have hosted roundtables, I have visited jobcentres, I have talked to vulnerable people having to navigate incredibly complex, unique and individual challenges, and for the first time, with predominantly cross-party support, we have now introduced a system designed to treat people as individuals and give them tailored support.
Neil Gray
I thank the former Minister for giving way. He emphasised that he did not want the roll-out paused, and I understand his perspective, and that of other Conservative Members, on that point, but he did not mention any potential fixes. Does he appreciate the concerns raised and the fact that in some areas universal credit could be improved?
Justin Tomlinson
I have only just started! And I do not have long.
For me, the key is the simplification of benefits. One had to be a nuclear physicist to navigate the old system. We all saw in our casework some of the most vulnerable people missing out on benefits to which they were entitled. That was the driving priority for introducing universal credit, which removes the cliff edge for those wanting to enter or progress at work and those desperate to build up their hours, particularly those with disabilities and fluctuating health conditions, but unable to break through the 16-hour barrier. That has now been removed.
One of the most important benefits of universal credit is that for the first time people have a named work coach—an individual who will provide them with their own unique and tailored support, whether that be extra training, childcare, housing or, for the first time, in-work support. When I talk to staff in jobcentres, I see how incredibly enthused they are. We have empowered them to identify and bring together the help and support people need. That has been combined with a refresh of our jobcentres. For the first time, there is an attitude of wanting to help, a “can do” attitude—an attitude not of trying to find reasons why people cannot do things, but of doing everything we can to give them that opportunity.
I was asked in the intervention what the fixes were. The obvious one—the one we all wanted to see—was changes to the telephone number, so the announcement today was welcome. I also want to see greater engagement with employers, however, to bring them into jobcentres. My right hon. Friend the Member for Broxtowe (Anna Soubry) mentioned that we were close to full employment, and many of those still looking for work, being very far from the jobs market, need additional help. When I was Minister for disabled people, I talked to many people who were desperate for an opportunity and had skills, but the employers were not coming forward to hook up with that. We, as a society, through our refreshed jobcentre network, need to reach out to employers and say to them, “Where are your skills gaps? How can we help you change and adapt to take advantage of the huge wealth of talent?” With the right support, those people can contribute and make a positive difference both to employers and themselves. That has to be a priority.
We must also recognise the need for local solutions around the training options provided. We all represent diverse constituencies and have different employers. If a town is predominantly retail or manufacturing, that should be reflected in the 12-week programmes. Jobcentres must work with employers to set the type of training available in a way that maximises opportunities.
We have to grasp this opportunity to support people in work. This has never happened before. Most of us were pushed by our families to succeed. If we did well on our first entry into work, we were told to push for a promotion. For many of those entering work, however, particularly those on the national living wage who do not necessarily have that extra support, we should be providing mentoring and support. If they are turning up for work regularly, they should be talking to their employer and asking for a promotion, to be made a supervisor, or whatever it might be. We all want full employment and career progression. This is a huge opportunity and we all have a duty to get behind it. Yes, we are right to challenge the detail, but universal credit is transforming people’s lives and I fully support it.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
The roll-out of universal credit affects more than 5,000 of my constituents, as Southwark has been one of the trial authorities for “full service area” and has suffered all the consequences as a result. It is fair to say that it has been a disaster for some of those involved: the individuals left waiting 12 weeks-plus in many cases; the 1,242 Southwark Council tenants facing eviction-level arears owing to universal credit delays. Only 11% of council tenants are on universal credit, but it accounts for 40% of all arrears—over £5 million. To cite the comparator that the Secretary of State seemed to struggle with: the average account balance for people on housing benefit is £8 in credit; the average universal credit claimant is now £1,178 in arrears.
It is equally damaging for some other landlords. Leathermarket JMB is absolutely brilliant and has done a huge amount of work to support people through the process, despite being denied information and access to the landlord portal at the beginning. Its average tenant not on universal credit is £73 in credit, whereas those on universal credit have arrears of £648 on average. Jobcentre Plus staff know that the system cannot cope and that the IT system is too fragile and inflexible and does not reflect things such as childcare costs or fluctuating incomes.
As for the voluntary sector, according to the food banks and Citizens Advice Southwark, the number of people coming through their doors has gone through the roof. Among the last tranche of people to whom universal credit was extended—[Interruption.] The Minister is disagreeing. We have had this discussion elsewhere. I will send him a letter about it rather than get into it now. Following the extension of universal credit to parents, the number of children using Southwark Pecan food bank tripled. That is not uplifting—the word credited to the hon. Member for North East Somerset (Mr Rees-Mogg)—but shameful.
Ms Buck
We have heard from Government Members about the advantages of bringing all the benefits together into a single system, and there are indeed benefits of simplification, but is not the downside exactly as my hon. Friend says—that when something goes wrong in one part of the system, it brings about a potential catastrophe right across the system, including the potential loss of people’s homes?
Neil Coyle
My hon. Friend is absolutely right.
The Government stressed again today that they put a lot of faith in advance payments, but those cannot cover full rent costs. We found out this morning that the new guidance for Jobcentre Plus was only sent out this week, demonstrating perhaps that the Government were more afraid of their Back Benchers in today’s debate than they were concerned to address the underlying problems. We have just had a spat about the landlord portal. It is still not fixed. The Government claim it is, and there is some faster information sharing, but there is no evidence of an impact on cutting delays, inaccurate payments or overall arrears levels. The Government acknowledge that 20% of social landlords will never be included in the landlord portal—and that is before we look at the private rented sector.
There are other solutions that have been put to the Government not just recently but for months and years. We need to end the insistence that only the claimant can confirm rents. There is no point having “trusted partner” status for landlords and then ignoring them when they say that rent is owed. We need to remove the seven-day wait period for housing costs and introduce a transitional period of rent payment for those coming from housing benefit—rents do not change just because DWP decides to force someone on to a different programme. We should also backdate housing costs. All these issues have been on the table, but the Government have ignored them.
The Government also need to improve real-time information collection. We know that DWP and Her Majesty’s Revenue and Customs have now set up a “late, missing and incorrect” joint initiative, thanks to information shared by my right hon. Friend the Member for East Ham (Stephen Timms), but the Department acknowledges that that does not address the system defects. The Government are treating the symptoms not the cause of the problems. Today is an opportunity to pause and address those underlying problems, not to push out universal credit even further, thereby increasing debt, poverty, arrears, evictions, food bank use and homelessness.
Peter Aldous (Waveney) (Con)
In my constituency the full roll-out of universal credit began in Lowestoft in May 2016, and is due to begin in Beccles later this month. In Lowestoft significant problems have been encountered: many vulnerable people have been placed in very difficult situations, and at times the system has struggled to cope. Over the past nine months the position has improved, but challenges remain, and it is important for lessons to continue to be learnt as the roll-out accelerates in the coming months.
On 21 February, the Minister for Employment, who is present, visited Lowestoft. He sat down with local DWP and jobcentre staff, the council leader and council officers, and listened to their concerns. Since then there have been steady improvements. The various agencies involved in the delivery of universal credit are generally working well together. Good initiatives have been introduced: there is a vulnerable people officer front of house, the citizens advice bureau works from the jobcentre, and the district council is holding regular workshops with private sector landlords. There is evidence that universal credit is allowing the jobcentre to support those in low-paid work, which it could not previously do. It is therefore able to improve their life prospects, and get them into work. I also think it appropriate to highlight the Secretary of State’s decision to refresh the guidance for DWP staff to ensure that anyone who needs advance payments is offered them upfront, and to make the helpline free of charge.
While it is right to acknowledge the improvements that have been made in recent months, it is important to recognise that much work still needs to be done. First, the long delays before some claimants receive a payment must stop. The Government must seriously consider implementing the recommendation from Citizens Advice that those who need it must receive a payment within two weeks, which they will not have to pay back.
Secondly, the role of private sector landlords in providing housing for claimants must be recognised, and they must be put on a level playing field with social landlords when it comes to setting up alternative payment arrangements. The “give tenants a choice” initiative, launched by the Residential Landlords Association and Shelter, should be looked at closely. If something is not done, the housing crisis will be made even worse as private landlords refuse to accept universal credit claimants as tenants. That will put more pressure on social housing, and will almost certainly lead to an increase in homelessness.
Finally, it is important to have in mind the vital role played by local housing authorities working in partnership with the DWP in the implementation of universal credit. They are having to bear the costs of providing emergency temporary accommodation and recovering housing benefit debt. Either those costs should be transferred to the DWP, or the councils should be given additional funds.
I understand why the Government wish to proceed with the roll-out of universal credit, and I give them my support. However, they must proceed with caution. They must not stick rigidly to a preconceived timetable; they must slow down or speed up as circumstances dictate. They should be pragmatic and not dogmatic, and they should continue to listen and respond to feedback.
Jessica Morden (Newport East) (Lab)
I am keenly aware that the full service roll-out is due to start in the Newport part of my constituency on 15 November. As has been made clear by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), and also by a host of organisations including Citizens Advice, Community Housing Cymru—which represents housing associations in Wales—the Trussell Trust, the Child Poverty Action Group, and the staff of those organisations on the front line, universal credit is not working for far too many people.
Although we support the principle of simplifying benefits, the evidence so far suggests that the design problems in the system, compounded by operational problems, delays and errors, mean that too many people are experiencing real financial hardship. In Newport—and in Caldicot, which will have full service in March—the DWP is dealing with only the simplest of claims from single people without children and without complex needs.
The ramped-up roll-out will widen to include more claims, as yet untested in the system locally. We have already seen cases of people waiting up to eight weeks for payments, not being able to meet financial commitments, borrowing and incurring interest charges, and struggling to catch up while remaining in debt. In my constituency, a family with three young children moved on to universal credit because of a new relationship, but then had to be moved back on to legacy benefits and tax credit because the system was not yet geared up for such cases. That family were left for eight weeks without a single payment, and had to rely on food banks for help.
The Government may decide to stick their head in the sand and ignore these valid criticisms, but let me explain what that might mean in my constituency. As I said earlier, the roll-out in Newport is due to start on 15 November. Given the six-week waiting period, my constituents will be lucky to receive their payment on the day after Boxing Day if it is on time, and not until the new year if it is not. No payments before Christmas will mean real hardship, and any payment received will be used to survive and to pay for food and heating, which by then—after six weeks with no income—will be a greater priority than paying rent. In neighbouring Torfaen, with the full service roll-out, 27% of Bron Afon tenants who moved on to universal credit in July had to wait an average of nine and half weeks for payment, which led to debt and borrowing from high-interest lenders.
I know that the Government will talk about advances, but they are not an adequate response. They cover only part of the universal credit claim, and must be repaid through deductions. The point is that people are being put into debt immediately. If half the number of new claimants have to rely on advance payments, the system is clearly wrong, and, as was pointed out earlier by the hon. Member for Airdrie and Shotts (Neil Gray), that constitutes an admission that the system is failing.
Kate Green
Does my hon. Friend agree that the problem is compounded by the level of deductions of third-party debt that are allowed under universal credit—for example, council tax or utility bill debt? It is higher than the level allowed under legacy systems, which means that people are left with much less money.
Jessica Morden
I absolutely agree. The point is well made.
I know that housing associations are doing all they can to help tenants, and that there are heavy demands on their advice services, not least when they are helping those who cannot go online. However, as Gingerbread has pointed out, two thirds of single parents are renting privately. What is happening to those with private landlords? Are they able to negotiate longer repayment plans?
I, too support calls from organisations such as Community Housing Cymru which want a pause in the accelerated roll-out of the full service until the problems caused by delays have been addressed, improvements have been made in relation to, for instance, the six-week waiting period and the seven days without pay, and—this was mentioned by my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle)—the issue of landlord portals has been sorted out.
Let me finally say a word about our local DWP staff, who are dedicated and extremely hard-working, although I cannot say that I have spoken to many who feel enthused. They are on the front line of the delivery of the roll-out. Their numbers have been cut, and all kinds of changes are taking place in their service. They need to be properly resourced and supported, and the Government must make that a priority.
The movement on the call charges is welcome but overdue. We now need the Government to move further. We need them to understand the very real impact on people, not least in the run-up to Christmas. They must consider the practicalities, and pause the roll-out.
Edward Argar (Charnwood) (Con)
It is right that we are debating this important issue and, given its importance to all of our constituents, it is right that we do so respectfully, recognising, even where we disagree, the evident strength and sincerity of the views of hon. Members on both sides of the House.
The shadow Secretary of State, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams)—with whom I do not always agree in this Chamber, but with whom I frequently agree as my fellow co-chair of the all-party group on dementia—made an important point in her speech, highlighting the need to fix our social security system to ensure it functions effectively. Our challenge is not that our historical social security system is badly designed, but that in many ways it was never designed as a whole at all. It has evolved from myriad changes over the decades, and for too long Governments of all shades shied away from this challenge. Universal credit represents a real step forward in addressing this, and in seeking to design a system fit for the 21st century, and it is the right thing to do.
Universal credit represents a progressive change to simplify the system, to tailor it to individuals, and to help to ensure work pays, removing that dreadful 16-hour cliff edge that previously existed.
Victoria Atkins (Louth and Horncastle) (Con)
In the context of the cliff edge, does my hon. Friend agree that under the old system some claimants lost £9 from every extra £10 that they claimed, and that that is what we are trying to correct?
Edward Argar
My hon. Friend makes the point succinctly and effectively, highlighting, too, the great deficiencies of the previous system. The simple truth is that universal credit is helping to get more people into work, which we can all welcome.
On the call for a pause, the shadow Secretary of State did not set out in detail what she wants to see changed through such a pause. What I did, however, hear this morning in the Select Committee was a Secretary of State who is listening, and who cogently set out how the staged roll-out is specifically designed to allow for lessons to be learned and subsequent roll-out to be refined and adapted where improvements can be made, but without the damage that will be done by pausing the roll-out.
Alex Chalk (Cheltenham) (Con)
On the roll-out being staged, does my hon. Friend agree that a situation in which currently 8% of claimants are on UC, and the proportion will rise to only 10% by January, hardly amounts to a precipitate roll-out?
Edward Argar
My hon. Friend makes a valid point, which highlights the point that both the Secretary of State and I have made, which is that this is being done in a very measured way.
I join other colleagues in welcoming the Secretary of State’s announcement in respect of the telephone advice line and the increased highlighting of the advance payments that are available. It is right that this help is in place, and I hope that my right hon. Friend will continue to take a close interest in how well this is working, making changes where necessary, and ensuring that all those claiming are treated with respect and supported. As my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) set out, universal credit is about treating people with respect and supporting them.
In seeking to ensure that we learn from the roll-out of universal credit and make changes where we can, as the roll-out is designed to allow, we must never lose sight of, or put at risk, the significant improvement of universal credit on previous systems and the significant benefits it delivers in helping people into work and changing their lives.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Government’s aim was to simplify and streamline the benefits system, to improve work incentives, to tackle poverty among low-income families, and to reduce the scope for error. The Government were, however, warned by IT companies that it was not possible to build a universal credit system, bringing the six systems together, in time for implementation, but they ignored that and continued; they developed in haste. The Government also ignored the former Secretary of State, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), when he called on the Prime Minister to reverse cuts in universal credit; it is still necessary to reverse all the cuts made to the initial system.
Former Prime Minister John Major described universal credit as “operationally messy, socially unfair” and socially unforgivable, but the Government did not listen to him. Experience tells us that the online system is far too complex, and was it ever really necessary for the helpline to cost 55p a minute? The announcement today is about appeasing Back Benchers; however, it will help new claimants.
The aim was to improve work incentives, and tackle poverty and low pay, yet the experience is of cuts to taper allowances, with 63% of every pound taken off people. Some families are £2,100 worse off than under the previous system.
Mr Jim Cunningham (Coventry South) (Lab)
I cannot see how this can be an incentive for people to go into work when most of the jobs they get are on zero-hours contracts. On the other hand, people are driven to food banks, which were brought in by the Churches to deal with the refugee problem, not to deal with the problems of this country.
Ms Rimmer
I agree entirely with my hon. Friend.
These people are stressed, suffering from the effects of poverty and the indignity of debt and borrowing from family and friends. Many are on medication for mental health issues, and much of this is debt related. My constituency of St Helens South and Whiston suffers from income poverty. Many of the jobs created in the last 10 years pay much lower wages. Some people are holding two or three jobs down and many are on zero-hours contracts. My constituency also has one of the highest prescription rates of antidepressants in the country, and many of those on that medication are young people and parents.
The assessment period for universal credit is based on four weeks working. My families do not have savings to live on for four weeks when they have been out of work, and their extended family does not, so they go into debt.
The Government have insisted on the poor paying the price of banker-induced debt, and they have used the global financial crisis to cut public services and stop the improvements that Labour introduced—policies that were responsible for lifting 1 million children out of poverty. Since 2010, the number of children in poverty has been rising. The Child Poverty Action Group has published figures showing that a further 1 million children may be driven into poverty, including 300,000 under the age of five—children hungry, children cold, children not able to go to school because they have not got a change of clothes. The Government are responsible for breaking up many families and children are suffering from stress. No wonder we have increasing numbers of children suffering from mental ill health.
The food bank in my full-service area has a 17% increase in usage—more than double the national average. More than half the users are people in work, and many of them are national health service workers.
Ms Rimmer
Not at the moment.
A Citizens Advice survey showed that more than 39% of respondents waited more than six weeks for payment, while 11% waited more than 10 weeks and some waited 11 weeks. Where do they get the money from to live and to buy food? Of those on universal credit, 79% are in debt, which puts them at serious risk of eviction. Private landlords are not as understanding as social and charitable landlords. Bailiffs bang on the door, gas and electricity get cut off, and people are even at risk of imprisonment. Of those in rent arrears, 42% went into debt after making their claim for universal credit. Due to long waiting times, many have had notice to quit and been evicted from their family home.
The Government need to stop and open their eyes and ears. They should help, not punish, the poor and disabled. Be fair. Pause and repair this system.
Rishi Sunak (Richmond (Yorks)) (Con)
I believe our welfare system should do three simple things. It must be compassionate to those who need our help, it must be effective in getting them the help they need, and it needs to be fair to those who pay for it. Simply put, universal credit is a rare example of a policy that delivers on all three counts.
To start with compassion, rather than recipients having to make calls to up to three different agencies when something in their life changes, universal credit simplifies the system and ensures that nobody misses out on a benefit that they are entitled to because of a bureaucracy that is simply too complicated to navigate.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Is the hon. Gentleman aware that people trying to claim universal credit have reported being on the phone for an hour trying to get their case dealt with? At 55p a minute, that cost is astronomical.
Rishi Sunak
I am sure that the hon. Lady was here and heard the Secretary of State make the point that the calls that have been made were all to local rate numbers. It is not right to say that they were premium rate numbers. As of today, those calls have been made free for all claimants, although they were offered the opportunity to be called back for free if the call charge was difficult. I am aware that the average wait time is two minutes, and of course a wait time of an hour is unacceptable. I am sure Ministers have heard that and will be doing everything they can to ensure that everyone across the country benefits from a prompt and cheap response.
At the same time as simplifying the system, universal credit humanises our bureaucracy by recognising that those who need our help do not have exactly the same needs. Instead of a faceless homogeneity, for the first time personalised work coaches can compassionately take into account the specific needs of each individual and their specific circumstances, tailoring the approach to them and ensuring that they get the specific help that they need.
Neil Coyle
How simplified, fair and supportive does the hon. Gentleman think it is for the 116,000 working disabled parents who are set to lose £40 a week from the disability income guarantee?
Rishi Sunak
I cannot say that I recognise that figure, because £700 million more was made available in the last set of universal credit reforms, all of which was directed at the most vulnerable in our society.
Rishi Sunak
No, I will carry on, given the number of people who want to speak.
Compassion alone is not enough. The effectiveness of our welfare system should be properly judged by the number of lives that it transforms, and that transformation comes from well-paid work. Universal credit ends the well-documented problem of single parents effectively working for free if they want to work for more than 16 hours. Universal credit ensures that all work truly pays, and it is working. Compared with the system that it replaces, claimants spend twice as much time actively looking for work and, for every 100 claimants who found employment under the old system, 113 will find employment under universal credit. In reality, the lives of more than 250,000 people will be transformed over the course of the roll-out through having a decent job and the opportunity to build a stake in our society.
Finally, universal credit is fair to the people who pay for it. In Britain today, we spend around twice as much on working-age welfare as we do on education. To put it another way, for every £1 that the taxpayer sends to the NHS, they also send £1 to the working-age welfare bill. Given the sums involved, I make no apology for speaking up for those who ask me, “Is this money well spent?”
Sarah Jones (Croydon Central) (Lab)
The hon. Gentleman talks of the transformational impact of universal credit, so will he please comment on the transformation for my constituents? In Croydon, two thirds of families in local authority housing are now in rent arrears and face eviction, compared with less than a third before universal credit was introduced.
Rishi Sunak
I obviously cannot comment specifically on what is going on in Croydon, but the reasons for rent arrears are complicated. The evidence shows that the level of rent arrears after three months of universal credit is exactly the same, if not lower, than under the old system.
Returning to the sums involved, universal credit ensures a responsible and sustainable system by putting in place a sensible regime of conditionality. That gives hard-working taxpayers the confidence that when they contribute to the system, not only will that help somebody to get back on their feet, but that the person will also have a responsibility to do their bit. That is fair.
Universal credit is not perfect—no system so large and complex can be—and we should make improvements where we can, but it is significantly better than what it replaces, and the fundamentals of what it is trying to achieve are sound. It has been implemented slowly and methodically. It is insane to argue that it has been rushed when the full roll-out will have taken almost a decade from start to finish. This is welfare reform in action: making things simpler, ensuring work pays, and transforming lives. I urge the Government to carry on with their plan.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
I am going to make a straightforward speech as I am aware of how many Members want to speak. I am conscious that many of our debates involve jargon that is inaccessible to most people who try to follow politics, so I rise to make just three basic points. First, I will explain what universal credit actually is. Secondly, I will describe what has gone wrong since the universal credit roll-out began. Thirdly, I will explain why it is so important that the Government halt—not scrap—the roll-out until we can deal with the problems effectively.
I find myself in a bizarre situation: I am going to stick up for the principles behind a Tory policy. Universal credit is a simplified online-only way of receiving benefits. It rolls together six benefits, including unemployment benefit, tax credits and housing benefit, into one personally tailored payment. It makes sense. For a lot of people, social security used to stop altogether once they began to earn above a certain amount. Universal credit seeks to remedy that by slowly and steadily declining as people earn more through their job, rather than suddenly stopping altogether.
That all seems absolutely reasonable, which is why I stress again that we are not calling for universal credit to be scrapped altogether. We want it to be halted because, like most Conservative policies, the minute we scratch beneath the surface we see the harsh truth. What has gone wrong here? There is a minimum 42-day wait for the first payment, which we have heard umpteen folk talk about, but I do not think the Chamber appreciates the reality of what that means. It means the most vulnerable are being left for six weeks with absolutely nothing.
Angela Crawley
My South Lanarkshire constituency was one of the first in Scotland to see the roll-out of universal credit, and I have witnessed my constituents relying on food banks as they wait up to 12 weeks for their universal credit payment. Does my hon. Friend agree that the policy is clearly not working in practice? Will she invite the Minister to visit my constituency and see how his policy is actually working, because it is a disaster?
Mhairi Black
I thank my hon. Friend for raising that point because I want to say to Conservative Members that none of us is lying about our experiences. We are not making things up. We are coming to the House with genuine problems that the Government are failing to address.
DWP figures show that around one in four new claimants waits longer than six weeks to be paid—a 25% failure rate: staggeringly alarming given that universal credit is still in its early days. Benefit delays remain a primary reason for the increase in the use of food banks. Citizens Advice has found that, from 52,000 cases, those on universal credit appear to have, on average, less than £4 a month left to pay all their creditors after they have paid essential living costs.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Will my hon. Friend give way?
Mhairi Black
I will keep going.
To progress with the roll-out of universal credit as it stands is callous at worst and arrogantly idiotic at best. We have heard multiple times that people can now apply for an advance payment, but the fact is that those advance payments are nothing more than a loan that has to be paid back at a later date. Simply changing the terms of that loan does nothing about the litany of systemic failures throughout the entire process. All it is doing is creating more of a burden on claimants and forcing people to deal with a problem that is not their fault in the first place.
The Government are almost starting to behave like some kind of pious loan shark, except instead of coming through people’s front door, they are coming after their mental health, their physical wellbeing, their stability and their sense of security. That is the experience of all our constituents.
This debate got me thinking about how all this has coincided with seven years of cuts and failures. The Government have failed to rebalance our economy, and they have failed to reach their own fiscal targets. We are not dealing with the national debt; we are simply shifting it on to vulnerable households. We have the worst decade of wage growth in 210 years. To put it in context, that is the length of time since the Napoleonic wars—that is how bad it is just now.
Scratch beneath the surface and we see that things are not as they appear. All we get is clichés about being strong and stable—scratch beneath it, and it is nothing like the truth. We are told that all these cuts are fine because we are introducing a national living wage—scratch beneath the surface, and it is a total lie because the national living wage is 95p below the real living wage.
I have sat in the Chamber and heard over and over again from Tory MPs that the social security reforms have been put in place to incentivise work. That is fair enough, but the Government cannot even incentivise their own Scottish Tory MPs to turn up and miss a football game in Barcelona—don’t dare talk about incentivising. I have heard the Government use that argument time and time again to justify their choosing to keep slashing money for the poor. The argument is used to justify the two-child policy and their sickening rape clause. [Interruption.] Conservative Members should listen for a wee second. I have heard it used to justify the sanctions regime while I have stood in this very Chamber and implored the Government to make it more humane—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The hon. Lady will be heard.
Mhairi Black
Thank you, Madam Deputy Speaker. As I have a wee bit of silence, let me take this opportunity to say as loudly and as clearly as possible to everybody in here: plunging people into debt does not incentivise work; forcing people into hunger does not incentivise work; causing anxiety and distress, and even evicting some families from their homes, does not incentivise work. Now the good news is that every single person sitting in this Chamber has the power to change this tonight, so listen to us—like I said, we are not making this up. I tell you something: this Government have absolutely no excuse for pushing ahead with this reform after today—halt it and halt it now.
Luke Hall (Thornbury and Yate) (Con)
I am grateful to have a chance to speak in a debate that has had well-informed contributions from Members on both sides of the House. Rather than going over all the arguments we have heard so far, I want to talk about a couple of personal examples I encountered in my previous career in retail, which show why this reform is so important in creating a system where it does pay to work. Retail is an industry where there are inflexible working hours and unpredictable amounts of overtime are often available; it is often dependent on the demand for the products in the store and so on.
Let me give a couple of examples that I saw during my time as a store manager in Lidl in my constituency: almost 10 years. As happens in many discount retailers, we often worked with a skeleton crew in the store—often as few as 12 members of staff. In such a situation, if one or two staff are limited to working 16 hours, it has a big knock-on impact. It does not just affect the individual who struggles to work the overtime, even though they want to; it has knock-on impacts for the business and means salaried employees, who might not be paid any overtime, still have to work late into the night because of the reduced flexibility that the current system offers. That is clearly not what it was designed to do, but it is one unintended detrimental consequence for the business and other employees.
I wish to make one other point about the unintended consequence of the current system for people who want to work more than 16 hours but are prevented from doing so. What they often do in these situations is end up hiding the hours that they work, through moving around holiday pay in the payroll system and even, as happens much more regularly than we might think, through store managers agreeing to pay other employees in the store; the money is received into their bank account and they then pay their friend, who can actually work the overtime but refrains from doing so because of the 16-hour limit. Another point to make on that is that the people who end up willing to be part of those trades are younger and often get paid by the retail business at a lower wage because of that. They therefore end up passing across the lower wage to the person who would work or lose out on money themselves because they transfer across to somebody else from the post-tax income.
One other point about the UC system is that because it offers support to people through the work coach system, it helps a lot of people in industries such as retail who are under-confident about the progress they can make in that role. When I started as a shelf stacker in Lidl at 18, I was lucky enough to have parents who pushed me to keep progressing through the ranks. A lot of people who are under-confident and do not have that support do not get that sort of help and encouragement to step up through the business. Often we get people who are reliable employees—
Neil Coyle
I am struggling to follow the point, because one of the biggest challenges of UC is that those with fluctuating incomes struggle to get a consistent payment in order to pay their arrears. Although the hon. Gentleman may have been successful in retail, he is going to struggle to sell this particular turkey to employees in my constituency.
Luke Hall
As I say, my experience for many years has been of a hugely detrimental experience for people who try to work over the 16 hours if they are pushed to do so. So I do not accept the point, because I think the work coaches genuinely help people with their confidence in order to move forward. I have seen real-life experiences of that in Tesco and Aldi in my constituency, where I have spoken to employees who receive that sort of support.
In the short time I have left, I should say that I am encouraged by the Secretary of State’s announcement of the cancellation of the helpline fees. That is surely a simple and right change to make so that people on low incomes who are struggling to find work do not have to pay those charges. I am pleased by the Secretary of State’s assurance that we will not move faster than we should, in order to be sure that the system can take into account any difficulties in moving forward. I look forward to supporting a system that is helping people to move into work faster and to stay in work for longer. Universal credit is helping more people to move into work.
Grahame Morris (Easington) (Lab)
I am pleased to be able to speak in this debate on a matter of some concern to me, because today universal credit is being rolled out in the Easington constituency; mine is one of 45 areas throughout the country in which universal credit is being rolled out this month. Like the hon. Member for Paisley and Renfrewshire South (Mhairi Black), I just cannot stand by and listen to some of the comments from Government Members, who speak as if this is an incidental, unimportant and dispassionate matter.
Some Conservative Members imply that there is no hardship or deprivation; they should walk a week in my shoes and come to Horden, to Easington and to the food banks. [Interruption.] Have Conservative Members seen “I, Daniel Blake”? If they have never lived it, it is instructive to try to understand what “digital by default” means. I heard a former Minister, the right hon. Member for Forest of Dean (Mr Harper), say what a wonderful thing digital by default is to incentivise people and prepare them for work, because many job applications have to be made online. That is absolutely true of job applications, but the fundamental difference with universal credit is that in order to remain live, the application has to be updated daily using a smartphone or a PC. Many of my constituents do not have access to PCs and smartphones. Many of them come to my office begging for food vouchers, and I am allowed to give only three. It is heartbreaking. They have to choose between heating and eating.
How are they supposed to access computers? We have two large centres in the constituency with libraries. Those on the Government Benches are MPs—probably millionaires with comfortable lifestyles—but they do not understand the everyday trials and tribulations of ordinary working people. That is the problem.
Matt Warman (Boston and Skegness) (Con)
I represent a deprived coastal constituency. I must say, both personally and on behalf of many of my colleagues on the Government Benches, that the idea that we do not listen to our constituents or see the experiences that the hon. Gentleman sees, and the idea that he has a monopoly on compassion, is profoundly offensive.
Grahame Morris
The problem is Government Members’ lack of understanding. The Opposition are calmly and rationally putting forward a solution to pause and fix the problem with the roll-out.
Angela Crawley
Does the hon. Gentleman remember the former Secretary of State, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), saying that he could afford to live on benefits of however much per week? Does the hon. Gentleman reckon that anyone on the Government Benches would be able to live on thin air for the next six to 12 weeks while universal credit is rolled out?
Grahame Morris
I do recall those remarks, and I do not think it is possible. It would be incredibly instructive if Government Members actually lived on benefits and experienced what it is like.
Dr Whitford
Does the hon. Gentleman share my concern, which I am sure is the concern of many Members present who are due to face roll-out in November, or towards the end of November, that we might end up with constituents with no money for food or heating over Christmas and winter?
Grahame Morris
That is precisely the point that I am trying to make. I am afraid that the heat of the moment has tempted me away from the three things that I wanted to say.
As currently constituted, this system will penalise the poor and do nothing to resolve the underlying issues of low pay, housing costs and insecure employment. In my constituency, the Walkers crisp factory is closing down a month before Christmas. One Member on the Conservative Benches said that fewer than 300 people were unemployed in her constituency. I have more than 300 unemployed people from one factory closure.
The East Durham Trust, which is a tremendous initiative in my constituency, is making up food parcels because the Trussell Trust cannot keep up with demand. It is currently raising money to cook food, because some poor people do not have access to cooking facilities. I want to encourage all the good people—not just those on the Opposition Benches and in my area, but on the Government Benches—to donate to such organisations. The East Durham Trust is trying to raise the modest sum of £10,000, which will be matched by Comic Relief. I was at its 10th anniversary event, celebrating the achievements of the community and voluntary sector.
This terrific event was addressed by the chief executive of the East Durham Trust, Malcom Fallow. He spoke to me about a young boy who was attending the community barbecue, which was trying to feed some of the most deprived and vulnerable families in the community of Peterlee in my constituency. He said that the young boy put a burger in his pocket. When he was challenged about it, he said that he was taking it home to feed his hungry sister. That is an indictment in 2017. It is shameful and it should shame this House. It shames me that, in this great country of ours in 2017, children are going hungry because of a flawed benefit system. It is a system that can be fixed, and we have an opportunity to do that tonight.
Communities such as mine are being forced to create their own food banks to feed their neighbours because the current benefit system—I might say the personal independence payment system as well—is not working. I commend the work of the East Durham Trust; it is a fantastic organisation. However, if this Government showed some compassion and reviewed the system, such organisations may not be so necessary.
Jo Churchill (Bury St Edmunds) (Con)
Like the hon. Member for Easington (Grahame Morris), I too have universal credit rolling out in the main town of my constituency. I do not consider that incidental or insignificant, and I am very saddened by some of the comments that have come from those on the Opposition Benches.
I recognise the significance of the roll-out of universal credit, which has gone live today in Bury St Edmunds, with the Stowmarket area in my constituency following in February. To that end, I have been engaging with the DWP, the local authority, housing agencies, charities and others. As the system rolls out, we must ensure that that close working continues. For example, I know that recently there has been a spike in food bank use locally, which is helpful to know. As we go forward, the success of people’s lives is absolutely the responsibility of every one of us in this place.
As for universal credit itself, I welcome the simplification and streamlining of a complicated and frustrating system and the fact that it encourages people back into work. It is welcomed by staff on the frontline and by charities that I have met.
Dr David Drew (Stroud) (Lab/Co-op)
So far, everyone has talked about getting people into work, but there is a group of people who are in work—the self-employed. One problem with universal credit is that because of their housing problems those people often end up needing support in that principal area. There is some evidence that the self-employed are particularly badly affected by universal credit. Would it not be worthwhile to look at that aspect in particular and to delay the roll-out?
Jo Churchill
I thank the hon. Gentleman for his intervention, but if he will bear with me I will come on to the areas that I have concerns about.
The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) was talking on this topic on the “Today” programme, and, interestingly, did not offer any concrete reasons why the scheme should be paused; nor has she done so during this debate. This is an agile system and we are learning. It was first rolled out in Lowestoft in Suffolk, and my hon. Friend the Member for Waveney (Peter Aldous) indicated the problems. I have spoken to the DWP leads to ensure that we understand those problems and that we are looking at concrete solutions. The system has to be fair to claimants and taxpayers. Indeed, some claimants are taxpayers. It will always offer challenges, and there is always a case to improve and ask how the system can be made better.
I represent an area where the average wage is below the national average. It is important to understand that the people I meet in my surgeries are not well off and we need to take time to understand their individual circumstances. Although the number of people who are unemployed in my constituency is comparatively low figure 645, those are 645 people whom my everyday work aims to get into employment. That is why I also talk to employers in the engagement groups to which I reach out.
Of the individuals out of work, about 20% struggle to manage their finances for a multitude of reasons, so being simplistic about the problem does no one any favours. For instance, it is likely that single parents are a group with specific needs, and I have spoken to somebody in the police force who is worried about people with addictions. Are the work support coaches allowed to advocate for the payments of rents in difficult circumstances? I also draw people’s attention to the fact that they will get help filling in paper forms, particularly if they have problems using a computer. There were enormous problems in 2003 when tax credits were rolled out. Universal credit is being steadily rolled out—we are only approaching 10% roll-out. We need to work with the system, rather than against it.
I would like the Minister to talk about the portal for trusted partners. I spoke to my local housing association yesterday and it is not yet able to get to it. It is important that housing associations do have access in order to ameliorate some of the problems around rent arrears that we have discussed.
I am keen to see partnership working and a timeline for the trusted partners portal. I am also keen to ensure that we support the most vulnerable people, who we know need that support. Where direct rent payments are needed, we must ensure that they are made speedily with advance payments and all the other support we can give. We need real-time data that show improvements, so that we can show we have a supportive welfare system, not a chaotic one. That is what we are about.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
There are still approximately 60 Members who wish to speak in this debate, so I shall reduce the time limit to three minutes after the next speaker. Do bear in mind that every intervention means that somebody else is less likely to speak, as it adds time to a speech.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
This debate is as vital as it is urgent, on something that has deeply affected my constituency and continues to do so. Since the full roll-out of universal credit across all three jobcentres in Newcastle in March this year, it has possibly doubled the work of my caseworkers and other local agencies. Since its introduction, it has been nothing short of a shambles. To roll it out any further, without dealing with some of its fundamental failures, will just roll out misery for thousands more people. It simply is not working, and in the short time I have I will set out as clearly as possible exactly why.
The deliberate delay in payments built into the system is fundamentally flawed. That does not even include the extra delay due to administrative errors. The Government’s figures show that one in five payments is not made on time. I am talking about the very deliberate six to seven-week wait for the first payment. Who, of those just-about-managing people the Prime Minister claims to want to help, could manage for seven weeks without any income? Who, in work, waits six or seven weeks for their first pay packet? The Government are not being straight with people. They are pushing people into spiralling debt and misery that they will take years to manage their way out of, if they ever do. The advance payments—otherwise known as crisis loans—do nothing to resolve that fundamental flaw.
What do the Government have to say about the rent arrears being accrued? Your Homes Newcastle, the arm’s-length management organisation responsible for Newcastle’s council housing, faces rent arrears of £1.2 million entirely as a result of the roll-out of universal credit, and it is not an outlier. Changing Lives, a supported housing provider in the north-east, states that 100% of its clients on universal credit are now in rent arrears. Is that really the Government’s intention?
Digital by default is proving to be disastrous. It assumes that everyone has easy internet access and is computer literate, which clearly is not the case for many people. Constituents are finding it difficult to make their daily updates, to verify their claims and to post activity on their web activity report, which is necessary to stop their claim being suspended—never mind getting hold of a human being to help when the system goes wrong.
Even when my constituents follow the correct procedures, documentation provided to the DWP at constituents’ cost is being lost or even destroyed. When constituents or my caseworkers contact the DWP to ask quite straightforward questions, the staff do not know the system themselves. How can constituents be expected to navigate the system when staff do not have the correct training and support to assist people who are having difficulties? Let me be clear: this is not the fault of the hard-working staff at jobcentres and the DWP; the blame lies fairly and squarely with the Government, who have their head buried in the sand.
I am pleased that my constituents will no longer be charged 55p per minute to access much needed support, but that change barely scratches the surface of the problems with the system. The crux of the issue is that the Government should be utilising the painful lessons learned by areas such as Newcastle, where the full roll-out of universal credit has been piloted, to ensure that the myriad problems that have arisen are rectified before they roll it out any further. It is causing real hardship and distress.
We are not asking for the system to be scrapped. We are asking for it to be paused, so that the Government can get this complex system right before they roll out further misery, debt and hardship up and down the land.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I rise to voice my support for the planned roll-out of universal credit. Universal credit improves lives. It frees people from the benefits trap and empowers them to get back into work. That is supported by evidence. The “Universal Credit at Work” report shows that 71% of people claiming universal credit found work within the first nine months of their claim—a rate that is 8% higher than that of the comparable jobseeker’s allowance claimants. More recent research echoes those findings, with the latest independent research commissioned by the DWP showing that people claiming universal credit on the live service were 3 percentage points more likely to be in work after three months than those claiming JSA, and 4 percentage points more likely to be in work six months after starting their claim. Those percentage differences may sound small, but they are not in the least insignificant. We are talking about many thousands of lives improved by this policy. The independent research paper describes this as a
“sizeable impact for a policy of this nature.”
Nobody in this House is denying that there are issues with the system, which must be expected with so large a reform that affects so many people. That is why it was heartening this morning in the Work and Pensions Committee to hear the Secretary of State announce that DWP helplines will all be freephone numbers by the end of this year. We also had assurances from the Secretary of State, first at the Conservative party conference and again this morning in Committee, that more will be done to advertise advance payments and that guidance has been issued to DWP work coaches, who are now proactively offering advance payments to claimants.
Although I am sure Members would join me in expressing slight concern about the amount and quality of data being gathered on advance payments, I believe that today the Secretary of State has proved that he and the Department hear the concerns voiced by many Members of this House, organisations and members of the public, and that they are prepared to act on them. However, that does not mean that we should in any way pause the roll-out. It is much better that the Government proceed cautiously, with a test and learn mentality—learning and improving as we expand universal credit, refining it as we go along cautiously and steadily. That is the correct approach.
I am not going to criticise any Member of this House or any party for raising concerns about such a massive change to the benefits system, whether on mental health issues, waiting times, or digital literacy. They are, as they have done this afternoon, reflecting their genuine concerns and those of their constituents, and that is what we are all here to do. However, some of the more intemperate contributions to the debate, not necessarily here today but elsewhere and at other times, have erred on the side of scaremongering, which is less than constructive and does not help our constituents in any way. This debate is not about that, however. In my opinion, we must press ahead with the roll-out as it is.
Anna McMorrin (Cardiff North) (Lab)
It is obvious once again that this Government care more about saving face than serving the people of this country. This Conservative Government say that they are improving the lives of working people and getting people back into work, yet they are ignoring pleas from across this Chamber and the country to halt the roll-out of this shambolic universal credit system. We are being told that people should “get up, work hard and get on in life”, but these are hard-working people—families and their children—bearing the brunt of many years of Tory economic failure and austerity cuts.
Anna McMorrin
No, I will not give way.
The reality is that this accelerated and aggressive roll-out will see an increase in debt, rental arrears, food bank usage, and homelessness—people struggling to make ends meet, with real-life consequences. I know of one family who have had their two children taken into care because they were forced to move into a tent in a park after being evicted when their housing benefit was not paid on time. These children were taken away from their parents not because they were not loved, not because they were not cared for, but because this Government failed them.
It is clear that the current universal credit process is not fit for purpose. It is due to be rolled out in my constituency early in the new year, and I am already getting many people coming to me truly scared about how this is going to affect them. We are seeing an increase in homelessness in Cardiff, especially among young people, with an 18% increase in the past year.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Will the hon. Lady give way?
Anna McMorrin
No, I will not give way.
We are also seeing 475 needless deaths every year across Wales alone because vulnerable people are unable to afford to heat their homes. Homelessness and fuel poverty are set to get worse under this system. We have a Welsh Labour Government tackling it, but their arms are tied behind their backs with this roll-out of universal credit.
I am deeply concerned about the effect that this will have on single-parent families, who make up one in eight households, with significant hardship through delays, errors, fluctuating payments, and payments in arrears. At a time when child poverty in single- parent families is forecast to sharply increase, this system must be fixed. Do not let homeless, evictions, debts and misery pile up. Do not allow destitution to get worse in the 21st century. The Secretary of State says that he wants to test and improve the system; he should listen to the overwhelming evidence and halt this.
Lee Rowley (North East Derbyshire) (Con)
Thank you, Madam Deputy Speaker, for the opportunity to contribute to this important debate.
As is the case for the hon. Member for Cardiff North (Anna McMorrin), universal credit is coming to my area in Derbyshire shortly. It will be rolled out to about a quarter of my constituency next month, and according to the current time lines there will be a further roll-out next year. Also like the hon. Lady, I am getting a number of people coming to me concerned about universal credit. However, what concerns me is some of the language used by Labour Members, and their scaremongering. It would be better if the hon. Lady did what Conservative Members are trying to do—assuaging people’s concerns, showing them the opportunities, and showing them all the things that have been put in place to make sure that these roll-outs can be done carefully and considerately.
I came here today with an open mind. I have been in the debate since the beginning. I listened to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) as she gave a very heartfelt and measured speech, unlike the Leader of the Opposition earlier in the day. Unfortunately, I am confused about what the Opposition seek to achieve. Yesterday, we were talking about pausing and fixing, but today we are talking about pausing. I have been listening to the Opposition expressing cursory agreement with the principles of universal credit, before launching straight into speeches that completely undermined those principles. The principle that people should have the skills to enable them to get on in the workplace by accessing jobs online was immediately undermined by the speech from the Opposition Front-Bench spokesperson. She agreed with the argument that we need to ensure that people are prepared for the workplace but rejected the notion that because 70% of workers are paid monthly, we should encourage people to budget on a monthly basis.
I do not agree with many of the Opposition’s arguments, but if Opposition Members are genuine in their wish to convince Conservative Members about those arguments, as I believe many of them are, perhaps the Opposition spokesperson should not seek to undermine the entire principle of universal credit. What she suggests is not a pause, but a delay. Ultimately, the Opposition seek to undermine the system in its entirety—from beginning to end.
I accept that there have been challenges, and I am heartened to hear from Conservative Members about how those challenges have been partially fixed. When universal credit comes to my area, I will be watching it like a hawk, along with my local citizens’ advice bureau, and if there are problems, I will be the first person on the line to the Minister. There are challenges, and this is a test and learn process, but ultimately we have a choice between continuing with a system that will improve things for people, or sticking with the problems that we have today.
Thelma Walker (Colne Valley) (Lab)
What is happening to our country is something of which this Government should be ashamed. This is a country where families cannot feed their children, where people are reliant on the generosity of others and where disabled people face being thrown out on to the streets. We have a Government who do not seem to care, and who continue to push on with their plans regardless. The universal credit roll-out has been a disaster, and it must be halted to make sure the Government get it right. We are not talking about policy or austerity; we are talking about people’s survival.
I would like to talk about the impact of universal credit on single parents and families. Research from the Gingerbread charity shows that at the last count in June 2017, single parents made up one in eight households receiving universal credit. Once it is fully rolled out, nearly all the UK’s almost 2 million single-parent families will be eligible to receive universal credit. Are we really saying that it is okay for delays in payments, fluctuating payments and administrative errors to cause families to be evicted? That is what families are facing with the disaster that is the roll-out of universal credit.
Councils and housing associations may have shown some leniency over mistakes, but private landlords, in many cases, have not. Two fifths of single-parent families live in privately rented accommodation, so something needs to change. There are 3,411 single-parent families in my constituency. With nearly a third of single parent families already in debt, it is time the Government supported struggling families rather than continuing with the roll-out.
I turn my attention to a different part of our society that is being deeply hurt by this failed roll-out: our disabled constituents. They often have less disposable income, and they are being hit unfairly hard by this scheme. Evidence from Scope, the disabled charity, shows that a household with a disabled person in it is twice as likely to be in debt as a household without a disabled person.
We need to take a long hard look at ourselves, as a country. We should be a country that makes its systems work for those most in need. We should be a country that supports our vulnerable people. We should be a country that works for the many, not the few.
Richard Graham (Gloucester) (Con)
We have all known the reason for universal credit for a long time, and the day when no employee needs to offer 16 hours of work to anyone will be the day when universal credit has done its job. The reason for this debate, however, is much less clear. I suspect that the changing nature of the motion reflects two problems. The first is that some Opposition Members do not want to fix universal credit, but to destroy it and go back to an earlier world of throwing more money at welfare. The second is that some of them know they cannot fix it, because their own record on tax credits—their big attempt at welfare reform—was an absolute disaster, for which we are still paying in HMRC’s annual accounts.
We have heard Opposition Members make a series of remarks that are worth repeating: that this is a “disaster about to unfold”; that it shows a “total lack of understanding”; that their constituents have been “driven into destitution”; that it is “a shambles”; and that they are “not making things up”. Let me share with everyone, but especially with Labour Members, exactly who has been making up what. One week ago, the Leader of the Opposition stood up in Prime Minister’s questions and, to bring alive his belief that universal credit is a shambles, said:
“Gloucester City Homes has evicted one in eight of all of its tenants”.—[Official Report, 11 October 2017; Vol. 629, c. 324.]
That would mean that 650 of my constituents had been evicted over the past year. The actual figure is eight, seven of whom had such large debt arrears before they went on to universal credit that they would have been evicted anyway.
Let me also share with Opposition Members that those figures—eight people evicted during the past year—are a quarter of the number that Gloucester City Homes, when it was the city council housing department, used to evict, on average, every year during the 13 years of the Labour Government. That was without any complaint being made in the House by two Labour MPs or the current Leader of the Opposition, who was here for all that time. The hon. Member for Easington (Grahame Morris) said that Government Members do not understand what is happening in our constituencies, but I know what is happening in mine, and I do not need the Leader of the Opposition to tell me; and when it comes to making things up, he should stop scaremongering and get his facts right.
Let me turn to the Government, because this policy is incredibly important. It is our philosophy and our project, and we must get it right, and there are things we could all do to help make that happen. In the time remaining—perhaps someone would like to intervene—let me quickly run through those things.
Lady Hermon
That is enormously kind, thoughtful and generous of the hon. Gentleman.
Lady Hermon
No, it was very generous, indeed. Given that the hon. Gentleman and the hon. Member for North East Derbyshire (Lee Rowley) said that almost everything is hunky-dory with the roll-out of universal credit, would he and his colleagues not be astonished if the Government did not push this to a vote? The tweeting going on suggests that the Government are going to abstain, but would he not like to have an opportunity to vote?
Richard Graham
I agree with so much of what the hon. Lady says—I love her constituency—but rather than respond to that point, let me highlight what we can all do to make sure that this is a success.
First, the moment when the landlords portal opens and our housing associations become trusted partners will be absolutely crucial, and we need to know when it is going to happen for which housing associations. Secondly, I believe that if we have a main housing association in our constituency, it needs to have somebody inside the jobcentre and working with it when people move on to universal credit. Thirdly, we need to know how many of our constituents moving on to UC are getting advances. We know the national figure, but we do not know the figure for our constituencies. Fourthly, we need to know when the citizens advice bureau is alerted to a problem by a constituent. I have an escalation protocol with my CAB, and I recommend that to everyone, because it is very important for us to know about such problems as soon as possible. The next thing we need to know—
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Thank you, Madam Deputy Speaker, for calling me to speak in today’s important debate.
I know that many Members on both sides of the House share my concerns, but they are also shared by many outside this House. They are shared by organisations at the forefront of supporting people through difficult periods and supporting the most vulnerable in our society, such as Community Housing Cymru, Citizens Advice, Shelter, the Child Poverty Action Group and the Trussell Trust—to name but a few.
Those organisations know at first hand how a system is meant to work and when something is not working, because they are generally the ones picking up the pieces when people’s lives are turned upside down by debt and anxiety, caused at this time by problems with the roll-out of universal credit.
We have heard and will continue to hear throughout the debate evidence that the roll-out causes significant hardship and undue stress. The Government must listen to the genuine concerns from across the country to prevent further hardship. Those concerns do not constitute negativity and scaremongering, as some Conservative Members suggest, but reflect reality.
Clearly, the first thing that needs reconsideration is the six-week waiting period. In most circumstances, people do not have savings or money set aside to cover day-to-day living expenses during that time. Advance payments are not a solution for claimants who cannot wait a minimum of six weeks for their first payment, as they cover only part of the claim and must be repaid through a deduction from future payments. In most circumstances, an advance payment will not cover the costs of a tenant’s rent, leading to arrears, claimants needing to use food banks, and to increasing debt and poverty.
I understand from some housing providers that they often receive conflicting messages from DWP staff while those staff are gaining the full knowledge and skills to administer the new system. A pause and period of reflection would allow the Government to address issues with the helpline, and offer training and support to DWP staff to ensure consistency of information for both tenant and landlord.
With the proposed roll-out being accelerated significantly from this month, it stands to reason that the problems identified so far will be magnified, leading to thousands of families facing an uncertain time in the run-up to Christmas and well into the new year. If the system is creaking now, rolling out at the proposed pace will make matters a lot worse.
In my view and that of many colleagues in this place and outside, the Government need urgently to reconsider the roll-out to address the very real concerns, undue hardship and anxiety that the policy is causing and look at how it can be improved.
Jeremy Quin (Horsham) (Con)
I hope that the Minister and my other hon. Friends will bear with me if I quote the National Audit Office’s withering analysis of Government failure:
“the systems do not work as intended, causing problems for claimants, employers and the Department… there were serious problems with system performance… which affected stability; speed; and availability.”
The roll-out caused massive payment problems and huge knock-on impacts throughout the system. The NAO’s words were an indictment of colossal failure. My hon. Friends on the Treasury Bench will be relieved to hear that the report was written in 2003, when the introduction of the tax credit regime by the Labour Administration gave us a perfect example of how not to do it.
I support this Administration’s purposeful roll-out of universal credit, which allows time to test, learn and rectify. No one can genuinely accuse the Government of rushing headlong into a scheme that is taking a decade to roll out.
When I speak to people in my local Jobcentre Plus, I hear genuine enthusiasm for universal credit, and recognition that the agile system is improving with every roll-out and becoming more user-friendly.
Let us not forget the complaints from hon. Members of all parties about the clunkiness and adverse consequences—still much in evidence around the country—of the former system. Let us not forget its complexities, with three different providers and six different benefits; the 16-hour rule; the lack of flexibility when people start what may be a short-term job, but could prove a valuable stepping stone to a long-term career.
At its most basic, universal credit helps individuals into work, allowing them to keep more of the income that they earn. Those on UC are more likely to enter the workplace within six months than their peers with the same qualifications and characteristics on JSA. Universal credit is about not just getting people into work, but what happens when they are there.
I pay tribute to the shadow Secretary of State for remaining here throughout the debate. She quoted from a report by the Select Committee on Work and Pensions. However, she did not choose to quote from its report on in-work progression, which made it clear that universal credit has
“the potential to be the most significant welfare reform since 1948… It promises to break the cycle of people stuck in low pay, low prospects employment.”
All that is not to say that the system is perfect. Of course, there will be issues, some heartrending, that need to be resolved. However, that is true of every benefits system, and certainly true of the predecessor that universal credit replaces. The difference is that universal credit, as well as being right in principle, has proved itself adaptable and responsive: 50% of new claimants securing advances; the new landlord portal referred to by my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith); and the consistent improvement in the time it takes to make payments. They are all examples of how the system is adapting. It is a system worth working with.
Tonia Antoniazzi (Gower) (Lab)
I know I have not been here for long, but I am having difficulty believing my ears when I hear some of the stories from my hon. Friends who have already had this system rolled out in their constituencies. I am astounded by what I hear from some on the Government Benches and appalled when they say it is those of us on the Opposition Benches who are scaremongering. It leaves me to genuinely wonder what colour the sky is in their world. But I stand here thankful to represent my constituents, and to stand up for a better Gower and a better Wales for our children to grow up in.
I took a bit of a bashing on Twitter this week, because I said the Government had shown a lack of empathy when it came to universal credit. As a former teacher, I love to learn and I am happy to be proved wrong, so I call on the Government to show empathy now. This is a chance for the Government to show that they have listened to the serious concerns that many Members have raised today. I hope they will show empathy, so that my constituents, who will have universal credit rolled out just before Christmas, will not have this hanging over their heads during the holidays. Who will my constituents turn to when they need to apply for their “loan” and the offices that provide support are closed? How will the DWP staff cope in that short period of time with such requests in addition to their normal duties?
I already have working people coming to my constituency office helpless and looking for a referral to the food bank to feed their children. What will it be like at Christmas when council figures estimate that people in work in Swansea will be £42 a week worse off? All I ask is that the Government show some empathy to the parents who need to juggle childcare and work as they try to provide the best they can for their children and families. Show empathy and give a more compassionate start date to the roll-out of universal credit in Gower and Swansea.
All the evidence shows that the roll-out of universal credit will see in-work poverty soar. There is a wealth of evidence from across the country that where universal credit has been introduced evictions are up, the use of food banks is up and the number of people in in-work poverty is up. Significant changes are needed. I wholeheartedly agree with the hon. Member for Paisley and Renfrewshire South (Mhairi Black). She is right when she says that those of us on the Opposition Benches—see how many of us are here—are not making it up. The Government need to consider a pause.
Alex Burghart (Brentwood and Ongar) (Con)
I am grateful for the opportunity to speak in this debate, Madam Deputy Speaker.
I have been following the progress of universal credit since its inception about 10 years ago. The shadow Secretary of State asked, at the start of her remarks, how did we get here? How did we get to a place where there is a new benefit system on the table whose principles are agreed by most in this House? Those principles have been agreed because they make sense and because the welfare system we inherited was a disaster. It has been a disaster since its birth in 2003: it cost £1.9 billion in errors, left hundreds of thousands of people with too little money and created a system that paid people not to take work. It left people worse off if they took on more work. We saw a taper rate that left only 4p in the pound when some people worked more than 16 hours a week. This was and is a benefit system that spends tens of billions of pounds to discourage people from working more hours. It is a disgrace and it needs to be replaced.
From those key mistakes, universal credit has learnt how to roll out a benefit and what sort of benefit to build. The sort of benefit to build is one that encourages people to move into work and to take on more work when they do; and one that has a taper rate that leaves people not with 4p in the pound, but 37p. It is a system that has learned from its predecessor. In particular, an important lesson has been learned about how to introduce a big new benefit. There is no big bang in the system. This is a “test and learn” process. As my right hon. Friend the Secretary of State said, we are moving from 8% roll-out to 10% roll-out at the start of next year, meaning that the system is evolving all the time. We are seeing its evolution before our eyes. We saw it today with the change to the phone lines. We have seen it with the advance payments system and the eligibility criteria for people to get their payments paid directly to landlords. Those are all improvements.
Hon. Members must understand, however, that we cannot have a “test and learn” environment if we are not testing. We have before us an opportunity to roll out a system slowly and get it right. Opposition Members want a pause. There has just been a pause in the summer—no new jobcentres were taken on in August and September—and there will be another pause in January. The pauses are built into the system already, and the system is using them as opportunities to develop. Labour introduced a benefit in 2003 that was a mess, and it introduced it badly, and now it is trying to make a mess of its successor.
Sammy Wilson (East Antrim) (DUP)
I am surprised by the intensity of the controversy that has crept into this debate. The Labour party and the Scottish nationalists say they support the principles behind universal credit—that will have implications for how it operates—and the Liberal Democrats actually helped to introduce it, yet we have this degree of controversy. Of course, we have heard hard stories today, but let us be clear: the existing system produces hard stories. In my constituency, every time there is a “take up of benefit” campaign, we find that people are losing out on millions of pounds of benefits because the system is so complicated. A new system that helps to reduce that complexity is bound to help people in hardship.
Yasmin Qureshi (Bolton South East) (Lab)
I have been a constituency MP for the last seven years, and since the roll-out of universal credit, I have seen more people come to my advice surgeries with problems about getting their universal credit, and that includes people who are working.
Sammy Wilson
If we added up the number of people who come with tax credit and benefit problems and so on, I guarantee we would find the same level of dissatisfaction with the existing system.
I accept that there are problems with the new system, but we have to give some credit to the Government for listening. We have raised several issues in our discussions. There were the online difficulties, and we now have free telephone calls. There were difficulties with people not having money, and we now have greater access to early payments. There were difficulties with the learning processes, and the Secretary of State said twice today that he did not intend to rush the system so that he could test, learn and rectify.
Lady Hermon
Instead of praising the Government for what they have done today, the hon. Gentleman, I suggest, should turn his mind to the situation in Northern Ireland. We have no functioning Assembly or responsible Ministers to deal with any of the problems that will arise when universal credit is rolled out across Northern Ireland. May I urge him to give a commitment to the House that his party will get together with Sinn Féin, which makes such a song and dance about welfare reform, and restore the Assembly as a priority?
Sammy Wilson
I am surprised that the hon. Lady, as a Unionist, has not identified where the real problem lies in reforming the Government in Northern Ireland—with Sinn Féin. We are happy to enter government tomorrow with no preconditions to sort out these problems.
That brings me neatly to the point I want to make. When universal credit was first suggested—I was a member of the Executive at the time—we sat down and identified what we felt the issues would be. Even without a functioning Executive in Northern Ireland, changes have already been made in the system there which I believe will show that some of the difficulties that have been raised here today can be dealt with. For example, automatic direct payments to landlords are built into the system. I do not accept the argument that it is good to give tenants money for rent so that they can then pay it back. The money is not part of disposable income; it has to be used for a specific purpose, and therefore there is no reason why it cannot be paid directly. That is what will happen in Northern Ireland, and I suspect that we will not have the same level of rent arrears If that proves to be the case as universal credit is rolled out, I trust that the Minister will learn from it, and will rectify the system in the rest of the United Kingdom.
It was said earlier that 76% of people in the United Kingdom are now paid monthly, but those on low incomes are usually paid on a weekly or two-weekly basis. The first thing that many of my friends on low incomes do when they start a new job is ask for a sub in the first week, because they cannot manage otherwise. For that reason, I hope that what we have decided in Northern Ireland will eventually be replicated in Great Britain, and payments will be made on a two-weekly basis unless people ask to be paid monthly. We recognise that domestic violence is an issue, and that some people may be afraid to ask for the money, especially if they are caring for children. A split-payment system must therefore be considered.
If there is a vote this evening, we will abstain, not because we do not believe that there are problems, but because we believe that it is better to talk to the Government and look for solutions. Let me say this to Labour Members. They know that there are differences between us and the Government—and at times they try to exploit those differences—but we will not be used for the purpose of headline-grabbing defeats of Government flagship policies, rather than trying to find a way of resolving the issues that need to be addressed.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
It is the hallmark of a fair welfare system that it includes a strong and effective way of helping people who are out of work to find employment, and, by doing so, allows them to enjoy the dignity, confidence and self-reliance that comes with the ability to provide for themselves and their families. In that regard, we should never take the Government’s achievement since 2010 for granted. There are 3 million more people in work, unemployment in my constituency has halved, and our national unemployment rate is half that of the eurozone.
None of that happened by accident. It happened as a result of the hard work done by companies large and small, and as a result of carefully calibrated Government policy. That progress could—and, I believe, would—be undone in an instant were the shadow Chancellor ever to have an opportunity to unleash his programme of hundreds of billions of pounds of unfunded spending, and nationalisation with Parliament determining “fair compensation” for shareholders, all in the context of a crippling loss of investor confidence and a run on the pound. Despite the progress that we have seen, however, there is further to go, and that is precisely why I support universal credit. Its purpose is to deliver fundamental reform, and to replace a contradictory, and sometimes impossible, set of conflicting benefits with a single simplified payment.
The key question to ask about any policy is “What incentives does it create?” In the case of universal credit, the policy aligns the incentives so that work always pays. In my constituency, too many lives have been blighted for far too long by joblessness. I challenge Opposition Members to go to a ward such as Park End or Hemlington, and then tell me that it is wrong to end the perverse situation that we inherited whereby some people were losing £9 out of every extra £10 that they earned, which left them with virtually no incentive to work.
Ruth George (High Peak) (Lab)
What would the hon. Gentleman say to the nearly 7,000 families in his constituency who currently claim tax credit, and who, according to the Institute for Fiscal Studies, will be £2,500 a year worse off under universal credit?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am more than happy to allow interventions, but if Members who choose to intervene want to look a colleague in the eye when that colleague drops off the list of speakers, let them do so, because that is what is going to happen.
Mr Clarke
In answer to the question, I would tell them that—as I would defend to anybody—this Government are creating jobs and, through their changes to taxes and benefits, making life better.
The fact that I have been elected to serve my constituency shows that people in Middlesbrough South and East Cleveland see through what the Opposition are trying to do. They talk of a pause, but instead they are in effect asking for indefinite delay and the slow death of this policy. That is the reality of what we are seeing here. They talk a good game about supporting the principle, but in reality they oppose it. They should be more open with us and their constituents about that, because the legacy of the last Labour Government was shameful. The real moral outrage was the thousands of people who ended up being trapped on out-of-work benefits for the entire course of the last decade of Labour’s time in office, and it did nothing about it.
We are offering the solutions. We are listening and learning, and making changes—consider the advance payments, consider the alternative payment methods, consider the landlord portal. Ministers are listening. This system is capable of reform. No system is perfect; given the challenge we are confronting here, I do not believe any system could be perfect. The point is whether this system is capable of improvement, and it is. The Government are listening, and we should get behind them, make this work and stop scaring our constituents with stories which will cause many of them to lose sleep tonight, not to look for work.
Siobhain McDonagh (Mitcham and Morden) (Lab)
My mum was 94 yesterday. When she came to London in 1947 as a young woman, the cards in the windows said, “No blacks, no Irish, no dogs.” There are no cards in the windows in London any longer, but there is an understanding among landlords that they do not take people on universal credit, and they are beginning to evict their tenants who are on housing benefit.
I do not say that one system is perfect and the other is imperfect. I congratulate the Government on the changes they have made today. Those have, in part, come about because of the force of the Opposition, as is our job. The House is doing its job today: however rancorous or angry it becomes, it is doing its job and making improvements.
More needs to be done, however, and that is why we need a delay. We must not be in a position where nearly a third of families with children in London live in private rented accommodation and will be on a benefit, even if they are in work, for the rest of their lives to meet their private rent, and where the application will take six to eight weeks to be determined. In that time, they will receive a section 21 notice from their landlord, who will start the eviction process, deciding that these families, who are perfectly good tenants in every other way, are simply not worth the trouble. Given that on top of that there are plenty of families in London who can pay the enormous rents, there will always be an alternative.
I assure the House that I am not trying to frighten people or talk about things that do not happen. I recently went to a private landlords forum in my borough and none of them said they were prepared to let to people on universal credit, because they simply did not want to wait for their rent.
We have talked about other people helping people to get advance payments. At present, local authorities have an officer responsible for preventing homelessness. If I see somebody at my surgery who is behind with their housing benefit, I get on the phone and say, “Steve, will you go down to housing benefit and get the staff there to sort it, or else the landlord will have them out,” and he does that. We do not have something identical to that in this system at present, and on behalf of London and all private tenants on benefit I say: please stop it, look at it and do something about it.
Dr Sarah Wollaston (Totnes) (Con)
I support the principles behind universal credit. My question is this: why are we undermining a policy with the potential to change lives for the better by not addressing a fundamental flaw at its heart?
We have heard many compelling cases today, and we cannot ignore them. The hon. Member for Mitcham and Morden (Siobhain McDonagh) set out one of the flaws, but we have seen that a policy of test, learn and rectify can work. Today there have been universal congratulations for the Government on the introduction of a free helpline, and the bringing forward of access to advances has also improved the policy, but that does not get us away from the fundamental problem of a minimum six-week wait. That means that our constituents who are living on the edge—we are talking about real people’s lives here—are going to start this process in debt and in arrears, as we have heard.
It is possible to apply test, learn and rectify to this process. I want to hear from the Minister in the winding-up speech that Front Benchers recognise that and that they are going to address the six-week wait. The advance does not solve the issue; it does not cover the entire amount. Those of us who represent our constituents have a cushion and we would probably manage, but many of the people I used to look after when I was in clinical practice and the people I represent now who come to my constituency surgeries have no cushion whatever. This is devastating for them, and we cannot ignore the very real, compelling case histories that we have heard. We cannot allow those to continue.
There are things that we can do. Bringing forward the initial payment would mean that fewer people needed advances in the first place. That would save us a complicated bureaucracy, allowing people to say for themselves when they start universal credit, “Please would you pay my landlord direct, because I know I am going to find that complicated? Please would you give me payments every fortnight, because I don’t currently receive monthly payments?” Once they are established on the system, give them, with their advisers, the option to transfer to taking over their own monthly payments for their rent.
Heidi Allen (South Cambridgeshire) (Con)
Does my hon. Friend agree that that would be sensible not only from an administrative point of view, but because work coaches could be helping people get into work, rather than helping them to deal with debt, stress and mental health issues?
Dr Wollaston
I absolutely agree. I say to the Minister, please, can we hear an assurance at least that there is a recognition of this fundamental flaw and that it will be addressed?
I know that Members on this side of the House will be abstaining tonight. Personally, I do not agree with that. The House should have an opportunity to express its view, and there have been occasions on which these debates, even though they are advisory, have led to changes in policy. If there is no way for me to express my view, on behalf of my constituents, that I think this fundamental flaw must be addressed before the policy is rolled out to the Totnes constituency next year, I am afraid that I will have to vote against the Government. I do not wish to do that because I support the underlying policy of universal credit—we have heard about many of its benefits—but, I say again, we are undermining it by not addressing the fundamental flaw at its heart. I hope the Minister will give an assurance from the Dispatch Box so that I do not have to vote against the Government.
Laura Smith (Crewe and Nantwich) (Lab)
Today, I hope to give the House an insider’s look at what it can be like for a single parent relying on the benefit system. I became a single parent when my son, who is six, was 14 months old. I was working as a teacher and had no option but to drop my hours and apply for working tax credit. I experienced the process of benefit delay and went many weeks focusing on feeding my son meals while I survived off cereal.
During that difficult time, I felt the pressure of trying to manage my bills and make my rent commitments while always trying to remain a strong and capable parent for my child. I cannot stress enough how tough life can feel as a single parent. Not only are you dealing with the trauma of a failed relationship and the difficult process of everyone involved adjusting to the new circumstances, but many, like me, can find themselves in extreme financial difficulty where it is easy to become trapped in a spiral of debt and benefit uncertainty while juggling child care.
I find it heartbreaking to hear stories from my constituents, who come to me with similar problems due to universal credit. Take Sarah, for example. She was advised by the universal credit helpline to register that her relationship had ended and was assured that that would not close her claim. However, that advice was incorrect and her claim was closed, meaning that she had to go through the entire process again. Rent arrears then built up, and Sarah had to take out a loan to help her get through. Without the support of her family, she would have fallen apart—without the support of my family, I would have fallen apart. What about those people who do not have that support? With around a third of single parents already in debt before the roll-out of universal credit, how can the Government justify a policy that threatens more financial insecurity?
Then we have the patronising insinuation from the Government Benches that getting people used to monthly pay to prepare them for work and the management of their own budgets is easily achievable. That is typical of the approach taken by a party that refuses to accept that its own ideology could possibly be flawed. Instead, it seeks to condition human behaviour so that people are nudged into acting rationally. Convinced that our society cannot be broken, the Conservatives preach from their positions of privilege about the need to change behaviours instead of attempting to make any meaningful change to the structures within our society that leave millions of people impoverished, but leave their own people richer than ever.
Kirstene Hair (Angus) (Con)
It is incredibly important to highlight the common ground when discussing how we ensure that as many people as possible are able to get into work. Let me be clear: there is absolutely nothing fair about keeping people dependent on welfare. I will start with two quotations:
“Universal Credit remains the right thing to do… and the prospect of an integrated benefit system that responds to people’s changing circumstances is a prize worth having.”
Universal credit is
“an important tool for tackling poverty”.
Those are not my words, but those of the Joseph Rowntree Foundation from April this year. In Scotland, the current Minister for Social Security, Jeane Freeman MSP, expressed disappointment last year that the completion date was as far back as 2022, so I find it strange that the SNP supports the halting of the roll-out today.
Universal credit is of particular importance to me because my constituency has a higher than average rate of unemployment, particularly among young people, and I am determined to see that rate reduce over the lifetime of this Parliament. Fortunately, universal credit is ensuring that more claimants are looking for and, crucially, succeeding in finding work than under jobseeker’s allowance. In 2015, 86% of those on universal credit were actively looking to work more hours, compared with only 38% under jobseeker’s allowance. The reason behind that is simple: JSA punished people who were looking to work more hours, but universal credit is designed to promote increased working hours.
However, we have to recognise that any major reform such as this will be challenging for users. The SNP should know all about roll-out issues—dare I mention the ongoing common agricultural policy payments fiasco in Scotland? This Government will adapt to ensure that any issues are addressed. It is of course right and proper that the Government take on the points being made about implementation and work to fix the issues that could see a good policy get damaged in the public eye through flawed delivery. Some have suggested today that universal credit makes claimants more likely to enter rent arrears, but clearly no one wants a policy to lead those whom it was designed to help to face further financial difficulty.
There is still some way to go before we can call this policy an unmitigated success, but the worst thing we could do is abandon or pause a policy that is helping people into work and return to a broken system that gave up on the unemployed when they most needed the Government’s help. After all, work is the most effective route out of poverty. It rewards the individual and allows them to regain purpose, routine and responsibility, enabling both society and the economy to prosper.
Gerard Killen (Rutherglen and Hamilton West) (Lab/Co-op)
This month, universal credit will be rolled out in full across South Lanarkshire, which includes my constituency. In October 2015, when I served as a South Lanarkshire councillor, universal credit was first introduced for newly unemployed single claimants. By the end of that year, 48% of council tenants in receipt of universal credit were in arrears, with a total of £65,000 outstanding. Not only did that put pressure on people’s lives; it also put pressure on a local authority already struggling under this Government’s austerity policy. I am dismayed that, two years later, the Government appear to have learned nothing from that experience. New claimants are still finding themselves in debt and arrears because, as we have heard many times, people are still waiting at least six weeks to receive payment.
Advance payments are repayable loans. For the six months that people will be paying them back, they will be expected to live on less than has been calculated for them to survive. That six-week delay assumes that everything goes smoothly with the application, which does not always happen. Some people are waiting far longer and find themselves significantly worse off after moving on to the full service.
What about those who do not have the IT skills or internet access to be able to apply online? They can go to a library or a jobcentre if they are still open, but that is not an option for many. Although I welcome the Secretary of State’s decision to scrap helpline call charges, there are significant issues with the quality of advice when people do get through, particularly because of the complex calculations involved. There is no point in the advice being free if it is incorrect. That is not a criticism of DWP staff, who are working very hard in difficult circumstances.
In many cases we are talking about whole families, often with complex needs, who are already in a difficult financial position and who are turning to the state for an extra bit of support, only to find themselves struggling to provide basic essentials. There are expected to be 1,150 new service claimants in my constituency between now and January. What advice should I give those constituents in the run-up to Christmas and beyond? Should I tell them that they might be forced into debt but that this is a learning process and the Government hope to use their experience to get it right eventually?
We already know what the issues are, and the Government already know what the issues are. We are talking about people’s lives, not a test and learn exercise. Credit unions, churches, housing associations, councils and food banks—how many more organisations will it take? How many more families do the Government need to hear from before they listen and pause this roll-out?
Chris Green (Bolton West) (Con)
Welfare is naturally a great concern for anyone who receives welfare payments, especially if there is to be a transition from one system to another, but it is also a big concern for people who fund the system, and not a great deal has been said about people who actually pay their taxes. I appreciate that people on universal credit also pay taxes, but there will be unemployed, employed and underemployed people in the system. All groups in society have to think that the welfare system is reasonable and just. There are many problems with the legacy system, and it needs to change.
The question is whether universal credit is, in all ways, the right system, and there are challenges for universal credit to overcome, but in the current system there is too much chance of people being written off or reaching the 16-hour cliff edge. If people reach 16 hours, they no longer have the incentive to work additional hours. How much money would an employer want to spend on training a person who works 16 hours a week? How much experience does that person get? A person with relatively little training and relatively little experience has relatively little chance of getting a promotion. We ought to change the system to universal credit, which does not stop people working extra hours, getting training and experience, and perhaps then getting that promotion.
For people who work erratic, relatively few hours that increase and decrease, it is challenging in the current system to keep up with the paperwork that that entails for six different benefits. That is a huge problem for people. We do not want people to look at the system and think, “You know what, if I take those extra hours this week, it will be a logistical nightmare to fill in all the paperwork and everything else to get myself back up to speed.” In the current system people choose not to take extra hours for a variety of reasons, as well as because of the 16-hour cliff edge. We need a system that is easy to navigate. We need a system where people who might be concerned about losing their job can say, “Actually, there is a good safety net. There is a system that will look after me in my time of need.” But there are challenges to address and we need that test, learn and rectify approach in place. The Government are demonstrating it with a slow roll-out, with the progress on advance payments and with the fantastic decision today to have free calls to the system.
Sarah Jones (Croydon Central) (Lab)
My cautionary tale from Croydon is similar to that of my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle). People in my constituency were among the first to experience the full service roll-out of UC back in 2015, and the size of Croydon means that our borough has the highest case load in the country. In Croydon, we have seen UC’s problems play out slowly over time, and the results make my weekly surgeries a very difficult place to be. Conservative Members have talked at length about the test, learn and rectify regime. My constituents have been tested, but I have seen no learning and no rectifying from Conservative Members.
As my colleagues have said, in many ways and giving many strong examples, the DWP takes weeks to assess a claim, and when my constituents are finally paid, getting backdated payments is like pulling teeth. In Croydon, two thirds of people living in local authority housing who claim UC are in rent arrears and at risk of eviction—that is more than 1,000 families. That is just a proportion of the overall figure, as many more are facing the same fate in private rented housing. Conservative Members have suggested that the situation was just as bad before UC was introduced, but in Croydon the average rent account balance for tenants on housing benefit was £2.50, whereas for those on UC it is now minus £1,224.
The problem is not just that delays to payment cause debt, that mistakes are made time and again, that communication is rubbish, and that it takes months to respond to evidence provided and months to pay what is owed; the biggest problem for my constituents is that when all the benefits were lumped together, with a laudable aim, the Government also trimmed the components, leaving my constituents with not enough money to live on. Universal credit is not enough to live on in Croydon. One of my constituents, a single mother who lives on her own after fleeing domestic violence, has been left with a £400 rent shortfall under the new system. The damage this programme has had on our town has meant that families are leaving because they cannot afford to stay. I met headteachers and the council last week, and they told me that primary school numbers in Croydon are now going down, as a direct result of the implementation of UC.
Can I finish with one—[Interruption.] No, I cannot, because I have run out of time. I just ask Conservative Members to vote with us today and pause UC.
Damien Moore (Southport) (Con)
I welcome the fact that the Opposition have chosen the subject of UC for this debate, as it has allowed many Conservative Members to address the various deliberate misinterpretations that have been proffered by some Opposition Members. I, for one, welcome the fact that UC is available in more than 100 jobcentres across the country and laud the Government for reiterating their commitment to having it available in all jobcentres from September 2018. Under the old system it often made sense for people to work for no more than 16 hours a week. How can any Member believe that was good for the country’s economic health or for an individual struggling in work? That is beyond me. It is simply bad for people who are stuck on benefits and bad for taxpayers, who end up paying more. It cultivates resentment and social division, and creates an incredibly negative benefits culture. Unlike Opposition Members, I am in favour of creating a fair and balanced system. Some of the claims and attacks on UC made by Opposition Members seem to miss the point entirely: this system is designed to cultivate work and help people not to be reliant on benefits. Research has shown that claimants on UC are more likely to move into work than those who are claiming JSA, meaning UC is helping those people become better off. Universal credit encourages people to eschew benefit dependency and assimilate better into the world of work.
It is worth addressing the system’s potential. It is clear that it will undergo tweaks and challenges as it is rolled out nationally, but no ambitious policy is perfect at its conception, and few are perfect even at their implementation. Nevertheless, universal credit has the potential to be a real game changer for how we look at benefits and assist people into work and to reach their full working potential. The Government have purposefully managed a careful and controlled universal credit roll-out, and I am sure that they will continue to look into any issues that appear, as they have done so far.
Labour’s goal seems to be to keep poor people on welfare, rather than to join the debate on how we create a society in which as many people as possible are able to work and as few as possible are reliant on handouts. Conservative Members are pragmatists and welcome sensible contributions from other parties about the honing of a welfare system that elevates those who are struggling rather than accepts the status quo. Universal credit is simple and fair and will be effective for the whole country.
Alison Thewliss (Glasgow Central) (SNP)
I shall highlight a few constituency cases before I address a more substantive issue.
I would like to talk about the £33,000 in rent arrears for just 57 new single Thenue housing association claimants. The Minister should know that none of them have received their payment within the six-week target.
I would like to discuss Bridgeton citizens advice bureau, one of whose clients is a single female aged 45 with existing anxiety and depression. She has been sanctioned four times and has had no money since 5 March.
I would like to talk about my vulnerable constituents: a man with mental health issues being supported by his partner—and they have a baby. They got into rent arrears of more than £1,000 because universal credit was £314.66 short of the rent for their emergency homeless accommodation.
I would like to talk about the £143,833 arrears faced by Glasgow City Council’s homeless services, for 73 claimants. That number has been and is increasing as more people move on to universal credit.
I would like to talk in particular about the two-child policy, because if ever there was an argument for pausing the roll-out of universal credit, this is it. I was glad to see yesterday that the Child Poverty Action Group was given permission to apply for a judicial review of the policy. If the court finds, as it has found before, that real misery is being caused to no good purpose, I hope the Government will not waste yet more public money on appealing the decision.
On universal credit in Northern Ireland, the advice on the UK Government website says that if someone wants to make a claim under the non-consensual sex exemption—using the form I have in my hand—they should make contact by phone or online, or collect a form from their work coach. In Northern Ireland, under the Criminal Law Act (Northern Ireland) 1967, anybody to whom a claim of rape is made has a legal duty to report that crime to the police. That duty falls not only on the work coach and the DWP, but on the third-party referrer—the doctor, nurse, social worker or sexual violence support worker has to report that crime to the police. Women in Northern Ireland should not face the choice between being forced into a criminal justice situation, which may make them feel not safe from a former partner, and putting food in their children’s mouths. That is no choice at all. The Government must pause the roll-out, particularly to save women in Northern Ireland from that danger.
The non-consensual sex exemption form is absolutely clear. It says:
“Please be aware that in Northern Ireland, if the third party knows or believes that a relevant offence (such as rape) has been committed, the third party will normally have a duty to inform the police of any information that is likely to secure, or to be of material assistance in securing the apprehension, prosecution or conviction of someone for that offence.”
Universal credit must be paused and fixed now. It is not safe for women in Northern Ireland.
Heidi Allen (South Cambridgeshire) (Con)
I am fortunate to have served on the Work and Pensions Committee since my election in 2015, and that has given me a really detailed understanding of universal credit. To reiterate my question to the Prime Minister last week, I believe that universal credit will be the most significant positive transformation of the benefit system in decades. The principles of universal credit are different and the support provided by work coaches is different, but that must not detract from the concerns that I and many Members from across the House have with the design of universal credit. I am disappointed that the Government did not pause the roll-out of this service while some of the system build flaws are resolved, but the Secretary of State has already given the commencement order, and that moment has passed. There is, however, another one-month roll-out delay in January, so all eyes will be on that.
I want to focus my efforts now on convincing Ministers that there are easy and relatively inexpensive ways of improving the design. I wish to put on record my thanks to the Prime Minister for meeting me and colleagues yesterday afternoon to hear our proposals. We were joined by the Secretary of State, and I am positive that we were genuinely listened to and that there was a shared determination to make improvements.
The biggest single criticism of universal credit is the time it takes for people to receive their first payment. Although I appreciate the announcement that advance payments will be made available to all, it is clear to me that, as the number of people requesting these is already rising, it must mean that the inbuilt six-week wait does not work. If we want universal credit really to replicate the world of work, payments must be built around a four-week cycle. Removing the initial seven-day wait must be the very least we can do. At a minimal sum of £150 million to £200 million a year, this would be an inexpensive fix that would benefit all claimants.
Rather than developing another system to prop up a flawed system, let us stop convincing ourselves that advance payments are the answer. Of course there will always be vulnerable claimants who will need financial support today, and, for them, advance payments have an important role, but if, today, more than 50% of claimants have taken up an advance payment—that is before the Secretary of State has said he will advertise them more widely—we must accept that there is a reason that that percentage is so high. Let us stop administering and paying out advance payments hand over fist and reduce the default waiting time for all awards to fortnightly payments at two and four weeks from the moment of a claim. Let us keep paying fortnightly until the work coach and claimant together decide that being paid monthly is okay, and let housing payments go direct to landlords. That would dramatically reduce the number of families going into rent arrears, turning to food banks and spiralling further into debt.
Having discussed this personally with the Prime Minister—I would appreciate another 20 seconds if somebody could give me some time, please. Will anybody intervene? No.
Stephen Lloyd
I thank the hon. Lady for giving way. I concur with a lot of what she is saying. Like many Members on both sides of the House, does she agree that the principle of universal credit can work if those two or three key changes are made? Without those changes, it will collapse.
Heidi Allen
I appreciate the hon. Gentleman’s intervention. I agree that we risk undermining the success of the system if we do not get these basic things right.
Having discussed this matter personally with the Prime Minister yesterday, it is probably too ambitious to expect a response just yet, but I am confident that she will consider our proposals. Why? Because as well as being the smart thing to do, it is the compassionate thing to do.
Two years ago, almost to the day, I made my maiden speech:
“a country and its economy does not function…if the people who run the engine cannot afford to operate it. We need every teaching assistant, care worker, cleaner and shop worker”—[Official Report, 20 October 2015; Vol. 600, c. 874.]
to secure our economic future. With Brexit looming, the call could not be more clarion than it was when I said it two years ago. To pull ourselves out of debt, we should not be forcing working families into it.
Mike Amesbury (Weaver Vale) (Lab)
Just three and a half months ago, I came into this place with two main aims: to make life better for the people I represent; and to stand up for the most vulnerable and those in need. I know that those aims are shared by my hon. Friends on the Labour Benches, and probably by hon. Members on other Benches, too.
Unfortunately, three and a half months into my time as an MP for Weaver Vale, what has become absolutely clear is that, when it comes to universal credit, these aims and values are not shared by the Prime Minister, the Secretary of State or the Government. Indeed, those values are wilfully ignored and, every single day that universal credit is allowed to continue in its current form, there will be considerable problems.
My issue is not with the aim of the policy itself—we can see the value in the basic principles of universal credit and what it is trying to achieve—and nor is our dispute with the staff at our local jobcentres. Yes, I have visited my local jobcentre, and some are doing everything they can to support residents in circumstances that are not of their making or of their choosing. Our argument is with this Government, who are overseeing a shambolic implementation that is causing delays, confusion, distress and debt. Our concern is for the thousands of residents and families who are faced with hardship—and, in some cases, hunger and homelessness—while this Government carry on regardless, ignoring the effects of their policy on the people of Weaver Vale and this nation.
Tom Tugendhat (Tonbridge and Malling) (Con)
Will the hon. Gentleman give way?
Mike Amesbury
No, I will not.
The Government are ignoring the effects of the policy on people such as Lucy, who was forced to take wage slips to the local jobcentre after a catalogue of errors from Government Departments meant that her payments were miscalculated. Lucy was left in arrears for rent and council tax, with no money for food for weeks on end. Her request for an advance payment—hon. Members have mentioned advance payments—was ignored. Indeed, she was told that
“this is happening to quite a lot of people.”
Lucy said to me:
“I have a daughter, I am a single parent trying to make an honest living, and this is how I am being treated.”
No Government, especially a Government who claim to be building a country “that works for everyone”, should hear those words and refuse to take action.
Mrs Anne Main (St Albans) (Con)
One of the advantages of having been elected to represent St Albans four times since 2005 is that I have a very long grievance and complaints database, as my husband keeps reminding me. I remember only too well the communications on working tax credit that came into my postbag when I first came to the House. People were getting requests for payback of £5,000 or £6,000, pushing their families into absolute misery. It made me realise that the system introduced by Labour was utterly broken. Since then, we have had to try to find a way to simplify the system.
The Secretary of State made an excellent speech. We need to say that universal credit is the way forward. Pausing it today—I understand that the Order Paper now reads “pause”, rather than “pause and fix” as it did yesterday—or halting it, as I notice the Scots nats say, would, in effect, be a wrecking proposal. If that is what the Opposition want to do, despite hearing all the pronouncements that this is a good system, they would be sending totally the wrong message.
The Government are in listening mode, and we are having a slow roll-out. It is excellent that there is autonomy over payments for housing rentals. There are 1,300 people on the housing list in St Albans, and people say to me, “I try to rent properties, but nobody will rent to me as soon as they know I’m in receipt of housing benefit.” At least this way they can take control of their own system. I am pleased that if people find themselves in difficulty, there is a way for universal credit to be paid directly to their landlord. As far as I am concerned, that is a belt and braces approach.
The Government need to listen to the concerns that have been raised, but—for goodness’ sake—we have had 10 years of trying to get away from Labour’s totally flawed system that left people multiple thousands of pounds in debt and squabbling in bureaucracies. Believe me, trying to get on those phone lines was a nightmare. There are teething issues, but—please, please—let us listen to them and learn from them, exactly as my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) said we are doing. Let us have a slow, learning roll-out.
For whatever reason—and in a non-binding vote for the Government—Members should not side with this Opposition motion, when the Opposition flip-flopped overnight about what they actually wanted to do. They are showing that what they really want is to revert to the totally flawed system that caused misery to many of my constituents. That is what will happen if the universal credit roll-out is halted or paused.
Mr Deputy Speaker (Mr Lindsay Hoyle)
The time limit for speeches is now down to two minutes.
Mike Hill (Hartlepool) (Lab)
In Hartlepool, where universal credit is already in place and therefore not being rolled out, I am seeing for myself not only the effects of implementation and the six-week delays, but the damaging effect of the drive to passport constituents in receipt of other benefits on to universal credit at any and every opportunity. I have seen people in the most desperate circumstances—starving, suicidal, broke and broken. I have seen people worried about keeping a roof over their head, and families in poverty, forced to use food banks. It is not just my office that has seen an increase in casework; so has the citizens advice bureau and other agencies.
Currently, 768 single parents living in Hartlepool claim universal credit. Universal credit was rolled out in Hartlepool in December 2016 and its implementation has continued to cause real difficulty and suffering ever since. The case study of Laura described by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) is similar to one in my constituency. The Government need to listen to people like Laura and the thousands of others negatively affected up and down the country by this punitive programme of implementation. Pause it and fix it.
Helen Whately (Faversham and Mid Kent) (Con)
Listening to this afternoon’s debate, I have been disappointed by the relentless negativity from Opposition Members. I am sure that all of us, on both sides of the House, spend the majority of our constituency time supporting the most vulnerable people in our communities. We all care—I certainly care—about getting the best possible opportunities and support for our most vulnerable constituents who are having the greatest struggles in their lives. That is why I speak regularly to the citizens advice bureau in my constituency, the food bank, the jobcentres and local councils about many issues, including universal credit. They have reported back to me that universal credit is working well in my area and across Kent—[Interruption.] Kent includes some seriously deprived areas and should not be mocked.
I am told that universal credit is helping people to work more hours when they want to, empowering work coaches to help people, and helping claimants to gain independence. I will not pretend that it is perfect. I welcome the Government’s raising awareness of the advance payment and I am glad that there is flexibility for the housing component to go directly to the landlord where that is the right thing to do. That needs always to be possible when it is the right thing to do, but I am told that it is sometimes difficult to trigger. It is wrong when landlords discriminate against people on benefits; that should be tackled. All in all, however, universal credit is a better system, and I will be watching carefully to ensure it continues to help my constituents as it is rolled out fully in my area.
Fiona Onasanya (Peterborough) (Lab)
Delay is not denial. We are asking that the roll-out of universal credit be paused and the system rectified before roll-out. If the roll-out is not paused and the policy continues as is, it will be less universal credit and more universal crisis. In its current state it is hurting, not working, as we have heard from Members on both sides of the House. My constituent Mr Bloy has explained to me that he is always on the back foot. Currently, he is in arrears on his electricity and gas bills, and in August he was sanctioned for allegedly missing an appointment in February, even though the DWP has acknowledged it sent the appointment letter to the wrong address, so he would not have known about it.
The roll-out needs to be paused until system defects and disproportionate impacts, such as those identified in the equalities impact assessment, can be identified and thoroughly fixed. To do the same thing and expect different results is nonsensical.
Mims Davies (Eastleigh) (Con)
I welcome the key feature of universal credit, which aims to ensure that work always pays. As we heard from my hon. Friend the Member for Bolton West (Chris Green), training and opportunities continue to be limited by the existing system, so let us not pretend we started from a perfect place. I hear on the doorstep how people are infuriated by Labour’s failure to remedy the system. Universal credit is a difficult but needed revolutionary reform.
Universal credit services have been rolled out in my constituency since July, and I am pleased to say that I have not had a great number of concerns. None the less, my caseworkers have picked up on two issues, which I happily raise today. The first is internet access for those who are less technologically able. I would like the Minister to take that forward. Some people use internet cafés. Some use other people’s access to the internet so that those people can work with them through the process. It can be daunting, but they do it and stumble because they do not have the full paperwork. We need real clarity on what paperwork is required, and then people will feel less frightened and see it more as an opportunity.
On 20 July, I had a meeting with my local housing association, Radian, which has been successfully helping people to get into work and into training. Its positive involvement absolutely has to be encouraged. Eastleigh has moved on to a live service. Staff at Radian have confirmed that they are actively supporting tenants. This new approach to benefits is allowing it to offer a wide range of opportunities through its website and tenants’ magazines.
I do not want to scaremonger. MPs on neither side of the House have a monopoly on compassion. All of us can shape the future of universal credit and make it better, because it does work.
Danielle Rowley (Midlothian) (Lab)
My constituency was an early roll-out area for universal credit and now has the full service, so through bitter experience and not through scaremongering, I will share some stories with hon. Members today.
Universal credit is having a detrimental impact on single-parent families. I have raised this previously on behalf of a constituent who is a single mother working hard to provide for her two children. As a result of the way that childcare costs are calculated within universal credit, she is in serious debt and may have to leave work. A policy that is designed to get people into work is, in its current form, keeping them out of it. Single-parent families need security and support, but under this new system they are facing unnecessary pressure, uncertainty and worry from a Government who seem to fail to understand those pressures. I understand the pressures that single-parent families face not only because I was raised by my mum on her own, but because I listen daily to experiences of my constituents, as well as the expert opinions of organisations that have been campaigning for the Government to halt and fix this roll-out.
Six weeks may be a short time in politics, but it is a very long time to wait for families who are already struggling. How can this be a successful system ready to be rolled out across the country when over half of those receiving it need to borrow money before their first payment?
I thank Members of this House and campaigners for putting pressure on the Government to remove the cruel phone charges, but there is more that we can do. People are in debt, facing eviction, waiting six weeks for payments, and relying on food banks, and we can put an end to it today.
Rebecca Pow (Taunton Deane) (Con)
We somehow seem to have bred a society that is too often too reliant on benefits. It is right that as a Government we help to provide a pathway back into work. The children in some parts of my constituency have grown up knowing four generations of unemployed in the family. That is not right. We have to try to break that cycle and help people get back to work. We also have to allocate the funds so that they go to the people who really need it, at the same time making the spending of taxpayers’ money fair. That is what universal credit is all about.
As we have heard, there was a need to change the old, inflexible, multi-agency, over-complicated system. Replacing it with this new all-in-one system run by one point of contact has been praised by everybody I have spoken to in Taunton Deane, including the CAB. Indeed, Taunton Deane is one of the first rural areas to see the full roll-out, so it is very much being watched.
However, I want to raise with the Minister some of the challenges in rural areas. The reliance on online applications particularly affects the elderly. We have a very large elderly population in Somerset, and I ask that we make sure that we help them. Mobile coverage is often poor, as are broadband speeds. We still need to address that in some areas. Once we have aligned all those things—I know that this Government are committed to putting money into that—the whole system will join up and work successfully.
I want to see a whole new system so that children growing up in families where they have seen only unemployed people have a different attitude to life, and people do not think that benefits are there just to keep them unemployed—rather, they see that they are there to help those who need it, but what they really need to do is get a job, and then they will know there is a better life.
Jo Platt (Leigh) (Lab/Co-op)
Universal credit was introduced to Leigh in 2013 as part of the local authority pilot, and there are currently 1,800 recipients in the area. I was, therefore, shocked to hear the Prime Minister claim at the Dispatch Box last week that the flaws in the universal credit roll-out were just teething problems and that the Government have been taking their time to address them.
I can say with certainty that those problems are not teething issues, but fundamental flaws in the universal credit system. During the four years of the pilot, people have been left without payments and there have been issues with IT and information sharing. Those problems have left families with huge rent arrears as result of having money unfairly withheld. In the borough, 80% of universal credit recipients are in rent arrears, compared with 36% of those who are not in receipt of universal credit.
That is not scaremongering, and it cannot be ignored. The system is evidently flawed. Where does that leave constituents? They can turn either to the local authority, which is also facing relentless, crippling budget cuts, or to food banks. The Trussell Trust has found that the number of emergency food parcels provided has risen by 16% in areas of universal credit roll-out.
The situation has also pushed people towards reliance on their bank or credit union for loans. My local credit union has told me of the spike in refusals of loans, because of the roll-out and the financial difficulties that residents now face. When people without long-term financial stability have reached out to the credit union after falling into rent arrears, it has accredited one in 10 refusals. That is all down to this complex and unworkable system. On behalf of my constituents who have dealt with the effects of the roll-out, I urge the Government to pause.
Matt Warman (Boston and Skegness) (Con)
We have heard many people talk in this debate about the work of Jobcentre Plus, and I begin by paying tribute to the brilliant workers whom we have all met in our local Jobcentre Plus offices. They go the extra mile every day to try to find work for our constituents, many of whom live in deprived conditions and have genuine challenges. In agricultural areas such as mine, many people have had to adapt, over many years, to casual labour and a rapidly changing working environment.
Universal credit is a crucial opportunity for the Government to encourage part of that adaptation. The local housing providers I have met have told me that, in due course and with appropriate assistance, it is to their advantage and that of the benefit claimant for the claimant to have control over their own money, to pay their own rent and to be able to use IT, which is now an absolutely crucial part of modern working life.
It is important to step back for one moment and realise why Members on both sides of the House agree on the principles of universal credit. For all the smoke and fury, even the Labour party is calling only for a pause in this reform, because all of us, on both sides of the House, know it is essential. If we do not persist with it, we will not deliver the essential savings and the benefits that are vital for our constituents.
Universal credit is a benefit programme that includes pauses to learn. It demonstrates, as we have seen today, that the Government have been listening. I call on Members from all parts of the House to calm down and realise that the principles are important and we should get there together.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Secretary of State has recently received a letter from the leader of Slough Borough Council, Sohail Munawar, following the council’s motion calling for the full roll-out of universal credit to be paused. I am proud of the council for having passed that motion, because the concerns are real. The partial roll-out has already pushed many in Slough into rent arrears and spiralling debt, with many claimants being forced to borrow money while waiting for their first payment. I heard what the Secretary of State said, but I have to tell him that his figures simply do not reflect the reality faced by my constituents. Figures for the substantial arrears of individual tenants provided by Slough Borough Council show the difficulties that have already been caused by a partial roll-out in the borough, but because of the two-minute time limit I cannot elaborate on that in detail.
Another point to note, as highlighted in a letter signed by more than 100 MPs, including me, is that the planned expansion from October to 55 further areas a month will flood the system with almost 500,000 applicants every month. I know the concerns of many of my constituents, including Lisa, who attended an advice surgery after receiving a final notice and threat of court summons for council tax. She had missed instalments while waiting for universal credit to be paid, and as a result, the whole year’s balance became due in one go, making the situation even more difficult. Lisa’s first payment of universal credit did not come in until almost seven weeks after the original date of claim, and even then the amount was wrong.
Many organisations, such as the Slough food bank and the Slough Salvation Army, do an incredible job, but they should not need to do so in one of the most advanced nations on earth. That is why universal credit needs to be paused and fixed.
Mr Bob Seely (Isle of Wight) (Con)
I have listened to this debate with an open mind, willing to criticise the Government if need be, especially if they were to fail my constituents on the Isle of Wight. However, the more I have listened, the more I believe that it is in our interests that universal credit should go ahead. I notice that the Opposition support that in principle.
Apart from the relentless negativity, there have been a couple of sensible suggestions. I echo what the hon. Member for Birmingham, Yardley (Jess Phillips) said about domestic violence and split payments. Will the Minister look into that? We need to be aware of people who are in an especially vulnerable position. I will work with Wight Dash, our domestic abuse centre on the Island, which I visited very recently to understand its specific concerns.
More generally, there is potential for financial hardship during the six-week transition period. I understand the principle, but if people have no money, they have no money, regardless of whether or not the principle is a good one. I join the chorus of those asking the Minister to do all he can to make sure that people transferring on to universal credit throughout the UK, including on my Island, know that they can be paid money in advance, with emergency payments on the same day. Will he consider increasing the advance from a half to, let us say, three quarters so that the principle of the loan remains, but a little bit more money goes into gearing up the system for success?
I will do all I can to work with my local groups to make sure that we are ready. Some Islanders have been on universal credit since last year and some will not be affected until 2019, but a lot are coming on to the system in May and June. The most important thing we can do is to make sure we are ready for that, so that we get the maximum upside from universal credit and all the fantastic support work that goes on around it to enable people to take opportunities, but will the Minister work with me to make sure that we minimise any potential negative effects as well?
Matt Rodda (Reading East) (Lab)
I have been interested to hear the range of views discussed today. I am from one of the areas where universal credit will be rolled out in early December, much to the concern of local residents. It is difficult to imagine the stress and deep financial distress that many of the people on this benefit will face over Christmas because of the ill-considered timing. From my perspective, this is wholly unacceptable, but I believe it is only one of a number of deep flaws in this ill-thought-through policy.
As we have heard, the six-week payment delay is a severe flaw. It does not take account of the reality that many people, especially those on low incomes, not only budget on a bi-weekly basis, but are in some cases paid once every two weeks. In our area, Reading Borough Council and local charities will do their very best to help those affected, but they have already raised serious concerns about this delay.
I should point out that the country as a whole is experiencing a dramatic rise in rent arrears, as well as increased evictions. We have noticed that in our town, and it is the same in many others in the south-east, as my hon. Friend the Member for Slough (Mr Dhesi) mentioned. That is because of the difficulty that people who receive the benefit experience in budgeting to cover their rent. It is also because landlords appear unwilling to house people on universal credit. I have been warned about that as an MP and previously as a local councillor, and I have heard worrying evidence of it from tenants and community groups.
Evidence also suggests a link between the six-week delay and the pressure on food banks. Food banks in areas of full universal credit roll-out have experienced a 17% average increase in referrals for emergency food—more than double the national average. Delays in receiving benefits and changes in benefits have become two of the three top reasons for referrals to food banks.
Those issues, linked with the delay in payment, have contributed to an increase in loans being taken out to meet basic needs—
Ben Bradley (Mansfield) (Con)
In 2010, the coalition Government inherited a broken welfare system that was over-complicated and encouraged a lifestyle of benefit dependency, with more and more families on benefits for successive generations, particularly in constituencies such as mine, where people have felt abandoned for decades. Many families who wanted to work and do the right thing were worse off and discouraged from taking on more hours. Since 2010, unemployment in Mansfield has fallen by half, and more people are able to live independently. The principles behind universal credit are absolutely right and make sense of the legacy of over-complicated benefits. Even Opposition Members largely agree with those principles.
The system is obviously not perfect. That is why the roll-out has been slow and measured. At every opportunity, the Government have looked at the system again and made improvements. They have introduced advance payments, alternative and direct payments and are making the helpline free, among other measures.
We know that the system is still not perfect, and I have taken concerns to Ministers, including about the security of private sector rentals, which the hon. Member for Mitcham and Morden (Siobhain McDonagh) mentioned. However, the difference between Government and Opposition Members is that we are committed to improving, adapting and fixing the problems as we go because universal credit has already helped people into work, and the new, reduced taper rate that rewards those who work more hours will put £700 million back into the pockets of hard-working families on low incomes by 2021. Opposition Members would abandon that support and settle for a chaotic system that prevents people from improving their circumstances through work.
I ask the Minister to continue to listen and learn from every stage of the roll-out. I hope that the Government will look closely at Crisis’s brilliant Help to Rent scheme, to support more people into secure tenancies and to reassure landlords, and consider including that in the Budget.
We have to move forward with universal credit. It is a huge project and the practicalities of rolling it out are far from easy. That is why, as my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) said, pauses are already built into the system to allow us to learn and change. We cannot go back to Labour’s disastrous system, which held people down: we should take the opportunity to offer people more support.
Rosie Duffield (Canterbury) (Lab)
I am exceptionally worried about the impact of universal credit roll-out on my constituents following today’s debate. The fact that the Government continue to plough on with a failing initiative despite protests from some Conservative Members shows that they are driven more by political pride than considered policy.
As we have heard, Citizens Advice says that half the people it has helped with universal credit were forced to borrow money while waiting for their first payment. The Government may claim that their advance payment system stops people being affected by the six-week waits, but as the hon. Member for Paisley and Renfrewshire South (Mhairi Black) said so eloquently, we must remember that advance payments are loans. Universal credit claimants will be expected to pay them back. Many people on universal credit already struggle with debt. To offer them a further loan is a completely inappropriate solution to the problem.
We know that single parents are among the hardest hit by waiting times for their universal credit payments. I know personally how hard it was to raise my children on my own while on benefits and what it is like to be in debt. I have lived with the reality of having to feed my children while knowing that any money coming in is already owed to someone else. What a shame that the hon. Member for Gloucester (Richard Graham) was not a fan of the Labour Government’s life-changing tax credit system! I assure him that those of us who depended on it to feed our children most certainly were.
According to the single-parent charity Gingerbread, a third of single parents were already in debt before universal credit. The loan-based solution to universal credit roll-out puts thousands of single-parent families at further risk of financial hardship.
Those problems are caused by incompetence, confusion and unacceptable delays. They have already happened because the Government are not listening to calls to reconsider the move from direct payments to landlords. I back my union, Unison, which continues to argue that tenants should be able to choose to have the housing part of their universal credit paid directly to their landlord.
Simon Hoare (North Dorset) (Con)
Very recently, I met representatives of both the north and east Dorset citizens advice bureaux. I would like to put on the record my thanks, and the thanks of my constituents, for the work that that great organisation does. We discussed its campaign for a pause. I told them then that I was not persuaded by it, but that I would listen to any subsequent parliamentary debate. Having listened to the Opposition Front Bench spokesman, I remain as unconvinced as to the merits of the case for a pause. It seems to be a pause for effect only—no particular purpose, no set of tasks in hand.
Despite the words of support for reform and for the principle of universal credit that we have heard from the parties on the Opposition Benches, I remain to be persuaded that that is anything other than lip service. All we have heard is a catalogue of negativity, with no idea of how best to move things forward.
This debate, however, is a very useful opportunity to reflect on the role of welfare in our modern society. My judgment is that welfare is all about a hand-up and a safety net. It is not what the Labour party has so erroneously carved it out to be: a way of life that embeds people in welfare and makes them entirely dependent on it in the hope—the callous hope, I would suggest—that that will create a pond in which the party can fish. Labour Members say they are compassionate and they care. I have news for them: we all care. We all stand up for our constituents. They do not, as hon. Friends have said, have a monopoly on care. We all have human emotions. We are all moved to help our constituents and I believe that in the end universal credit will help our constituents to improve their lot.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The principle of simplifying the social security system is a good one, but surely that should mean simplifying it for the people who depend on it, such as my constituent Mhairi, who made 26 entries in her journal without any response before we had to get involved as an MP’s office.
In 2013, Inverness was a pilot area for universal credit. We have a simple view. We thought we would see what the problems were and report them to the Government, who would look at them and fix them. What actually happened was a one-sided arrangement. We were telling them about the problems in 2013, 2014, 2015, 2016 and 2017. There were endless ministerial meetings, debates, questions and letters asking—begging—them to sort out the shambles, but nothing was done.
For those who do not think that universal credit is affecting rent arrears, I should say that Highland Council went from tens of thousands of pounds to nearly £2 million in rent arrears. That was entirely down to universal credit. There have been rent arrears, short payments, long delays, lost paperwork, evictions, crushed staff morale, and, until today, a premium rate for phone calls—I commend for my hon. Friend the Member for Glasgow South West (Chris Stephens) for his work on that.
We have 200 cases. There has been humiliation, degradation, desperation. Thank goodness for the support of the citizens advice bureau, the Highland Council support team and the jobcentre staff themselves. We have had single mums going from Christmas through to April without payments and living on food vouchers. Cancer patients have had to go without payments, getting short payments when the time came.
The Prime Minister said that the Government were listening and acting. For four years, that has not been our experience. I lay down this challenge for anybody on the Government Benches: come to Inverness, come to speak to our users, come to our summit on universal credit and hear from the people. I dare them to do that: to listen to the people who are being affected.
Rachel Maclean (Redditch) (Con)
I welcome the acknowledgement of Opposition Members that they agree with the principles of this much-needed reform, which is changing a broken welfare system.
I am not standing up here pretending that everything is perfect. The system before was not perfect either. We are not blind to the stories of human suffering that we have heard this afternoon; they are profoundly devastating when we hear them. We all see those people in our daily lives and in our constituencies. That is why were are raising these issues with Ministers, and they are listening to us.
In my constituency, we are gearing up for roll-out very soon, and I am meeting those involved so that I can be there on the ground flagging up the support available to people when they most need it. Please let us remember that for every heartbreaking story we hear in this place, there are positive stories of people’s lives being changed by their being able to get back into work and meet their aspirations of taking on more work without being penalised for it. [Interruption.] Opposition Members shake their heads, but I have spoken to such people, as have many other hon. Members. My colleagues and I reject the caricature of us as uncaring robots. It does not help the constructive work we can do when we work together in this place.
Vicky Ford
I thank my hon. Friend for reminding us that we all agree that the principles of universal credit will deliver great benefits. Does she share my concern, however, that the Opposition want to delay the roll-out of a programme that has already taken nine years? How much longer do they want?
Rachel Maclean
As my hon. Friend says, the programme is being rolled out cautiously. We spend a lot of time in our areas working with constituents to make sure they are not negatively affected. It is our job to ensure they get the help they need. I cannot vote for the motion tonight because it targets the most vulnerable people aspiring to escape the cycle of poverty in which they are trapped by the existing broken system.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
As universal credit is a single credit combining several benefits, the accuracy and timeliness of payments is even more crucial than for the legacy benefits. Benefit errors have been common for some time, as my constituent Veronica and many others know too well, and they can have disastrous consequences.
Even before universal credit, people needed help from a food bank mainly because of problems with the benefits system. Where families claimed multiple benefits, however, even when one was suspended, others usually kept being paid and the family often still had some income. There is no backstop to universal credit, however, meaning that a failure to receive a payment can leave a family and their landlord with absolutely nothing. Local welfare support schemes are extremely patchy, difficult to access and, in some areas, simply do not exist. Delivery continues to be less accurate than for legacy benefits, and the complexity of the benefit makes improvements difficult. I am concerned that the design of universal credit does not sufficiently take into account the lives, skills and resources of the least well off and as a result will lead to greater debt, poverty and exclusion. It should be paused until these design and implementation flaws have been rectified.
Stephen Kerr (Stirling) (Con)
I will not vote for a pause in the roll-out of universal credit. I speak as a supporter of welfare reform, and as I speak I think of the 1,005 people in my constituency currently seeking employment. The roll-out of universal credit is well under way in Stirling, and I have been impressed by what I have seen of the way it prepares people for work or a return to the world of work. Welfare reform is never an easy process, but the way the Government have approached the introduction of universal credit is the right one to deal with a change of this magnitude.
I have found the response of Ministers to have been very positive. They have undoubtedly listened to my concerns; far from being uncaring, the Government have worked to create fast-tracked advances, for example, to ensure that money reaches those who need it fast. We must continue to work through the practical issues of implementation, and I know that Ministers are keen to.
I have corresponded with Ministers on the issues facing rural constituencies such as mine, including problems with inadequate broadband and a lack of mobile coverage. In fact, there is not even public transport in some cases. Those are real concerns for me. I am particularly concerned about claimants who have mental health issues, and who struggle with the complexities of the various aspects of any benefit programme. I am also concerned about the issue of digital literacy, which has already been raised by a number of Members. I hope that the Minister will address those issues when he winds up the debate.
Many of us would like further consideration to be given to the difference between fortnightly and monthly payments, and the need that some claimants may initially have for a transition period between the two. I should also like the Government to reflect on the six-week wait for first payments. That is a long time for people to wait when they are in need, and it should not be beyond our means to design a better system to shorten it.
As Members of Parliament, we have a responsibility to ensure that we help people, and welfare reform should not be used as a political football.
Liz Twist (Blaydon) (Lab)
I was going to talk about the real problems experienced in my constituency—initially with the live service, the comparatively straightforward bit. I was going to talk about the huge amount of help needed by people applying for universal credit. I was going to talk about the delays in payments, and the practical problems that that causes, and about the arrears that people on universal credit are experiencing: an average of £625, as against the general average of £121. I was going to talk about the evidence that private landlords are beginning to refuse tenancies to people on universal credit and about the fear that some children could go without free school meals while their parents wait for their claims to be assessed, which is a problem that we really need to look at.
But the House has heard about all that from everyone else, so instead I am going to talk about Gateshead Foodbank, which covers my constituency and that of my hon. Friend the Member for Gateshead (Ian Mearns). In 2016 it issued 4,861 food parcels to keep families going, largely owing to the roll-out of live universal credit—and that is before we see full service.
This is about people. It is about families and children who are building up debt and going without, choosing between heat and food and making other difficult choices, and experiencing all the frustration of dealing with the new system. I ask the Government to think again about pausing. We have talked about “test, learn and rectify”; let us do that.
Eddie Hughes (Walsall North) (Con)
In 2016-17, the United Kingdom spent approximately £218 billion on welfare. I fully appreciate that a significant amount of that will have been spent on benefits that are not covered by this policy, but a not insignificant amount will have been. That is why Governments seek reform in this area, and it is probably why, in 2003-04, the Labour party sought to reform welfare by introducing the working tax credit. That was clearly an unmitigated disaster at the time, which shows that there have been complexities under Governments of both parties. I understand from the Office for National Statistics that of the £13.5 billion that was paid out, £1.9 billion was an overpayment. Welfare reform is complicated, but it is important for us not to look to the Government to fix everything.
I chair the board of a housing association, whg in Walsall, which manages 20,000 houses across 18 different authorities. We are currently dealing with 327 live cases of people on universal credit, 83 of which were clear of rent arrears when they came to us. We fully understand the complexity of this problem. However, we are using this opportunity to work with our tenants to ensure that they have planned their budgets. We have also applied, jointly with Accord housing association, for £23 million to operate the Click Start programme so that we can help both the unemployed and the economically active with computer literacy.
I say this: do not just look to the Government to fix your problems. Housing associations across the country are doing fantastic work to help their tenants themselves.
Martin Whitfield (East Lothian) (Lab)
East Lothian was chosen as one of the universal credit pilot areas—a place where it could be tested, and where learning could take place and it could have been rectified. In the short time that I have, I shall draw attention to two reports that I know the Government have seen.
The first was commissioned between June and August 2017 by the revenues team of East Lothian Council. It ran an online survey regarding UC to find out how to improve its service. There was a huge number of responses, from people who were online and competent and able to engage digitally. The results shown in it therefore cover people who have not been trapped by entrance into UC. Some 81% confirmed that they got their payment between six and eight weeks after applying, and 19% waited longer. Some 47% said they did not feel supported by the DWP, and only 25% managed financially while waiting for their first payment. That means that 75% had some deductions from that payment. Their main concerns were paying bills, housing, and feeding the family—the very foundations of the hierarchy of needs—and after three months 46% said their financial position had not improved.
Reference has been made in this debate to the “Universal Credit in East Lothian: Impact on Client Income” document created by the citizens advice bureaux in East Lothian in Haddington and Musselburgh, and the figures that the improvement was 24p per week and the loss £48.26.
In conclusion, I shall read one email I received:
“It pains me to say but last week the stress of everything got too much and I attempted to take my own life. I don’t know what else I can do feeling like this and getting constantly fobbed off by the UC. My wife informed them of my attempt on the 11/10/17 and still haven’t heard anything.”
Wendy Morton (Aldridge-Brownhills) (Con)
Unemployment has fallen in my constituency from 5.2% in May 2010 to 2.2% in September 2017, and youth unemployment has also fallen. That is in part due to the work of this Government in strengthening the economy, but it is also due to the commitment of the many businesses and organisations that have taken on more people, to the work of our colleges, further education establishments and apprenticeship providers, and to the work of our jobcentres.
But of course some people are not in work and some are in work but also depend on benefits, and it is important that we have a welfare system that helps people into work and supports those who need help. It is also important, however, that the system is fair to those who pay for it, and the old system of benefits was not working; it was a system under which it was not worth working for more than 16 hours a week. That was not fair.
Universal credit makes more sense and is a much fairer system. It has yet to be rolled out, but I have already met our local jobcentre and seen the preparation work it is undertaking to get ready for that. Walsall Housing Group has also prepared some of its tenants in anticipation of the roll out of universal credit. We should not forget that there is a nine-year roll-out period from start to end for universal credit.
We must also remember that this is a steady roll-out, with learning and, where necessary, action. We have already seen today that the helpline issue has been addressed. This is the way forward—making careful progress and not losing sight of our ultimate goal.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Of course the aims of universal credit are welcome, but the simple fact is that full service roll-out is not delivering them. Instead, in too many cases it is causing confusion, stress, financial crises, arrears and debt, and is threatening families with homelessness, including in Kirkintilloch in my constituency. If the Government are serious about their original ambitions for the roll-out, which I think are shared across the House, they should pause and listen and reflect on the genuine concerns raised not just on the Opposition Benches, but by various organisations ranging from poverty campaigners to advice services, from Churches to housing associations, and from staff working in the system to those suffering under it.
These organisations and individuals are not scaremongers. They must be listened to, and almost overwhelmingly and universally they seek a pause. Let us not forget that the roll-out of full service universal credit has barely started. Already, we are hearing how disastrous and problematic it is proving, so the faster roll-out planned in the months ahead risks massive multiplication of all those problems. By going ahead now, without properly ensuring all issues have been addressed, the Government would be making a horrendous and unforgiveable mistake.
We need a pause, and during that pause we need to take this benefit right back to first principles so that it is meeting its original aim of reducing poverty, rather than pushing people into crisis. We need to reverse the cuts to the work allowance and to revisit the idea that six weeks is an appropriate waiting time. Otherwise, the Government will be rolling out all the problems that we have heard about today: increased rent arrears, increased debts, food bank queues and homelessness. We must pause and test; only then can we fix this mess and proceed after resolving all these issues.
Laura Pidcock (North West Durham) (Lab)
Universal credit is clearly designed by people who lack knowledge and experience of poverty and of what it is like to be an unemployed worker, and who have no experience of the full impact that this policy will have on claimants. I am absolutely appalled by the apathy shown by those on the other side of the House towards stories of suffering. Why do they think there is such a level of feeling among advice and support agencies? Do they think those agencies are just making it up? How dare this place test and learn a policy on actual people, on actual citizens? They have tried once again to divide those looking for work and those in work, but the people out there will see through that.
I want to make one substantive point about this policy, and that is on advance payments—or loans, as they actually are. They have always been available. They were supposed to be available only for those at crisis point. Let me tell the House how much that amounts to for a single person under the age of 25: they get about £126 for six weeks, which equates to £21 a week or £3 a day. I challenge anyone in this place to try to survive on £3 a day—
Laura Pidcock
Absolutely not. I challenge anyone in this place to try to do that and not feel the sense of outrage that we do.
I could talk about in-work conditionality, which punished those on zero-hours contracts, and the wholly inappropriate roll-out of this system in North West Durham on 13 December, which caused misery across the festive period. All the inadequacies and difficulties I have outlined have simple solutions. There is no need for such a protracted assessment period and there should be a clear and flexible payment option. There should be a warmth about the Department for Work and Pensions, a comfort. People should not feel scared or worried in their dealings with the Department. It should offer hope, security and guidance for my constituents. All that is within the power of this Government. Please pause this roll-out.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Universal credit is being rolled out in my constituency today. I used to chair a debt and welfare advice centre on my estate of Rose Hill. On that council estate, 50% of children are growing up in families living in poverty. Guess what? Many of those families are in work, so in-work poverty does exist in this country.
I have a strong interest in this issue, but little time to talk about it, so I will focus on two areas where the Government could, if they listened, change things right now. It would cost nothing and massively improve the situation facing many claimants.
First, around implied consent, I will talk directly to the Secretary of State now, if he does not mind, because he seemed to suggest earlier that he thought that advice agencies would be able go to the local jobcentre on behalf of their clients to help them when making a claim. Actually, that is not the case, because the rules around implied consent have been changed with universal credit. Following the intervention by my right hon. Friend the Member for Birkenhead (Frank Field), only MPs are deemed to have implied consent from the people they are representing if there is a problem with universal credit, not advice agencies. We do not often have a magic wand, but will the Secretary of State please wave his magic wand—tonight—and say that he is going to change that? Advice agencies, as he seems already to believe, need that implied consent to represent the people they are trying to help and to be able to get through to the DWP to assist those who are struggling with their universal credit applications. He can do that and he can do it now. Please will he do it?
Secondly, we have heard already about how there will be a landlord portal and, allegedly, information sharing with landlords. Why is there no information sharing with local authorities? They have been banned from getting that information about the composition of universal credit, so they cannot work out who needs to get council tax benefit or which families will be classified for the pupil premium. Again, why does the Secretary of State not just wave that magic wand and say he will enable local authorities to be trusted partners? He can do it tonight. Please do it tonight. Two changes—say that you are going to put them in place.
Ms Karen Lee (Lincoln) (Lab)
My hon. Friend the Member for North West Durham (Laura Pidcock) spoke well at PMQs about the effect of universal credit in her constituency. Lincoln also has pockets of deprivation: some 13,000 people who work earn less than the living wage; one in four children live in poverty; one in 10 households are in fuel poverty; and 10 areas in Lincoln are in the top 10% of most deprived areas nationally. Universal credit was rolled out for single people in Lincoln at the end of November 2015, and the manager of the local food bank says that usage has already increased significantly as a direct result of universal credit and benefit sanctions. When universal credit is fully rolled out in March, I am concerned that people who are already suffering from the effects of the bedroom tax, benefit caps and the freezing of benefit rates will suffer even more.
Gingerbread, the CAB and Crisis—it is not just Opposition Members—all agree that simplifying benefits is a good idea, but universal credit is causing increases in poverty and homelessness. We have all received those briefings. Universal credit is this chaotic and divided Conservative Government’s initiative and it must be halted. It is a direct and deliberate attack on the poor and the vulnerable—[Interruption.] Government Members can shake their heads, but it is true. The Prime Minister must see the unnecessary suffering that her chaotic and divided Government are causing. They must stop inflicting this suffering on the people of this country and consider the needs of the many, not just the few.
Stephen Lloyd (Eastbourne) (LD)
This has been an important and interesting debate on an important issue, and I thank the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) for bringing it to the House. I have been listening to speeches from both sides of the House for hours, and people from both sides have been constructive in their comments. Like many, I believe that universal credit could be a tremendous benefit—I supported it years ago—but unless the Government fix some remaining issues, it will fail.
First, I was disappointed that the then Chancellor took £3 billion from the universal credit budget shortly after the 2015 general election, meaning that work does not pay anymore. It may pay a tiny bit, but the original concept was that work really would pay. I urge the Secretary of State and the Government to put that money back into universal credit.
Secondly, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), a former Secretary of State, said that the Joseph Rowntree Foundation has supported universal credit. I was a bit surprised by that, so I did a quick check. The JRF actually said that it would support universal credit if it was properly funded—I just mentioned the £3 billion—and if payment and waiting times were reduced, which is exactly what many people have been saying today.
I have one final point to make in the limited time available to me. We have been discussing housing associations and housing benefit, but it is the private rented sector where there will be a car crash unless payments are made directly to landlords. Owing to the nature of their business models, private sector landlords will not wait two, three or four months for their tenants’ money to be paid. I urge the Government to fix those issues.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
It is a great privilege to speak on behalf of not only my constituency, but the United Kingdom. People are worried. They live in fear. They cannot build a brighter, better future. Most criminal of all, they feel that people are not listening. I have a simple message for the country tonight: this side of the table is listening. Labour is listening.
People do not choose to live on benefits. Millions of children across the United Kingdom are growing up in working poverty. Their parents go out to work, but they cannot afford the gas or electricity bills and the fridge lies empty. That is the country we have today. That is the country that the Government have given the workers. Workers need a decent salary, and I am here to get justice for workers.
On Monday, a children’s choir travelled down from my constituency—500 miles—to come to Parliament and to see the play “Wicked”. I said, “When are you meeting Theresa May?” [Laughter.] They did see the play, but they came to Parliament and this lovely choir sang their hearts out for us. However, the point is that they are tomorrow’s adults. They are disabled children, and they were brought down here by their families thanks to the good will of the community of Coatbridge, Chryston and Bellshill, which collected the money for them. Some of those children will not make adulthood. For some it was their first time here, and they will not be back. They are the people I fight for. Those children are tomorrow. Do not tell me that they all want to work, because universal credit is also about children and adults who cannot work because they are looking after children.
I am showing the red card. That is what this is about. Let us halt it. Let us stop it.
Chris Stephens (Glasgow South West) (SNP)
I am a member of the Work and Pensions Committee, and I nearly fell off my chair this morning. Having secured the Adjournment debate on 21 June 2017 on call charges for phoning the DWP, I was delighted with today’s announcement. For it to work, and to ensure that people are not charged for phoning the DWP, will the Government take action against third-party providers that claim to advertise the DWP telephone number online while ramping up the charges to transfer the call? That is the last issue on telephone charges to be addressed, and I hope the Government do so.
Next month is the 75th anniversary of the publication of the Beveridge report, which surely tells us that we should be having a cross-party, cross-community discussion on how to ensure our citizens are not victims of economic destitution. I urge all Members, and those watching the debate, to read the evidence submitted to the Work and Pensions Committee by dozens of organisations working on the frontline to pick up the pieces of the broken universal credit system.
I urge hon. Members to read the cases on the Committee’s website submitted by victims of this system. People have been left with huge rent arrears. Pregnant women are forced to live on child benefit and food banks. Claimants are forced to choose between food and heating. That should not be happening in a 21st-century world, and it certainly should not be happening 75 years after Beveridge’s report.
I support the motion.
Julie Cooper (Burnley) (Lab)
I reiterate that the Opposition support universal credit. What we do not support is its shambolic implementation, and it is deeply offensive when Conservative Members accuse us of negativity.
Does the Minister know what it is like to live in a home in which every single penny is taken up by providing the necessities of living? Does he know what it is like not to have enough to eat? Does he know what it is like to be cold at home? Does he know what it is like to see a parent anxiously dreading the fuel bill dropping through the letterbox or worrying how they will buy school shoes or a warm coat for their children? Well, I do.
I grew up in a single-parent family in which my mother tried desperately hard to keep a home for my brother and me. She always worked, and she did not drink or smoke. She was always embarrassed to claim benefits, but she had no choice but to claim financial support to supplement her wages. There were no spare pennies, and a week’s benefit was the difference between our having enough to eat or not. I know only too well how hard it has been for single parents in my constituency to face as much as two months of waiting for universal credit payments.
The Minister is proudly promoting a system that is causing widespread misery, a system of hardship that is punishing families who are doing their absolute best, a system that is pushing more children into poverty. If the Government are serious about giving all children opportunities and supporting all families, I urge them to listen and to support the motion tonight.
Mohammad Yasin (Bedford) (Lab)
Universal credit was rolled out in Bedford in May, and it is causing pain and suffering to many of my constituents who find themselves much worse off after being transferred on to the new system. We were told that under universal credit people would never be worse off in work, but in reality the opposite is true. The fastest growing category of people in poverty are those in work, and many people on UC are worse off.
Work does not pay under this Government. Work does not pay for my recently bereaved constituent who has lost her bereavement benefit and now has to look after her two children as a working mother with £300 less a month. Work does not pay for my constituent who is now £250 worse off after transferring to UC. Work does not pay according to local charities, which tell me that on a daily basis they are meeting people who are facing debt crises of one sort or another. This experience is forcing people—often working families—into desperation, real poverty and shame, but it is this Government who should be ashamed, for introducing this cruel, shambolic and failed reform.
Stephen Timms (East Ham) (Lab)
According to the plans announced by the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) in July 2010, just after that year’s general election, the roll-out of UC was due to be completed this month; October 2017 was when it was all going to be finished. Instead, as we have heard, only 8% of the roll-out has taken place. So it has been a little ironic to hear Ministers and former Ministers who have presided over such an extraordinarily delayed programme getting hot under the collar about the sensible and thoughtful proposal from my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) that this project should now be paused in order that the problems we have heard so much about in this debate can be fixed.
I want to touch on the emerging administrative problems with the way this benefit is being delivered, with reports from the Child Poverty Action Group about UC being underpaid because real-time information provided by HMRC about income is not always reliable or accurate. It has also reported on claimants being paid the wrong amount of UC for no apparent reason. In other words, there is growing evidence that the IT for delivering UC is not working as it should. The position was well summed up by the current Secretary of State’s former boss, George Osborne, in his Evening Standard editorial last Thursday, where he wrote of the
“sorry history of procuring an IT system for the new universal credit”.
A sorry history indeed it has been. In particular, there is growing evidence that this RTI system is not doing what it is supposed to do. That was flatly denied by Ministers for months until it emerged last month in response to a freedom of information request: the existence of the late, missing and incorrect RTI project.
Christine Jardine (Edinburgh West) (LD)
I have to confess that I am one of the many who was impressed when I first heard about UC. Let me assure the hon. Members for Totnes (Dr Wollaston), for Angus (Kirstene Hair) and for South Cambridgeshire (Heidi Allen) that the principle of making benefits easier to claim and helping people back into work is one I still support. But I find that the reality—the operation of UC and all the evidence—creates a very different picture. We hear that, instead of it helping, as many as 1 million children could be pushed into poverty by 2020. That surely cannot be the legacy that my Conservative colleagues would want to leave for future generations. They surely cannot be content with what they are hearing in this Chamber from constituents and even their own Back Benchers: that families are facing rent arrears and the threat of losing their homes; that there is anxiety about missed payments; and that people are choosing between making those payments or feeding their families.
Citizens Advice Scotland has already seen more than 100,000 people, one in five of whom have waited more than six weeks for payments—and only 14 areas in Scotland have UC. We stand at an important crossroads: the Government have the opportunity to pause UC, address its many flaws and say to those coping with the cruel reality of this botched benefit reform, “We hear you. We recognise the problem and we will fix it.” I appeal to my colleagues on the Government Benches to reject that approach. Simply to abstain or to forge ahead with this now universally discredited scheme would demonstrate beyond doubt the emptiness of Government claims that they are building a country for everyone.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Time dictates that I should speak about one section of the community for whom universal credit will have a particularly devastating impact: the self-employed, and specifically actors and creatives.
Most entertainers are self-employed. It has been established by case law and accepted by HMRC that entertainers should usually be classed as self-employed for tax purposes, but universal credit penalises those deemed gainfully self-employed by averaging out their previous years’ income and in most cases treating claimants as earning 35 times the national minimum wage—the minimum income floor. They are treated as if they earn £1047.50 a month, regardless of whether or not they do.
It is clear from the figures that self-employed claimants are far worse off on UC than they were on legacy benefits, and even more worse off compared with other unemployed UC claimants. As UC payments include housing costs, unemployed creatives will be unable to pay their rent, risking homelessness.
Unlike other UC claimants, entertainers do not have a choice about whether they pursue self-employment; they must be registered as self-employed to work professionally. In April, the Work and Pensions Committee called for the solving of the problems with the practical operation of UC to be made an urgent priority and for improvements to be made to its sensitivity to the realities of self-employment. Until that is done, the minimum income floor should not apply to self-employed UC claimants.
I urge the Government to celebrate our brilliant creative industries while understanding that the ebb and flow of entertainment salaries should not throw people into poverty. They must not undermine access for the working-class entertainers who enrich the creative industries as a whole. Please, pause and fix.
Faisal Rashid (Warrington South) (Lab)
I shall focus on the problems with universal credit in Warrington South. As the Minister will know, Warrington is one of the pathfinder areas in the north-west in which universal credit was introduced in 2013. As such, we are already seeing the severe consequences of the Government’s mishandling of universal credit in our communities.
It is often the most vulnerable in society who are most affected by the failures of programmes such as universal credit; indeed, low-income individuals and families are among those who have been hit the hardest. The annual report from Warrington food bank highlighted that in 2016-17 the number of meals delivered increased by 13.9% on the previous year. Volunteers and trustees at the food bank found that the increase was directly linked to the full roll-out of universal credit in the town. Research found that 48% of the 56,000 meals given out by Warrington food bank went to individuals suffering because of benefit changes or delays, and more than 34% of those meals went to children.
The situation is unacceptable and unsustainable. Government failures are putting people at increased risk of eviction and visits from bailiffs. The help offered in the form of Government advances comes with repayment rates that are unaffordable to many. The stated aim of universal credit is to make work pay and thereby encourage individuals back into work. The Government should consider this: if people have nowhere to live and nothing to eat, how can we expect them to get a job? Universal credit is simply not fit for purpose and the Government must pause the full service roll-out.
Alex Sobel (Leeds North West) (Lab/Co-op)
Although it is obvious that the issues with universal credit could be addressed swiftly—for example, by reducing the waiting time for first payments; by providing emergency advances, but not as loans; and by equalising the in-work support disparity between the current system and universal credit—I fear that the problems with the policy run much deeper. In demanding that the Government address these select issues, we risk presenting them merely as bugs, but they are not bugs; they are built into the system.
Universal credit was designed to offer a distinctly Conservative solution to a distinctly Conservative analysis of Britain today. It will teach a claimant how to make the right spending decisions by forcing them into rent arrears. It will help someone to resolve the conflicts in their relationship by depositing the sum total of their benefits into their partner’s bank account. It will put a whole month’s rent, previously paid directly to the landlord, into the pocket of a parent who is struggling with debt and dependency.
When we hear from the frontline about the problems with universal credit—long payment delays, rent arrears, domestic abuse victims trapped, and the arbitrary sanction of payments—we must understand that they are no accident; they are about ideology. They are not bugs; they are features. That is why we need to pause and to fix the system of universal credit. We argue not with the principle of it, but with its entire implementation, which is broken
Margaret Greenwood (Wirral West) (Lab)
This debate has been wide ranging, and we have heard Members from all parts of the House describe with real focus and urgency the unrolling fiasco that is universal credit under this Government.
Ninety Members put in to speak in this debate, reflecting the huge concerns across the House and in the country. Labour calls on the Government to pause the roll-out of universal credit and fix the problems that have been so clearly described today.
Universal credit was designed to simplify the benefit system and provide support for those on low pay and out of work. We in the Labour party supported those original aims, but, in fact, this new benefit is damaging the lives of many of the people it is supposed to support.
Ruth George
Does my hon. Friend agree that, when the Institute for Fiscal Studies says that a further 3 million working families will be made, on average, £2,500 a year worse off, universal credit is never going to work for working families?
Margaret Greenwood
My hon. Friend makes a very strong point and I thank her for it.
Sir John Major recently called the roll-out of universal credit operationally messy, socially unfair and unforgiving. A former Government official, Dame Louise Casey, likened it to jumping off a cliff. Members are extremely concerned about what universal credit means for their constituents. Indeed, 12 Members from the Government Benches have written an open letter to the Secretary of State, calling on him to pause the roll-out, and their concern is widely shared around the House.
In response to concerns raised last week, we heard the Secretary of State reassure us that those who go on to universal credit are more likely to be working six months later than they would be had they been on legacy benefits, and that they are also more likely to be progressing in work. However, his statistics date from 2015 when universal credit claimants were, on the whole, single unemployed jobseekers, whereas the benefit is now being rolled out to people with much more complex circumstances. Furthermore, his statistics dated from before the cuts to work allowances were introduced in April 2016.
In response to concern from all parts of the House about what is happening now, the Secretary of State said that universal credit is about ensuring that our constituents are in a stronger financial position—
Margaret Greenwood
I cannot give way, as I must make progress.
The reality, according to the Trussell Trust, is that food bank referrals have increased by more than double the national average in areas in which the universal credit full service has been rolled out. The Peabody Trust says that the arrears rate for its tenants in receipt of universal credit is three times that for tenants unaffected by universal credit. Half of families in arrears under universal credit have said that their rent arrears started after they had made a claim.
The Secretary of State said that if tenants have a reasonable expectation of receiving housing costs as part of their universal credit payment, the landlord should not take action and the tenant should not face eviction. If only it were that simple. Research by the Residential Landlords Association published in August found that 29% of landlords had taken action to evict a tenant on housing benefit or universal credit in the past 12 months and that arrears were the main reason for doing so. It also found that two in three private landlords were more reluctant to rent to claimants of universal credit because of their concerns about arrears.
The Secretary of State presented advance payments as the answer to the problems of delays in universal credit, but advance payments amount to only 50% of two weeks’ payments of the claimant’s estimated universal credit. He wants to raise awareness of advance payments, but if half of the claimants are already taking advance payments even before he has started, people are clearly struggling to get through the waiting period.
Organisations such as Citizens Advice have been sceptical that advance payments are the solution because they see the reality of what it is like to cope with no income for the six weeks or more wait without savings. As Members of Parliament, we are here to serve the people who live in our constituencies. It is our job to take the Government to task when they get it wrong, and on universal credit, they have got it seriously wrong—wrong in the design and wrong in the delivery. Let us look at the design first.
The flaws in the design of universal credit are many. The infamous six-week wait is a built-in pathway to problem debt. Universal credit is meant to mirror the world of work, but waiting six weeks or more to be paid does not, especially where people are used to being paid weekly or fortnightly by an employer. When I asked DWP what percentage of UC claimants receiving in-work support are paid monthly, the answer I received was:
“We do not have quality assured data on the payment cycles of universal credit claimants who are in work or for those who were in work before they claimed.”
Then there is the payment of the housing element directly to the claimant, not the landlord, putting vulnerable claimants at risk of eviction and exploitation. The difficulty in arranging alternative payments has also been described. The two-child limit means that a new baby in a family that already has two children will not have the same social security support as their brothers or sisters because the family will not qualify for tax credits or universal credit for that child, with the unacceptable implication that some children are valued more than others. There is the minimum income floor for the self-employed, who the Government assume, for the purposes of universal credit, earn the equivalent of 35 hours a week on the national living wage after a year, even though around half of self-employed people earn less than two thirds of median weekly earnings.
The cuts to work allowances will leave some families up to £2,100 a year worse off even after the changes to the taper rate announced last year. The failure to provide work allowances for second earners brings into question the effectiveness of work incentives under universal credit, particularly given the importance of a second earner to address in-work poverty. The withdrawal of severe disability premium in universal credit means that some disabled people can be up to £62 a week worse off if they move on to universal credit because of changes in their circumstances such as moving from a live to a full service area or claiming another benefit such as PIP.
Paying universal credit to only one person in the household is a risky experiment, with scant regard as to what that might mean to victims of domestic violence and their children. There is an insistence that claims in the full service should be made and managed online, despite the fact that the most recent Government figures—from the Department for Business, Innovation and Skills in 2011—show that 5 million people in the UK lack basic literacy skills, 8 million lack basic numeracy skills and nearly 5 million had below entry-level IT skills. Many people on low income cannot afford internet access, or face increased difficulty accessing it because of the closure of libraries and jobcentres over the course of seven years of Conservative austerity. In any case, public libraries are not always the most appropriate places to fill in forms with personal information. We are all aware that broadband access can be even poorer in rural areas.
The list of design flaws is a long one. Then, of course, there are the failures in the implementation of universal credit under this Government. Not only have the Government designed a policy with the six-week delay built into the system, pushing many claimants into debt, but the Government are failing in the delivery too. The Secretary of State boasts that 80% of new claimants are paid on time, but this is hardly something to boast about. By this reckoning, we can expect that 80,000 people will have to wait longer than six weeks to receive their money over the next six months, and 40,000 will have to wait longer than 10 weeks. Surely the Secretary of State does not find that acceptable.
There is a crisis of problem debt, with 8.3 million people in the UK struggling with debt and £200 billion of unsecured consumer credit debts. On Monday, the chief executive of the Financial Conduct Authority warned that increasing numbers of young people are having to borrow to cover basic living costs. One of the most basic living costs of all is housing. Yet, young people aged 18 to 21 do not qualify for any help with housing costs in universal credit full service areas unless there are special circumstances. We now have a complicated patchwork of social security, where people with the same circumstances may have very different entitlement to social security depending on whether they are on legacy benefits or universal credit, and whether they live in a live or a full service area. Even DWP staff often find it difficult to know which benefit people should be claiming.
Despite all those issues, the Government have decided to accelerate the roll-out of universal credit to 50 jobcentres a month, at the same time as closing one in 10 jobcentres across the UK and a number of back offices. There are real question marks over whether the Department has the resources to deliver its universal credit programme, especially in the light of the 800 redundancies it has announced. Other problems include the online system struggling to accept evidence of people’s identity and childcare receipts when they are not on headed note paper. Citizens Advice highlighted the case of a mother who lost her job because she had to stay at home and look after her children when her universal credit was not paid in time.
The Government tell us they have a policy of test and learn when it comes to universal credit. Well, it is certainly testing people who have to wait weeks on end to receive their money. The testing is on real people and the consequences can be devastating, yet we see little evidence of learning—but there is still time and I urge the Secretary of State to learn, because the human cost of failing to take action would be great.
Universal credit was intended to be simpler, but we now have an incredibly complicated system where the nature of someone’s entitlement to social security has become a postcode lottery. It is vital that in the future we have a social security system that is robust enough to serve us well in the face of all the challenges before us, including the current insecurity of the labour market, the changing shape of families and the many challenges automation will bring as we move into the fourth industrial revolution.
The Minister for Employment (Damian Hinds)
We have had a very good debate this afternoon, with fully 75 speeches—passionate, thoughtful and insightful—from Members on both sides of the House. I regret that in the time available I simply cannot respond to all the points made. I will cover as much of the material as possible, but I ask for colleagues’ forbearance in terms of interventions.
The debate may end at 7 pm today, but the discussions will go on. We recognise that some colleagues may have concerns outstanding, especially about vulnerable constituents when they first apply to universal credit. My right hon. Friend the Secretary of State and I will continue to work actively with colleagues to address those concerns and to ensure that, if changes need to be made, they are delivered.
Damian Hinds
I am terribly sorry, particularly to the right hon. Gentleman of all people, but I have less than nine minutes—
Frank Field
I posed the question twice to the Secretary of State. Our local food bank in Birkenhead says that from Christmas onward, it will need 15 tonnes more food because of the roll-out of universal credit. Should local people believe the food bank or the undertaking the Secretary of State gave that it will all be hunky-dory and those are scare tactics?
Damian Hinds
Of course I gave way to the right hon. Gentleman, who is the Chair of the Work and Pensions Committee. To respond to his question, of course we do not expect that to happen. What universal credit does is make it more straightforward for people to go into work at all times of the year. Fundamentally, we are not looking at a great acceleration in the roll-out. I will be happy to follow up with him after the debate. We will provide further progress updates in the weeks ahead and I look forward to active dialogue with colleagues.
Our current system is at once too complex and too uniform. It holds people back because of the perceived risk of ending a benefit claim to go into work, and it is not always obvious how much better off they will be. All too often, once they are in work people are caught by the hours rules in tax credits. I think we have all met people in our surgeries who are stuck on 16 hours a week when they want to be able to get on, progress in their career and provide more for their family. That was illustrated well by my right hon. Friend the Member for Forest of Dean (Mr Harper) and my hon. Friend the Member for Thornbury and Yate (Luke Hall).
Those and similar features have been endemic in our system for decades, and I pay tribute to my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) and Lord Freud for their insight and determination not merely to regret those things but to reform them; not just to critique the system but to change it. My hon. Friend the Member for Charnwood (Edward Argar) put it well when he said that it was not so much that the old system was designed badly, but that as a whole the old system was not designed at all.
The new system, universal credit, simplifies by merging six benefits into one and asking people to deal with only one part of Government, not three. The hon. Member for East Antrim (Sammy Wilson) reminded us of the value of simplicity, which is true both for the individual and for the taxpayer. The core design element is that the system looks back over what someone has earned over a month and automatically adjusts payments based on that. It erases the binary distinction between in work and out, and removes the need to flip from one benefit to another, then back again. The consistent taper rate means that people will always know that they will be better off in work and with every extra pound they earn. Universal credit prepares people for work, helps them into work and helps them to get on in work.
My hon. Friend the Member for Horsham (Jeremy Quin) reminded us what happens when implementation is rushed, as we saw with working tax credit in the early 2000s. By contrast, the implementation of universal credit is happening over nine years. It is now available in the live service version in every part of the country. In July, we introduced the full service to 29 jobcentres across the country; feedback was positive and system performance improved. There has been much talk about pauses. Well, in August and September, we had one of our pre-planned pauses in the roll-out.
These pauses ensure that we do have the opportunity to learn lessons, build improvements into the system, and address any issues. From this month, we will be scaling up roll-outs to about 50 jobcentres a month. After another substantial planned pause in the programme’s roll-out, managed migration begins in in June 2019. The whole roll-out will complete in 2022. It is all being done in a careful, co-ordinated way to ensure that improvements can always be made along the way.
Universal credit is designed to mirror the way that most people in work are paid, which is, these days, monthly. The first payment period is five or six weeks, depending on the individual’s circumstances.
Damian Hinds
I am sorry, but I cannot.
Our latest data show that about 80% of new claims were paid in full and on time, and over 90% of people receive some payment at the due date. Among all claims, 92% are paid in full and 96% are getting some payment by the due date. Advances are available, paid within five working days and, in an emergency, on the same day. They are paid back over six to nine months. For vulnerable claimants, it is possible to have rent paid direct to the landlord, and 34% of social sector tenants on universal credit have this arrangement right now. Our trusted partner system will further streamline the system for landlords to identify tenants who should be on those direct payments. My hon. Friend the Member for Gloucester (Richard Graham) asked about publishing the schedule of when that is coming to different housing associations. I cannot see him in his place, but I say to him that we will do that. Split payments and more frequent payments are also available where needed.
I want to respond very briefly to some of the points made from the Floor. The hon. Member for Birmingham, Yardley (Jess Phillips), whom I cannot see in her place—this important point was also raised by my hon. Friend the Member for Isle of Wight (Mr Seely)—asked about privacy and security arrangements for victims of domestic violence. I will look into that further, and I would welcome the opportunity to discuss it with her.
The question of universal support came up, including from my right hon. Friend the Member for Chingford and Woodford Green. I commit to him that we absolutely continue to focus on that and see the absolute value of it. My hon. Friend the Member for Walsall North (Eddie Hughes) reminded us of the valuable role that can be played by partners, including housing associations.
The hon. Member for Newport East (Jessica Morden) questioned whether we were cutting staff. We are not cutting staff—we are increasing our staffing numbers in parallel with universal credit roll-out. I would like to follow up the specific case she mentioned with her separately, if that is all right. I will also perhaps speak separately about it to the hon. Member for East Lothian (Martin Whitfield).
My hon. Friend the Member for Waveney (Peter Aldous) talked about emergency temporary accommodation. He has been very assiduous on these matters. We have listened to concerns on this, and we are looking closely at it. We will work with the sector to find a solution. We are also looking at the APA—alternative payment arrangement—process in the private rented sector in order to improve it, and we continue to look at the issues around housing benefit debt recovery.
IT access and capability was rightly mentioned by several Members, including my hon. Friend the Member for Eastleigh (Mims Davies). Digital skills are very important. That is why we have the extra support and help in jobcentres, with PCs there. My hon. Friend the Member for Boston and Skegness (Matt Warman) pointed out that those IT skills are also incredibly important these days in applying for jobs and when in work.
The hon. Member for Midlothian (Danielle Rowley) asked about childcare. I can confirm that within universal credit the maximum reimbursable amount rises from 70% to 85%, and that is on top of the doubling of free provision for three-year-olds and four-year-olds. The hon. Member for Glasgow South West (Chris Stephens) asked about premium phone numbers. I share his abhorrence of companies who do this—third parties who pretend to be something they are not. I will work with him to try to find a solution. It is not absolutely clear that anything illegal is going on, but I agree that we must try to find a way to address it.
Many hon. Members made passionate speeches about social justice and child poverty. We heard excellent speeches from my hon. Friends the Members for North East Derbyshire (Lee Rowley), for West Aberdeenshire and Kincardine (Andrew Bowie), for Middlesbrough South and East Cleveland (Mr Clarke), for Angus (Kirstene Hair), for Southport (Damien Moore), for Mansfield (Ben Bradley), and for Totnes (Dr Wollaston). We all care passionately about these subjects. Although it is very welcome that child poverty has come down, there is more to do. We know that work is key. There are 608,000 fewer children in working households since 2010, but universal credit will help further.
Yes, this is a fundamental—
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
claimed to move the closure (Standing Order No. 36.)
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
The House proceeded to a Division.
Mr Speaker
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
Debbie Abrahams
On a point of order, Mr Speaker. This is a major defeat for the Government on their flagship social security programme. Conservative Whips and the Prime Minister have spent the day strong-arming Conservative MPs to vote against a pause in the roll-out of universal credit, while the Secretary of State has retreated on various aspects of his universal credit policy in a panicked attempt to appease Tory MPs who know that the policy is not fit for purpose.
Yet again, the Prime Minister and the Tories cannot command a majority in the House of Commons. The Prime Minister is in office but not in power. Mr Speaker, have you had an indication from the Prime Minister or the Secretary of State that they intend to come to the House and clarify how they will ensure that the Government implement the clearly expressed will of the House to pause the roll-out of universal credit?
Mr Speaker
I am grateful to the hon. Lady for her point of order. The short answer is that I have received no indication as yet that any Minister intends to come to the House to make a statement on that matter, although it is of course open to colleagues to request such.
I should say the following in these relatively unusual—not unprecedented, but relatively unusual—circumstances. There is nothing disorderly about a recorded vote of the House in which there are no Members recorded as voting no. Members who shout “No” when the question is first put must not vote aye, but they are not and cannot be obliged to vote no. As Standing Order No. 39 states:
“A Member is not obliged to vote.”
A Division requires two Tellers on either side and that was the case.
I should add as follows. A resolution of the House of Commons is just that: an expression of the view of the nation’s elected representatives in the House of Commons. This is important and Members need to hear this part of what I have to say. Constitutionally, from my own experience but based also on procedural advice, and as clearly as what I said a few moments ago, the House cannot direct Ministers. It is for Ministers in the Government to decide how to respond to the clearly expressed view of the House. I feel confident that they will do so, bearing in mind the mood of the House expressed in the urgent debate, which I allowed just two weeks ago, on the need for Government respect for the proceedings of the House.
Mr Peter Bone (Wellingborough) (Con)
Further to that point of order, Mr Speaker. Just a slight correction, of course: the Government did not vote against the motion and so could not possibly have lost it. It might be that the Labour deputy Chief Whip will have to be sacked for rebelling against the Labour party line. On a serious point, Sir, would you agree that it would be helpful if there was a convention in the House that where a substantive motion is passed the Government should come to the House, within a reasonable time, and make a statement about what they intend to do about it?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. My response is twofold. First, I do not cavil—I have known him a long time—but I have not been corrected. I have been corrected many times in my life—I make no complaint about that—but I require no correction on this occasion. [Interruption.] Oh, there is a suggestion that somebody else was being corrected. Well, I will not get into that nether region.
Mr Speaker
We will come to the hon. Gentleman. I am saving him up; I would not want to waste him.
What I said was correct. This was the expressed will of the House. If people choose not to take part in a Division, they cannot suddenly say, “Well, we didn’t lose”. We are elected to come to this place to debate and decide what our position is on motions. If people choose not to vote, that is perfectly in order, as I have explained, but the motion was carried. That is not an expression of opinion on my part. It is not an indication of bias, a display of partisanship, a siding with one party or another; it is a statement of fact. The motion was passed. End of subject.
Secondly, I strongly agree with the hon. Gentleman, who has been utterly consistent with what he said the other day. I think it highly desirable that the Government, in the light of the result, should come to the House and show respect for the institution by indicating what they intend to do. It may be that a Minister would wish to do that or the Leader of the House. As we all know in this place, the Leader of the House is not merely the Government’s representative in the House; the Leader of the House has to be the House’s representative in the Government. What I have said is extremely clear, and we will await events patiently, as always.
Pete Wishart
Further to that point of order, Mr Speaker. It is quite clear that the Government’s behaviour is bringing the working arrangements of the House into disrepute. A Minister is not going to come to the House to explain why they did not turn up to vote, but what can you do to help the House compel the Leader of the House to come to the House and make a statement about the Government’s behaviour and refusal to participate in the democratic arrangements of the House?
Mr Speaker
I must be absolutely explicit in response to the hon. Gentleman, for his benefit and that of the House, and the short answer is that it is not within the powers of the Speaker to compel a Minister, including the Leader of the House, to do anything in this situation. We very much depend in this House, this institution, this great place, on conventions, precedent and a sense of respect for the will of the House. He is a very experienced Member of this place and will know that mechanisms are available to him and others, on both sides of the House, to try to secure a governmental response, if they wish. If they do, they will certainly not find the Speaker an obstacle to their endeavours.
Sir Edward Leigh (Gainsborough) (Con)
Further to that point of order, Mr Speaker. I do not quite understand something. For 34 years, I have been trooping through hundreds of Divisions on Wednesdays under successive Labour and Conservative Governments. When I was required to be here for those Divisions, I was under the impression that it served some purpose. What worries me is that surely there is some precedent here. You mentioned precedent a moment ago, Mr Speaker. This is not, and should not be, a university debating society. What is the point of the House of Commons if we just express opinions for the sake of it? Surely, when we vote, it should have some effect. I hope that you will use your influence, through the usual channels, to ensure that the House of Commons is at the centre of our national life.
Mr Speaker
I absolutely respect what the hon. Gentleman has said. There have been occasions on which, for example, Opposition day debates have expressed a view different from that of the Government. I think there was a case some years ago, when the hon. Gentleman’s party was in opposition, in which that party was successful in a motion that it brought to the House, and the policy of the Government changed thereafter; but it is not for me to say that that has to happen. I have tried to tread a delicate path on this matter, and to explain factually to the House what the result of the vote does signify, but equally, in response to the hon. Member for Perth and North Perthshire (Pete Wishart), what it does not automatically signify.
I must say to the hon. Gentleman that it is not for me to seek to compel. What I will say to occupants of the Treasury Bench is that it is blindingly obvious that this is an unusual situation about which there is strong opinion, and I think it would be respectful to the House if a Minister, sooner rather than later, were to come to the House—perhaps after due consideration and collegiate exchange with other members of the Government—to give an indication of the Government’s thinking.
This institution is bigger than any one party, and, frankly, it is bigger than any one Government. This place, and what we do here, matter very much. I know that the Secretary of State will share that view, and will want to reflect on what colleagues have said.
Several hon. Members rose—
Mr Speaker
I will take a couple more points of order. Mr Christian Matheson.
Christian Matheson (City of Chester) (Lab)
On a point of order, Mr Speaker. Just a couple of weeks ago, in the House, the Government changed the rules of the House in respect of the composition of Standing Committees to give themselves an automatic majority. They justified that on the basis that they had a majority in the House, and that that should therefore be reflected in Standing Committees. Since it is now abundantly clear that they no longer believe they have a majority—given that they are running scared of every vote that we put to them—should we not be revisiting the decision made only a couple of weeks ago about the composition of Standing Committees?
Mr Speaker
I understand the point that the hon. Gentleman is making. I hope he will not take offence, but if he does, it is just too bad—[Laughter]—when I say that he has expressed, with his characteristic force and insistence, and no little eloquence, his opinion; however, there is not an automatic link between the two phenomena that he has described. There could be such a link, but it is not automatic. The hon. Gentleman’s mind has raced ahead.
Mr Speaker
I am saving the right hon. Gentleman until last, because he is so senior.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. It deals with the matter of precedent. I am sure you will agree that, historically, there have been plenty of occasions on which the Opposition have been so fed up with the Government that they have boycotted Parliament for some time and not turned up for any Divisions, but it is only this Government who have decided that they are so fed up with losing to the Opposition that they are going to boycott votes in the House of Commons. If we were to craft a motion cleverly, which, for instance, docked a Minister’s pay by, say, £10,000, that would have an effect, would it not?
Mr Speaker
What I will say to the hon. Gentleman is twofold. First, I think it better not to entertain hypothetical questions, or, at any rate, not at this time. Secondly—and I say this with some feeling to the hon. Gentleman, who should know from his own experience the truth of what I say—cleverness can be effective in this place, but it is not invariably so.
Mr Speaker
I was rather minded to say that I would not know, but the hon. Gentleman would. I think we will leave it there for now.
There is also a difference between a motion that binds and a motion that does not. Whether the hon. Gentleman thinks the motion is clever or not, some motions instruct, and can therefore secure an outcome, and others do not. The hon. Gentleman will probably be aware not only of the distinction abstractly, but of what types of motion instruct and what types do not. These matters can be consulted on among colleagues and with professional advisers, but I think I should leave what I have said for now.
Mr Howarth
Further to that point of order, Mr Speaker. You have been admirably clear about the obligation that rests with the Government to address the situation they now find themselves in. Even if that is not cutting a Minister’s salary for not responding, should there not be in our Standing Orders some provision whereby there can be a penalty for simply refusing to respond to the will of this House?
Mr Speaker
It is open to the House to look at its Standing Orders, and potentially to revise them, at any time; that is not for the Chair. I completely understand the sentiment the right hon. Gentleman has expressed, but I leave that to colleagues. I have tried to be absolutely fair on this matter: this motion does matter; it is important; it was passed. As a matter of fact, however, it is not binding. That is the situation.
I simply say to those who are concerned about a statement that there may be a statement tomorrow, and there are means by which people who want to procure a statement can seek to do so if none is proffered. That is just a statement of the facts. The Chair is not seeking to deliver any change tonight or make any commitment. It is not for me to do that. It is for sensible parliamentarians to talk to each other, to reflect on what has happened, to have a regard to the reputation of the institution, and to act accordingly. People are perfectly capable of understanding the significance of what I have said and of deciding, individually or collectively, how to respond, possibly as early as tomorrow.