(7 years, 1 month ago)
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Frank Field (Birkenhead) (Lab)
I beg to move,
That this House notes the First Report of the Work and Pensions Committee, Session 2017-19, Universal Credit: the six week wait, HC 336; and calls on the Government to reduce the standard initial wait for a first Universal Credit payment to one month.
Some of us would not wish to use “roll-out” as an appropriate name for what is happening to universal credit in our constituencies. I thank the Backbench Business Committee for giving us the opportunity to debate this important topic, which affects a growing number of constituents. For my constituents, the horror of the full roll-out of universal credit happened yesterday.
I begin by confessing my inadequacies. When we debate in this great place I am sure most, if not all, of us reflect on how we simply do not have the language to match the task of presenting to the nation, through this Chamber, what is happening. This is the most important debate I have participated in during my nearly 40 years as the Member of Parliament for Birkenhead. I have never felt more acutely the inadequacy of the language I have to try to tell the House of the horror that is now happening to a growing number of my constituents under this so-called welfare reform programme.
So long as I do not get lots of interventions, as I did last Tuesday, I promise to speak briefly on five brief themes: first, the horrors under the existing roll-out of universal credit, before the full roll-out; secondly, the organised chaos that now presents itself in my constituency; thirdly, the national impact of what will be a growing crash and smash in many decent, honourable people’s lives; fourthly, the one reform on which all members of the Select Committee on Work and Pensions agree—this will not be our only report, but given the evidence, and we want to report to the House on the evidence, not on what we think or feel, the biggest change the Government could make is to reduce the initial wait from six weeks to four weeks—and finally, the long-term reforms.
When I saw the Minister at the coffee machine yesterday and he kindly told me that he would reply to the debate, I said that I had already asked the question four times. I am sorry that the Secretary of State for Work and Pensions is not here today, because he has no more important task. However much affection we have for the Minister of State for the seriousness with which he has gone about his career in this House, this issue is of such national importance that for the Secretary of State not to be here says something pretty big.
I have now asked the question five times. The Secretary of State tells me, “Go back home and say it’s all hunky-dory. You don’t have to worry. It’s all going to be rolled out fine.” And I say, “The food bank says we need 15 tonnes more food.” Who are we to believe?
This case began some time ago, but a person who is involved turned to their MP for help yesterday, the day of the full roll-out. It is an historical case of a gentleman who had waited and waited for an operation at our local hospital. That operation took place at the same time as he was told to turn up for an interview at our Jobcentre Plus. He was sanctioned. A friend reported yesterday that this constituent of mine is now homeless and, while homeless, struggling to recover from the surgery.
I will now give five examples of the horrors that are happening in Birkenhead under the existing system. We were told the system would be simplified and manageable. These five cases have come into one MP’s surgery. I do not want to speak for terribly long, but I could raise yards of cases—we could all raise yards of cases—of what is actually happening to our constituents.
Constituent No. 1 made three applications online. When they finally got through, they were told that no application had been received. They were paid six weeks after the third application. The constituent has three children to feed, and they were hungry.
Constituent No. 2 had twice attempted to apply online, and twice the application had been lost. They waited a further eight weeks before receiving money. They were hungry.
Constituent No. 3, who has a four-year-old daughter, waited two months for universal credit to be processed and tried the hotline six times, but was told that a new system was in place—it took several days before they phoned her back. She was then told, “No claim could be found.” Wow! Her payment date was pushed back by a further 11 days. My constituent and her daughter went hungry.
Anna Soubry (Broxtowe) (Con)
These are heartbreaking and unacceptable accounts, but I wonder whether the right hon. Gentleman can help me. When I met the citizens advice bureau in Broxtowe, where we had UC being rolled out in July, I was told that it is now making the arrangements with all relevant authorities so that these very examples do not exist. My question to the right hon. Gentleman is: did these constituents come to him at the end of this ghastly process or earlier? If they had come earlier, they would find that we as MPs all have exactly the access to speed it up. Does he agree that we should be doing this now before it comes out in our areas?
Frank Field
I could not agree more, although I have been here a little longer than the right hon. Lady and I never thought that as an MP I would be speaking like this, about this, with my job being adapted in this way. Of course we have had summits, and we are continuing to have them, bringing all the people together, including Jobcentre Plus, to try to prevent these things from happening. Despite those efforts, these are the cases of horror that are resulting and that I am presenting to the House.
Constituent No. 4 waited 12 months for universal credit. The Secretary of State, bless him, not here today, admitted that some error had occurred. My constituent is sinking in debt, despite the role of citizens advice bureaux, MPs, food banks, and getting welfare rights advisers in—despite all that. Constituent No. 5 was migrated from housing benefit to UC, with their housing benefit stopped immediately. They then waited seven weeks for UC, but when it came there was no housing component. Again, this constituent risks being evicted.
Stella Creasy (Walthamstow) (Lab/Co-op)
My right hon. Friend is making a powerful case. I have already been contacted by constituents terrified about what they are going to do because they have rent arrears, and they know that if those hit £1,000 they will face eviction procedures and that any delay in getting their payments means they will hit that £1,000 mark. So even when the system works perfectly, the inherent delays push these people into debt and eviction, which will cost us all more.
Frank Field
I could not agree more. We will come on to discuss, briefly, I hope, the reforms we want and will push for. I will certainly do that, as perhaps others will. We will review these things in our Select Committee. We must base this on evidence, but the evidence is mounting up.
Peter Kyle (Hove) (Lab)
I do not know whether my right hon. Friend has noticed that The Times reports today that property companies are now doing pre-emptive evictions of tenants who are being moved to UC. [Interruption.] The Times is reporting this today; it is actually happening on the frontline. Will he say a few words about the impact this will have on already vulnerable claimants of UC?
Frank Field
Both those statements made by my hon. Friends from east London and Hove, on the coast, are true, and I am sure they will try to catch your eye, Madam Deputy Speaker.
I move on to the theme of organised chaos. Even if we are working with CABs, every Tom, Dick and Harry organisation seems now to be embedded in the system. Jobcentre officials say that even when the system is up and running, as it is in Birkenhead, claims are closed down in error and it takes several months to rebuild them. There is no money during the rebuilding—
Frank Field
I am anxious that everybody gets in, so may I move on? I have real affection for people who have fought the battle hard on this, but I wish to pursue the matter. Four constituents of mine have had their claims closed down, with the only too imaginable consequences of what it has meant for their lives. The landlord of one of them has said, “I do not want to evict the tenant, however I might be left with no choice.” That tenant has said, “I am behind with not only my rent, but my council tax. All I’ve got to live off is child benefit. The school has been so worried about the welfare of my son that my sister offered to take him in to her household so that he was not taken into care.”
Frank Field
I might give way a little later, but I want everybody to have a chance to speak.
Let us examine how sanctions apply in this system. I wish to give one example of a lad who, after huge difficulty, got a part-time job. We must consider the pride that came with that job; he was walking out in the morning knowing that at end of the week he was going to bring a wage packet back. I point out that this is at the end of the week, Minister, not the end of four weeks or six. There was a transformation in him, but the jobcentre decided that he was not trying hard enough to get a better job, so they sanctioned him and took his money away. He then could not exist on the money from his job. He now has no money and is well on his way to destitution.
So my third theme is: what is the national impact of this slow motion crash for us, but high-speed crash for our constituents? What has the Trussell Trust told us about the impact around the country of this roll-out of universal credit? We must remember that the Trussell Trust is the “trade union”, so to speak, of only half our food banks. It reports that it needs 1,500 additional tonnes of food for the coming year in any case, but that it will need an additional 2,000 tonnes to take on the consequences now of UC. As I have said, in Birkenhead we will need 15 tonnes of food in the coming year. We knew that this, for us, evolving slow crash, coming up over weeks, was going to happen, but in Birkenhead it actually began yesterday.
That is why the Select Committee, of one mind, on the evidence that it received, said that the most important thing the Government could do, of the many things it could do—this was the one thing that stood out from our evidence and we wanted them to do it as quickly as possible—was to reduce the wait from a maximum of six weeks to a maximum of four weeks. The first 133 submissions to the Select Committee told us that the six-week wait is the main force pushing people to having no food, risking everything and the brink of destitution. It is not a surprise, is it, Minister, given that the data from your old Department, the Treasury, tell us that more than half of low-income and middle-income families have no savings at all to fall back on? Two thirds of us have less than a month’s savings to tide us over a crisis.
Let us consider the very idea that these families—the most vulnerable people that we have the honour to represent in this House—can wait for six weeks. In the cold light of day, one wonders how any decent set of people—[Interruption.] The great architect of this reform is not in this place, although he was here earlier—I refer to the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). Could he ever have really wanted this result for this reform? I hope he is going to come back and tell us that when he failed to fend off cuts from the previous Chancellor of the Exchequer he could never have envisaged that this reform of noble intent should end in these personal nightmares for our constituents.
The Select Committee does not yet have evidence on this—we may get the evidence to persuade us to publish a united report—but for me there seem to be five obvious reforms that we need to build into universal credit, in addition to that four-week wait. First, if Scotland can have two-weekly payments, why cannot England? Northern Ireland is going to get payments every two weeks; why cannot Wales? I thank Scotland for negotiating a subcontracted agreement to show that what was thought to be impossible is indeed possible, once due pressure is applied. I offer huge thanks for that.
Secondly, we want rents to be paid directly to landlords, if people wish.
Thirdly, we want the DWP automatically to tell local authorities and housing associations that their tenants will be pushed into debt. I do not think that is our or the citizens advice bureaux’ job; it is the Department’s job.
Fourthly, under the current system babies and toddlers are going without Healthy Start vouchers and children are going without free school meals because the data that was previously held separately and could be given to local authorities is now held in the universal credit system and not given to local authorities. Can that terrible nonsense please come to an end?
Lastly, my colleagues and I had a fight when the Government removed from the statute book the duty of the Secretary of State for Work and Pensions to promote claimants’ welfare. The Government said that it was not necessary and that they were tidying up the statute book—“We’re all in favour. Who could possibly be against promoting the welfare of claimants?” My argument was that if it is so unnecessary, let us just leave it on the statute book, in case. The current sanctions policy could never, ever have worked if that duty on the Secretary of State had existed, because the Secretary of State delegates to every person who works in DWP offices, and they would have to carry out that discretion on the Secretary of State’s behalf.
The House knows that I was as tough as old boots on the need for sanctions—people should have to abide by the rules—but the idea that we have sanctions without anybody in the office being able to exercise discretion is appalling. Imagine being an officer to whom somebody says, “You can ring the hospital and find I was actually on the operating table when you wanted me here for an interview. Please don’t sanction me!”, but the sanction is applied automatically because there is no discretion. That should end.
I plead with the unbelievably decent Minister for Employment: I want those mutterings of his—when he says that he is appalled, that this does not need to happen and that he can explain why it is not going to happen—to be on the record when he replies. I also ask this of Ministers on the Treasury Bench for the fifth time: the Government tell me that the roll-out of universal credit in Birkenhead is going hunky-dory—that all the things I have tried to represent and all the pleas from the food bank to raise 15 tonnes more food is scaremongering—so will the Minister say whether the Government are still as confident as they were when I first asked the question many months ahead of the roll-out? Or should I go home and roll up my sleeves with those at the food bank who are trying to collect 15 tonnes more food to prevent families from being engulfed, this Christmas and beyond, by hunger of undue proportions? This is a national scandal that the Government could stop. Will they stop it, please?
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I am delighted to call to make his maiden speech Mr David Duguid.
David Duguid (Banff and Buchan) (Con)
Thank you, Madam Deputy Speaker—and thanks for pronouncing my name so well!
I congratulate the right hon. Member for Birkenhead (Frank Field) on securing this debate and welcome this opportunity to make my maiden speech. It is quite timely, because in just the past couple of weeks I have started engaging with my local Citizens Advice office and jobcentres on this very subject in preparation for the roll-out of universal credit in my Banff and Buchan constituency in March, in much the same way as my right hon. Friend the Member for Broxtowe (Anna Soubry) described earlier.
I am proud and honoured to have been elected by the people of Banff and Buchan to represent them in this place. I totally agree with my hon. Friends who have spoken before me about the beauty of their Scottish constituencies. However, as I am the last Scottish Conservative to deliver my maiden speech, I can now say definitively that Banff and Buchan is indeed the most beautiful.
I wish to take this opportunity to pay tribute to my predecessor, Dr Eilidh Whiteford. Eilidh represented Banff and Buchan in this House for seven years. She worked hard for her constituents, as well as here in Parliament. Earlier this year, she became the first Scottish National party Member of Parliament to have a private Member’s Bill passed into statute. Her Bill enhanced protection for victims of domestic abuse in line with the Istanbul convention. I am sure that the whole House will join me in thanking Eilidh for her contribution and wishing her well in the future.
The election results in June made it clear to me and my colleagues from the north-east of Scotland that the people there do not want another independence referendum. On top of that, regardless of how they voted in the EU referendum—for Members’ information, my constituency did vote to leave the European Union—the electorate in Banff and Buchan made it clear that they wanted the Government to get on and deliver Brexit. I committed to do all I could to support and influence the Government in getting the best possible Brexit deal for Scotland.
Leaving the EU presents great opportunities for the two main industries that define my constituency: fishing and farming. As we leave the EU, we will leave the common fisheries policy and, as we do so, we will regain complete control over access to our fishing waters out to 200 nautical miles or the median between two countries. In Banff and Buchan, we have two of the largest fishing ports in Europe: Peterhead and Fraserburgh. Peterhead is also a major port supplying the North sea oil and gas industry as well as, more recently, offshore wind projects. Seafood processing is a major industry in my constituency, with our produce exported across the UK, Europe and beyond, including to North America and Australia.
The other key industry in my constituency is of course agriculture. I am bound to say that Banff and Buchan has some of the best grazing land available, and that helps to produce some of the best Scotch beef and lamb. Of course, the topic of food and drink in Scotland cannot pass without a mention of Scotch whisky. Although there are relatively few distilleries in Banff and Buchan, much of the best malting barley is grown there.
Many of my constituents and others across the north-east of Scotland are employed, as I was for the previous 25 years, in the oil and gas industry. Workers from across north-east Scotland commute to Aberdeen or work offshore. Many work in related engineering, manufacturing and service businesses located around the north-east, not just in Aberdeen. Many of those businesses were started by local entrepreneurs, are still family owned and have grown into some of the biggest employers in the area. Indeed, some have won UK awards for their focus on the training and development of young people and apprentices.
I find it incredible that a constituency that is home to so many entrepreneurs and small and medium-sized businesses, and that contributes so greatly to the food and drink and energy sectors, has one of slowest average broadband speeds in the country. The average download speed across Banff and Buchan of 6 megabits per second can only be dreamed of by many of my constituents who are struggling to get speeds of 1 or 2 megabits per second, if they get any at all. That lack of connectivity hampers business growth and discourages people from coming to live in the area, so one of my top priorities is to pressure Governments on both sides of the border to work towards delivering an acceptable minimum broadband performance across rural Banff and Buchan, not just in the towns.
We live in an age when more and more of our services are provided online. However, while those online services increasingly become the norm, including when applying for universal credit, many people still do not have adequate access to broadband internet. That is simply unacceptable. A decent broadband service is rapidly becoming essential for every business, school, hospital and household, wherever they may be located.
Another growth opportunity in Banff and Buchan is tourism. Our coast across the north-east of Scotland is like no other on the British Isles. Rugged cliffs are home to a wealth of birdlife, including Scotland’s only mainland gannet colony at Troup Head.
David Duguid
You are all most welcome.
Our shoreline is regularly visited by porpoises and dolphins, and even the occasional humpback or killer whale.
In summary, Banff and Buchan is a great place to live in and to visit. However, the standard of some of our public services, particularly education and health, has taken a bit of a hit in recent years under a SNP Government who are obsessed with pursuing independence at any cost.
Our town centres are much in need of regeneration, with many shops and offices lying empty, particularly in coastal areas. For that reason, I decided to locate my constituency office in the old county town of Banff.
In conclusion, like Opposition Members, I welcome the opportunity to have strong voices—Scottish voices—in this House. With that said, I am especially glad to be one of the 12 additional Scottish Conservative voices on the Government Benches.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It will be obvious to the House that a great many people wish to speak. We have limited time, so there will be an immediate time limit of six minutes.
Mr Steve Reed (Croydon North) (Lab/Co-op)
I congratulate the hon. Member for Banff and Buchan (David Duguid) on a really powerful maiden speech. He made a good case for getting up to visit Banff and Buchan, so I will be booking a trip there as soon as possible to taste the whisky and see the wildlife that he talked about. He is a wonderful advocate for the area.
The hon. Gentleman also looked incredibly confident and relaxed as he gave his speech. I think back to how nervous I felt when I gave my maiden speech, but he made his like an old pro—[Interruption.] Seasoned might be a better term. We can look forward to many more excellent contributions from him and I wish him very well in his career in this House.
I thank my right hon. Friend the Member for Birkenhead (Frank Field), who is no longer in the Chamber, for securing this important debate. Croydon was one of the first boroughs to experience the roll out of universal credit, so we have had longer to see what a total and utter disaster it is. A long and growing stream of people have come to my office, many of whom have been close to tears because universal credit has forced them into debt. It has made it harder for them to stay in work and left many of them facing eviction for rent arrears.
Our local council has had to spend £3 million so far to stop people from being evicted because of late rent payments. Local food banks are running out of food because of the vast increase in demand from people who are going hungry because of what the Government’s scheme has done to them. More than 1,000 tenants in Croydon have over three months’ rent arrears and are at risk of losing their home because of the failures of universal credit.
Stephen Timms
Does my hon. Friend agree that one of the problems—it is certainly not the only one—although it is denied by Ministers, is the fact that the IT system for universal credit is not yet working properly?
Mr Reed
I absolutely agree with my right hon. Friend. I cannot for the life of me understand why the Government insist on ploughing ahead when it is quite clear that the IT system is not fit for purpose. They should pause the process and fix that before they inflict this damage on any more people.
According to my council’s figures, a tenant on housing benefit—the legacy system—had an average rent account that was £42 in credit. Under universal credit, a tenant has an average balance of £722 in arrears. This is supposed to be a system that helps low-income families, but it is instead forcing them into debt and out of their homes.
I wish to share just a few short examples from my own casework, and I suspect that we will hear many, many more throughout the debate. One constituent told me that he had £1,400 of debt and two months’ rent arrears because of errors with her universal credit. She had no money to buy food for her family or to heat her home.
A mother of five children was left waiting nine weeks for her first payment. She works part time and is desperate to keep working. She wants to do exactly what the Government tell her that she should be doing, but the new system has let her down and pushed her into debt.
A pregnant mother with two young children came to see me. She was not eating properly because of debt, which posed a serious risk to not only herself, but her unborn child. She had no option but to take out several high-interest payday loans and has been threatened with eviction because of underpayments. It is outrageous to leave anyone in those circumstances, let alone a pregnant woman.
Severely disabled people face the particular problem that universal credit does not include a severe disability premium. Although the Work and Pensions Committee raised its concerns about precisely that earlier this year, as yet the Government have done absolutely nothing.
Under the current system, a person with severe disabilities in receipt of income-related employment and support allowance with a severe disability premium gets £172 a week. Under universal credit, that is cut to just £146 a week. I became aware of that when our citizens advice bureau referred to me the case of a claimant with severe mental ill health who was moved on to universal credit when he became liable for housing costs. The effect was that he lost more than £100 from his benefits to cover his living expenses, and he had no transitional protection because he had experienced a change of circumstances. When a person has so little income, financial loss on such a scale is utterly devastating.
Universal credit is an unmitigated disaster for hundreds of the most vulnerable people in Croydon North. If the roll-out continues before the system is fixed, those hundreds will become thousands. People just cannot cope. What kind of system penalises the poor, and forces people out of jobs and on to benefits and into food banks? The Secretary of State for Work and Pensions and the Minister for Employment must do what this House instructed them to do in a recent vote: pause and fix the system before it devastates any more lives.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I am grateful to be called so early in this debate. It is a pleasure to speak on this important matter. I pay tribute to my hon. Friend the Member for Banff and Buchan (David Duguid) for his maiden speech. I agree with what the hon. Member for Croydon North (Mr Reed) said about the speech, save in one respect: my hon. Friend gave the confident speech of a young professional. He paid generous tribute to his predecessor. I particularly appreciated his comments on broadband, and I look forward to campaigning alongside him to ensure that all of our rural areas have adequate access to broadband. I look forward to his further contributions in this place.
I am pleased that this is the third or fourth such debate that we have had in the past month, because it gives me the opportunity to reiterate my strong support for universal credit. Like most people on both sides of the House, I am firmly of the view that work should always pay. That is the principle that underlines universal credit. Government Members are passionate about ensuring that more people get into work, that they are supported into work and that, once they are there, they get on and get ever more work both in terms of hours and quality.
Peter Kyle
Does the hon. Gentleman remember the early days of when universal credit was first mooted? At that time, the Labour party was supportive of the concept, but said that universal credit needed to be rolled out over a period longer than one Parliament, and that much more detailed piloting would be needed to get the system right. Those are the things that have gone wrong, and they are inflicting misery on our constituents.
Michael Tomlinson
I will come back to the Labour party’s record on rolling out benefits in due course, but the hon. Gentleman makes an important point. I wish that Labour Members would speak up more loudly with their support for the principle behind universal credit, because at the moment it sounds like they are calling for not a delay or a pause, but a scrap. The Labour party has opposed every single benefit change that this Government have brought into effect, and the cost of its position would have been tens of billions of pounds. However, this is not about the money. More importantly, it is about the people, and universal credit is about encouraging people into work.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
I am really pleased to hear that the hon. Gentleman is supporting universal credit, although he failed to vote in favour of it the other week. Would he also support a renewed project to study how universal credit supports people to get into work? The Department for Work and Pensions has delayed and denied an opportunity to review the original study to prove whether universal credit is still working, because lots of people expect that it is not.
Michael Tomlinson
Perhaps the Minister will respond to the hon. Gentleman’s point in due course.
I chair the all-party group on youth employment, so I want to use any mechanism available to encourage young people—everyone, in fact—to get into work. [Interruption.] Perhaps the hon. Member for Bermondsey and Old Southwark (Neil Coyle) could listen to my response, rather than just shaking his head and taking part in exchanges across the Chamber.
Neil Coyle
The Minister is chuntering, so I cannot hear the hon. Gentleman.
Michael Tomlinson
Forgive me; I will speak up. If the hon. Gentleman stops talking, however, he might be able to hear a little more easily. He is more than welcome to come along to the meetings of the all-party group. We met yesterday, which was the date on which the latest Office for National Statistics employment figures came out. We track those figures each month. It was pleasing to see that there are still record numbers for youth employment and record lows of young people who are out of work. The youth unemployment rate of 11.9% is in touching distance of the lowest ever figure on comparable records, and it is almost half the youth unemployment rate of over 22% in 2011, which followed the disastrous Labour Government.
Rachel Maclean (Redditch) (Con)
Recent forecasts show that universal credit will create 400 jobs in every constituency across the country. Does my hon. Friend welcome that, as I do, given the great work that he is doing?
Michael Tomlinson
I warmly welcome it. I look forward to the time when we look back and say that universal credit has been a success. Now, do not get me wrong. We are not trying to pretend that all is rosy and that there are no errors—quite the opposite. Government Members, as much as Opposition Members—well, certainly Government Members—want to ensure that universal credit works. I encourage the Minister, who will listen as I am sure he always does, to ensure that he is testing and learning, and that we are constantly improving the system.
I support any principle that encourages more people into work. In response to the intervention made by the hon. Member for Hove (Peter Kyle), I threatened to speak about the Labour party’s record. The hon. Gentleman is just about to leave the Chamber, but it does not matter, as he can read this in Hansard tomorrow—[Interruption.] Ah, he has sat down. When the Labour party was in power, a member of my community told me that he had chosen not to take a job because it would not have been worth his while, due to the risk to his benefits and, therefore, to him. I do not blame him. He made a perfectly calculated, sensible and rational decision, but he chose not to take a job because of the Labour Government’s policy.
Kate Green (Stretford and Urmston) (Lab)
If work incentives were so poor under Labour, perhaps the hon. Gentleman will explain why lone parent employment increased from 44% in 1994 to 57% when we left office.
Michael Tomlinson
The hon. Lady intervened on me during our last debate on this subject. It is always a pleasure to lock horns with her in a constructive fashion. The last time she challenged me, she said, “How about those young people in poverty?” I did not have the figures on poverty to hand at the time but, if the hon. Lady looks at them, she will see that there are 600,000 fewer people—I will check that figure—in absolute poverty this year. Under the old system, for the constituent I mentioned, it did not pay for him to go to work. Under universal credit, the principle should be that work always pays.
Michael Tomlinson
In one moment.
We remember the fiasco of tax credits, with £7.3 billion of overpayments, and we remember the misery that was caused. The hon. Member for Hove referred to the speed with which universal credit has been rolled out. Actually, the lesson to be learned is not to roll out a scheme in a big-bang fashion, as happened with tax credits, when £2.7 billion then had to be clawed back from the poorest and most vulnerable in society. I was a new Member of Parliament in 2015, when people were still feeling the repercussions of that old system.
Michael Tomlinson
I will not. I only have a minute and a half left, and I do not get any more time.
The right hon. Member for Birkenhead (Frank Field) referred to two-weekly payments. Will the Minister tell us the number of people in employment who actually receive such payments? My suspicion is that it is a very low proportion, but I want the Minister to tackle that point directly, as he was asked the question by the right hon. Gentleman. In particular, I want the Minister to continue to listen and learn, and to ensure that it always pays to be in work rather than on benefits.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Just to help the situation, I will drop the speaking limit to five minutes because of the number of interventions. If people continue to intervene, which I do not want to stop, they must understand that they will go to the bottom of the list in order to ensure that those who have not spoken get their chance. That includes you, Helen Goodman.
Chris Stephens (Glasgow South West) (SNP)
I congratulate the hon. Member for Banff and Buchan (David Duguid) on his maiden speech. He is still to be persuaded on the merits of Scottish independence, and I look forward to debating them with him in the next few years. I thank him for paying a generous tribute to his predecessor, Eilidh Whiteford; I am sure that all Scottish National party Members appreciate that.
As a member of the Select Committee on Work and Pensions, let me start by saying that Glasgow is a city where words often have more than one meaning, and in attempting to sum up this Government’s approach to social security benefits and universal credit, I would use the word “ignorant”. Now, Government Members may not agree with that characterisation. They may even point out that the architect of universal credit, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), made a point of visiting Easterhouse in Glasgow in 2002. But, of course, the Government are closing the jobcentre in Easterhouse this year.
Anna Soubry
I was a member of the Select Committee on Scottish Affairs when we discussed the situation of the Glasgow jobcentres. Will the hon. Gentleman confirm that Glasgow had somewhere in the region of 16 jobcentres and that the DWP’s very excellent proposal—in fact, it was not radical enough, in my view—was to reduce that number to eight? We compared the number of jobcentres in comparable cities in other parts of the country that had comparable employment rates, and they often had two or three jobcentres, as opposed to eight.
Chris Stephens
The evidence that was used by the Government to justify closing those jobcentres was based on information that did not exist. They were using Google Maps when they should have been using the First Bus app that would have told them that closing jobcentres means a complicated, multi-bus, hour-long journey from Easterhouse to Shettleston.
The Government were faced with all the evidence provided by Members in this place through debate and questions; they were faced with all the evidence provided to the Work and Pensions Committee by a wide range of people and organisations dealing with the impact of universal credit; and they were faced with a report from that Committee clearly outlining where the implementation is going seriously wrong. But even when faced with all that information, the Government continue to argue a line that, in my city, we would call ignorant. When that word is used in Glasgow it does not mean someone who does not know all the facts, someone who does not know any better or someone who needs advice on how to act. No, ignorant—as in “pure dead ignorant”—means someone who knows all the facts and knows what should be done, but chooses to do whatever they want despite it being wrongheaded and damaging to others.
I fully expect, and we have already heard, the tired old Government line about the policy of universal credit as having been welcomed. It is even on the top line of the Work and Pensions Committee report that universal credit is a good idea in principle. But—this cannot be emphasised enough and the report clearly confirms this—it is the design and operation in practice that is deeply and utterly flawed.
Reports of a rethink or U-turn on the waiting time for universal credit were trailed in the media yesterday, but frankly do not seem to present as a clear commitment to reduce to the four weeks maximum. Oddly enough, there was some link between this story and next week’s Budget. I can only assume what many of us have suspected, which is that universal credit is less to do with supporting people into employment and more to do with cutting the benefits bill, and that any changes are a Treasury call.
The Public and Commercial Services Union has clearly outlined how universal credit actually works, as opposed to the fantasy-island wishful thinking of the so-called reforms to the benefits system. The pressure on staff members is intense, with one in 10 who work directly with universal credit claims leaving—double what is considered normal. The DWP employs 30,000 fewer staff than in 2010. If the Government are meant to be in the job-creation business, that certainly does not appear to be in their own backyard—the civil service.
Jobcentre closures and lack of internet access, or digital exclusion, all put a severe strain on claimants and staff. I welcome the dropping of telephone call charges, not just because they are the result of campaigning against the telephone tax, but because they are an indication that someone somewhere recognises that something has to give.
The current situation is unsustainable. The roll-out has to be paused if there is to be any hope of making this work. As universal credit follows on from the implementation of personal independence payments, which inflicted real hardship and humiliation on many disabled people, it is hard not to join the dots and to work out that the Government view benefits as a budget problem to be solved by actively making claiming more difficult.
The changes to benefits are part of a cuts agenda. The budget for universal credit is nearly £3 billion a year less than the budget for the system it replaces. No wonder it has in-built delays to payments: every day that every pound that is rightly owed to claimants is held in Treasury accounts, the poorest and most vulnerable in society are subsidising Government expenditure, while offshore tax avoiders pay their accountants but not their taxes.
The Work and Pensions Committee report is the first in a series and is focused on the terrible impact the six-week wait has on claimants. It also identifies problems with advance payments, which start a claimant off in debt—if they are not already in debt. There are also clear situations where housing associations do not know that their tenants are on universal credit, and I hope the Government will focus on that.
I am calling for the Government to cut the waiting time for universal credit and to pause the roll-out. Glasgow will be the last major city in the UK to be subject to the full service roll-out, but how many thousands of families, children and vulnerable people will have to suffer and starve before we get to that point? If a 10th of the resource that is put into chasing benefit fraud were put into chasing tax avoiders, how much more resource would we have so that we could truly support working people and enable people to work, rather than cutting off their lifelines?
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I pay tribute to my hon. Friend the Member for Banff and Buchan (David Duguid), although I take issue with his claim to have the most beautiful seat in Scotland; indeed, I would take issue with the claim that he had the most beautiful seat in Aberdeenshire. Now that I know that that is where the gannets are coming from, perhaps he could do us all a favour in the southernmost part of the county and keep them up north. I would be very grateful indeed if he could do that.
This is the third time in four weeks that we have debated universal credit in this Chamber. That is not a bad thing. Indeed, this issue affects many of our constituents, and it is arguably the biggest reform to welfare since the Beveridge report in the 1940s, so it is right that we spend our time debating it.
I am incredibly lucky at this stage in my parliamentary career to serve on the Work and Pensions Committee, under the chairmanship of the right hon. Member for Birkenhead (Frank Field), whose skill in chairing it is a lesson in how to drive a debate. I sit alongside some incredibly passionate and learned MPs from all persuasions. What unites us is the desire to get to the nub of some of the biggest problems and issues facing our welfare system, to get answers and to find out how we can make the system better for our constituents, who rely on it. I hope, and I think, that that comes through in the report.
We all, I hope, believe in universal credit, and we all will it to work. The first page of the report states:
“Universal Credit has great merits as an idea. It aims to…simplify an overcomplicated welfare system by combining six different benefits in one…improve incentives for people to start paid work or increase their hours”
and
“ease the move into work, partly by mirroring the world of work in its operation.”
The report goes on to say:
“Implemented properly, Universal Credit has the potential to have a genuinely transformative effect on the labour market and make a valuable contribution to reducing poverty.”
I, for one, believe that universal credit is working and can work.
As I have said before in the House, the “Universal Credit at Work” report found that 71% of people claiming universal credit found work within the first nine months of their claim—a rate 8% higher than that for the comparable jobseeker’s allowance. People claiming universal credit on the live service were three percentage points more likely to be in work after three months than those claiming JSA and four percentage points more likely to be in work six months after starting their claim. These numbers look small, but actually signify many thousands of lives that are dramatically improved by this policy.
Out there and in here, however, there are genuine and serious concerns surrounding elements of the roll-out—specifically the six-week wait for the first payment, and it would be entirely remiss of us, as a Select Committee and as a House, to ignore those. The Committee heard and stated in the report we are debating that the six-week wait has been associated with increases in rent arrears, problem debt and food bank use. It urges the Government to aim—aim—to reduce the standard waiting time for a first universal credit payment to one month.
It would be entirely remiss of us not to acknowledge, however, that the Government have been proactive in trying to find solutions for those of our constituents who need help the most or who cannot wait till the end of the six-week period as it stands now. In October, in his speech to the Conservative party conference, the Secretary of State announced that the DWP would make advance payments of universal credit more readily available to those who needed them. As the report says, we were all impressed on our visit to London Bridge jobcentre by the ease and speed with which an advance payment could be granted.
This debate is not supposed to be about whether we should pause or stop the roll-out of universal credit, as other debates on this issue have been; it is supposed to be on the content of the report presented by the Work and Pensions Committee. I feel that the report is balanced and seeks to give recommendations to the Government, rather than unduly to criticise what we all want to be a successful roll-out of a transformational welfare benefit, and that is right. I believe that the Government are listening and are doing what we all, I think, want them to do—to press ahead cautiously, learning and evolving, testing and refining.
Vicky Ford
I thank my hon. Friend for listening on this issue, and I am listening hard because universal credit is soon to come to my constituency. I am pleased to hear him say that the advance payments help with the six-week gap. Has he looked at the repayment period for these advance payments, and is there enough flexibility in their repayment, especially for people who are challenged in getting back to work?
Andrew Bowie
I thank my hon. Friend for her intervention. I will be blunt and honest and say that I have not looked at that in great detail, but I will do so and get back to her.
I was saying that the Government are listening and should be doing what we want them to do, which is to press cautiously ahead with the roll-out, learning and evolving, testing and refining the system as it continues to deliver this important benefit to the people of the United Kingdom.
Melanie Onn (Great Grimsby) (Lab)
I congratulate the hon. Member for Banff and Buchan (David Duguid) on an excellent maiden speech. I also congratulate my right hon. Friend the Member for Birkenhead (Frank Field) on securing this debate.
At Prime Minister’s questions yesterday, my right hon. Friend the Leader of the Opposition raised the issue of a letting agency in my constituency that has issued all its tenants with a notice of eviction, in anticipation of the universal credit roll-out beginning next month. It is effectively a pre-emptive notice of eviction, as my hon. Friend the Member for Hove (Peter Kyle), who is no longer in his place, mentioned in an intervention. That notice means that any constituent who falls into rent arrears as a result of the delays in their welfare payments can be evicted without notice. The roll-out of universal credit in my constituency is due on 13 December for all new claimants. Because of the issuing date of the notice, the earliest that people could find themselves at risk of eviction is mid-January. Because the notice has already been served, people could be evicted without notice from mid-January to mid-May, at which point the notice expires, and I assume the plan will then be to re-issue it. The constituent who first contacted me about this said she feels “utterly helpless” and “heartsick”. This is an absolutely outrageous way to treat people.
Melanie Onn
The notice will have left all those who received it stressed and worried for their futures.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Member for Chelmsford (Vicky Ford) can ask to intervene, but she cannot remain on her feet.
Melanie Onn
I was really disappointed that the Prime Minister did not condemn that letter in the Chamber yesterday, and I invite the Minister to do that today. Rather than acknowledging the impact this policy is clearly having, she waxed and waned about the fact that she had not seen a copy of the letter. Well, I have the letter here, and I am very happy to hand it over to the Minister once I have finished my speech, so that he has a chance to read it for himself, if he has not done so already. The letter appears to be a blatant attempt to circumvent the laws passed in the Housing Act 1988 and the Deregulation Act 2015, which require two months’ notice to be given to tenants before an eviction can be carried out.
Vicky Ford
I thank the hon. Lady for giving way. A number of us on the Conservative Benches would like to join her in condemning that letter, which we believe is illegal, and we would like to have a copy. Has she actually met the housing association to tell them that it is not legal?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The letter is becoming quite contentious. I am sure that it can be passed to the Minister.
Melanie Onn
Thank you, Mr Deputy Speaker.
I need to make it absolutely clear that this is about the private rental sector; it is not about a housing association. Conservative Members may well feel that this is illegal and I know that one of them condemned the intervention that was made earlier about the fact that they believed this to be illegal. I received some completely unsolicited legal advice—lawyers in housing contacted me—to the effect that this is not illegal. It is completely legitimate; nothing prohibits it. One of the big issues would be that even if it were illegal, many of these people would not have the capabilities to seek legal redress. That is a real issue.
Melanie Onn
Despite the very clear moral questions around this action, I am advised that it remains a lawful way of operating. I have even had some indication that some landlords are issuing these notices at the outset of tenancies, which is really quite frightening—a much bigger issue than that which we are discussing here today. I really hope that the Government will look at closing this loophole in future. I am happy to share the information. It is online; it is on my Facebook page. People are very welcome to look at that.
The Government said that my Opposition colleagues and I were guilty of scaremongering when we warned that rolling out universal credit would lead to people going into debt or being evicted from their properties. Well, it is not just us who are making that claim; it is charities, councils and housing associations. It is the statistical evidence from the areas where universal credit has been piloted, and now it is the letting agencies, too. My local housing association, Shoreline Housing Partnership, has 182 tenants who have already gone on to universal credit. Of those, 145 are in rent arrears of an average of £400. That is 80% of them. When universal credit is fully rolled out, the housing association expects the total debt from tenants to increase to £2.2 million.
Martin Whitfield (East Lothian) (Lab)
Does my hon. Friend agree that it would help if the Government were to extend the implied consent, so that third sector organisations such as housing associations, but more importantly citizens advice bureau and welfare advisers, could give support and advice to people on universal credit without first having to jump through dozens of hoops to speak with the universal credit managers?
Melanie Onn
I thank my hon. Friend. That is an excellent idea, which I hope the Minister will consider carefully and respond to.
My local housing association anticipates an increase in possession orders and evictions. It expects the condition of its properties to deteriorate as tenants opt to eat rather than heat. The Library estimates that more than 13,000 people living in Great Grimsby will be eligible for universal credit once it is fully implemented, so I am sure that everyone will understand that I am really concerned that people in my town will pay a heavy price if the system does not work.
The warnings against pushing ahead with this roll-out now are loud and clear. The Government cannot feign ignorance of what is likely to come. If they go ahead next month in my constituency as planned, they will knowingly be putting more people at risk of debt, eviction and homelessness, and that, for me, really sits at odds with their much-heralded and noisily launched Homelessness Reduction Act 2017, because it appears as though two areas of policy are at complete odds with each other. That is the test: which is more important to them? I am pleading with the Government today to listen, press pause on the roll-out and get this right before moving ahead.
Heidi Allen (South Cambridgeshire) (Con)
Thank you, Mr Deputy Speaker, for allowing me to speak in this important debate. My congratulations to the hon. Member for Banff and Buchan (David Duguid): may I have some dolphins for South Cambridgeshire, please? I am not sure where we would put them, but we would take great care of them. I also sincerely thank the right hon. Member for Birkenhead (Frank Field) for securing this debate via the Backbench Business Committee and for working so closely in cross-party partnership with me on an issue that is very important to us both.
Members, including Ministers, will know that I fully support universal credit and believe that, when it is fully implemented, it will be the most positive transformation of our benefit system in decades. As an employer, I remember only too well the weaknesses of the old system—the 16-hour cliff-edge that limited employees’ ability to take on more hours, knowing they would be worse off. I was reminded of that in a conversation last week with a constituent. The full service universal credit system has not yet come to my local jobcentre in Cambridge. She does not want to take any more hours now because of that. What kind of a benefit trap is that? Surely, no one in the House can support a benefit system that actively discourages progression in work.
Universal credit will be different, and where the live service—the basic system for single, uncomplicated jobseekers—has been rolled out, it is different. We see more people moving into and upwards in work. However, it is without doubt the full service—that is, the full universal credit system which will support families, parents and those with caring responsibilities, health conditions and disabilities—that causes many of us concern.
I appreciate that such a huge transformation in operation will come with challenges and that the “test and learn” approach is commonplace in IT projects; but the crucial difference is that the subject of this project is someone’s life. This is about people; it is about real lives. Get it right and the potential is huge, but get it wrong and the risks are simply too great. They may manifest themselves —I will say it—in debt and in hunger. So it is right that Ministers have opted to roll universal credit out slowly, steadily, carefully, because there have been unacceptable delays in claimants’ first payments. The long-awaited landlord portal should have come sooner. I wish that we had had a freephone number for everyone from the beginning. There remain parts of the system that are incomplete—the minimum income floor for the self-employed and the evidence-gathering process for childcare costs need further development.
If I am honest, I believe the system will never reach its truly intended potential as the ultimate poverty-fighting machine until either the taper rate is reduced or work allowances are restored to their original pre-2015 levels.
I thank the Chancellor for reducing the taper rate by 2% in the last Budget. It cost a lot of money—£1 billion—but every penny really does matter to those living on the lowest incomes. Single parents and second parents returning to work will be worse off now than they would have been under the old system. An in-work couple will lose about £1,370 a year due to the benefits freeze and work allowance cuts. Are they not the very people we should be encouraging to get into work?
Tight fiscal discipline, razor-sharp focusing of precious resources, precise and meaningful interventions, smart thinking—that is what this Government do well. We could find the money by reversing the decision to raise the basic income tax allowance from £11,000 to £12,500 for all; but would it not be better to focus that money on those who really need it? I do not need it. I suspect Opposition Members do not need it. Not everyone needs it.
If we want universal credit to be exactly like the world of work, it has to operate like the world of work. Can any Minister or civil servant honestly say that waiting six weeks for your first payment is normal? So, from my universal credit wish list, one ask stands head and shoulders above the rest: we must get the six-week wait down.
I remain grateful to the Prime Minister for agreeing to meet me so soon after my question in the Chamber, and I appreciate the diligence and receptiveness of the Secretary of State, the Chancellor and the Minister in hearing our concerns. Members on both sides of the House, our cross-party Work and Pensions Committee, peers, charities, the Children’s Commissioner and, most important of all, our constituents have raised concerns. We cannot all be wrong. The six-week wait must be reduced to a month. When we stopped the cuts to tax credits in 2015, halted further cuts to PIP in 2016 and put £1 billion back into the taper rate last year, they were the right things to do. They demonstrated the good that Government can do.
Nigel Huddleston (Mid Worcestershire) (Con)
As well as making recommendations about what the Government can do, recommendations that are, I think, sincerely meant and will, I am sure, be taken on board by the Minister, does my hon. Friend agree—this has been mentioned by others in the House today—that other parties, including immoral big letting agencies, also need to act in this sphere?
Heidi Allen
Absolutely. System changes of this magnitude require everybody to work properly, with integrity, and not exert any kind of influence on the most vulnerable people in the country, who perhaps cannot defend themselves and are not legally trained. The hon. Gentleman is absolutely right on that.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I praise the hon. Lady for the way that she has argued her point, which I entirely indorse, about the six weeks. Does she see my point that this situation is worsened when there are constituents in Caithness and Sutherland, in extremely remote parts of Scotland, who are very often out by themselves, not near a food bank, not near friends or relations who might be able to tide them over the gap? There is a rurality and sparsity issue to this, which worries me greatly.
Heidi Allen
Indeed, there are many elements that make it especially difficult for some people. We have to recognise that one system will not work for everybody, so we must work together to find the solutions.
The reputation of this place has hit rock-bottom again in recent weeks. Let us turn it around. I checked a couple of words in a thesaurus: “compassionate” means empathetic, thoughtful and showing concern for others, while “conservative” means favouring free enterprise and traditional values. A compassionate Conservative does both those things: progressive and free, but safeguarding of society and showing care for others. Let us show we are listening. Please, Minister, let us do this.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I am pleased to follow the hon. Member for South Cambridgeshire (Heidi Allen), who has established a very positive reputation on these issues. I thank the Backbench Business Committee for the opportunity to debate universal credit again, and I congratulate my right hon. Friend the Member for Birkenhead (Frank Field), who has had a reputation for campaigning on these issues for slightly longer than the hon. Lady.
I hope that the Minister might be able to confirm, although I suspect he will not, that the media reports are true that the Chancellor will take action in next week’s Budget to reduce the waiting time for universal credit, and that other changes might be made, because it is clear from the contributions we have heard so far that the problems with universal credit are not just about waiting time.
I want to refer to statistics and individual cases from my constituency. Citizens Advice East End tells me that analysis suggests that 22,000 families in Poplar and Limehouse will be in recipe of universal credit by 2022, half of whom will be in work. It has dealt with hundreds of cases already, half of which relate to the claiming process. One involved a young mother with a five-month-old baby who was refused universal credit due to an incorrect decision on her right to reside.
On rent arrears, I am grateful for information supplied by Andrea Baker, director of housing at Poplar Harca. She tells me that of its 372 residents claiming universal credit, 98% are in arrears. That cannot be right. Something is going wrong somewhere in the system as the statistics on the benefit cap, housing benefit and the bedroom tax are less than half that figure.
Andrea says:
“Whilst there are still relatively few households transitioning to UC, the average 10 week wait for the first payment has pushed 98% of them into rent arrears. We anticipate it to be very difficult for the majority of UC households to make-up the accrued arrears. When the payment is finally received, they are likely to also owe others money, family, friends, utilities, credit cards, payday loans, loan sharks etc. And whilst we advise that paying rent should always be a priority, most know we are likely to offer time to pay in a way other creditors won’t.”
I have had similar reports from Stuart Veysey of Eastend Homes, and Mick Sweeney, former chief executive of One Housing Group.
My team, Louise Leak and Joytera Khanum, have supplied statistics from their casework. For example, a 61-year-old man, Mr M, was made redundant last year after working in a mental health facility for 22 years, following funding cuts. He was unable to find work, and with his savings depleting, he made the decision to claim universal credit in August. His claim has been continually refused on grounds of missing documentation, but in September he was informed his housing benefit would be stopped. With no universal credit or housing benefit, Mr M has now fallen into £700 of rent arrears with his housing association. He is left with no living family and £200 to his name, and now fears eviction and homelessness, despite still—unsuccessfully—trying to claim universal credit and attending five job interviews. Mr M writes:
“After 4 decades of almost continual employment I find it utterly incredible to find myself in this parlous state and faced with possible homelessness.”
There are a number of other cases involving, for example, someone on low pay whose monthly income has been incorrectly calculated, and someone with a partner who is a full-time student whose eligibility has been incorrectly assessed because of the minimum income floor, which suggests that self-employed people are calculated as earning £1,000 a month regardless of what they are actually earning.
A lady, Ms K, attended my advice surgery in a very fragile state, both emotionally and physically. She initially made a claim for universal credit in August. She is unable to manage her affairs because of her medical and mental issues, and she missed a vital meeting, which led to her claim being closed. Her benefit was finally paid after 10 weeks, with only a small interim payment, and she had to access help from our excellent local food bank, the First Love Foundation. This case was resolved quickly, but only after the intervention of my team, who stated how concerned they were for Ms K’s wellbeing. The First Love Foundation says that universal credit referrals this year to the food bank are at 25% when they were only 4% last year.
All those cases tell me that universal credit is not working, for a variety of reasons. I hope the Minister can offer some expectation that things will improve for my constituents, as well as others whose Members of Parliament are making the case for them this afternoon.
Chris Green (Bolton West) (Con)
I congratulate the right hon. Member for Birkenhead (Frank Field) on securing this important debate. It was a pleasure to listen to my hon. Friend the Member for Banff and Buchan (David Duguid), who made a superb maiden speech. The debate about which is the most beautiful Scottish constituency carries on to this very day.
Waiting seven weeks for a first payment, in any circumstance, is challenging. If someone, perhaps a middle-class person, got a new job and had to wait six weeks for their first pay, that would be challenging, but it is quite likely that such an individual would have savings to fall back on and there might be friends and family who could offer support. Also, that person would have a good salary to look forward to once they started the job. However, someone on universal credit or receiving benefits would be far less likely to have such savings, and friends and family might not be so able to offer that support. Such a person would be in a far trickier position if they were receiving benefits, or looking forward to receiving benefits, perhaps having lived on the minimum wage or the living wage.
We have to recognise that the six-week wait is enormously difficult for people in the most vulnerable position in society, and I believe that we ought to get closer to the vision set out when universal credit was initially rolled out—the ideas behind it such as the sense of its being compatible with work and that work should always pay. But that is not the only aspect on which universal credit needs to get closer to that initial vision.
We need to reduce those seven waiting days. I appreciate the point about advances, but someone previously on the minimum wage and with no savings at all who has to spend seven days without any income before receiving the first payment five weeks following that seven days will find that a very difficult position to sustain with little back-up. We also need to look at the taper. I appreciate what the Government have done in the recent past, but we need to go further in improving the taper to give further encouragement for people to get into work.
However, we do have a listening Government, and I want to highlight a note sent to me by Bolton Citizens Advice:
“We welcome the Government’s recent decision to make the Universal Credit helpline free and ensure all claimants are told they can get an advance payment. We called for these changes in July because they will make a real difference to the people we help.”
Heidi Allen
I thought I was the ultimate UC geek and that there was nothing I did not know about it, but recently I learned that people can have a three-month payment holiday before those advance payments are paid back. Does my hon. Friend think that the jobcentres should advertise that more?
Chris Green
My hon. Friend makes an important point. It is very important to increase communication, and that awareness is vital. Citizens Advice and other organisations play a vital part.
Many people are calling for the Government to pause or perhaps even stop the roll-out of universal credit. I do not agree with that. Recently, I visited a jobcentre that serves my constituents, and people there were absolutely clear: do not stop. My hon. Friend also highlighted a number of failings with the current system, which is failing far too many people. While we need to move on to universal credit, I am equally clear that the initial wait must come down from six weeks to one month.
Kate Green (Stretford and Urmston) (Lab)
It is a pleasure to have heard the maiden speech of the hon. Member for Banff and Buchan (David Duguid), and to follow other hon. Members, including my right hon. Friend the Member for Birkenhead (Frank Field) who opened the debate.
No one could object to universal credit’s ambitions to simplify the benefit systems, to smooth the passage into work, to make work pay and to reduce poverty, but so much has gone wrong in practice that it is hard to know where to start. The problems we are seeing are not just because of poor implementation; the problems have been designed in from the outset, despite repeated warnings from Opposition Members since 2011 that the programme was too ambitious, too risky, too complicated, too reliant on complex IT systems—complex for the claimant and for the Government—and did not go with the grain of people’s lives.
Let us start with the six-week wait. It is based on the assumption—I might go so far as to call it the prejudice—that the right and normal way for people to receive their income is to do so every month. That is not the case for many low-paid workers, as we know. It is also based on the assumption, as the hon. Member for Bolton West (Chris Green) mentioned, that people have savings in the bank. Hon. Members should ask themselves whether they could manage if their income suddenly dried up for six weeks or more, especially if it was the result of an unexpected and catastrophic event—losing their job, a partner leaving, their child becoming ill, or having an accident and not being able to go to work. It is unforgivable to put extra pressure on people on the lowest incomes in those circumstances. The six-week wait must be reduced. I recognise that exceptions can be made, but it is not clear that the system is working when such exceptions should be made. My constituent B, who was fleeing domestic violence, was told that she would not have to wait for the six weeks, but she still had no money after two weeks.
That leads me on to the problems with advance payments. My constituent K was not told until her third interview with Jobcentre Plus that such payments were available, and she did secure an advance payment. However, the repayment rate is punitively high, especially when it is combined with the recovery of other debts, such as those relating to council tax or utilities, and payments imposed by magistrates courts. Under universal credit, that can mean deductions of up to 40%, leaving claimants with insufficient money to live on. As a result, one lone parent in my constituency was left with just £100.67 per week to pay all her bills, which is £110 per month less than on the legacy benefit. How can that be right?
Such problems are creating debts and rent arrears: 80% of Trafford Housing Trust customers on universal credit are in rent arrears. The collection rate for arrears of under three months is 79.3%. Although the figure is much higher for arrears of over three months, at 96.4%, that is because mistakes in paying people’s benefit have largely been sorted out by that point or because they have debt relief orders in place. That is not because they have adapted to universal credit, but because other things are kicking in.
The problems are compounded by a complete lack of understanding in Jobcentre Plus about alternative payment arrangements—in other words, paying the rent directly to landlords. Trafford Housing Trust staff have told me that Jobcentre Plus staff do not understand this, will not talk to them about it, make mistakes in the calculations and make payments to claimants that should not be made to them but which are then promptly swallowed up by the bank and other creditors. In one case, an alternative payment arrangement was refused because the debt was deemed to be one of less than eight weeks when that was not the case. This reflected the fact that Jobcentre Plus calculate the claims over a 52-week period, whereas Trafford Housing Trust work out claims over a 48-week period.
Anna Soubry
Broxtowe CAB has told me that it is concerned about people who are on fluctuating hours, and those fluctuations and the lack of good co-ordination with HMRC are causing real problems for people on low wages who are in receipt of UC.
Kate Green
I am delighted that the right hon. Lady has raised that issue because it brings me neatly to my next point, which is about the particular problems that arise with the assessment period.
My constituent S received two lots of wages in one assessment period. Similarly, we can see how those with fluctuating incomes will have different levels of payments in different assessment periods. As a result, her universal credit was calculated as zero in the month she received two payments. In the following month, she received nothing in income, but by that time her claim had been cancelled. When the benefit was introduced, we were told that HMRC’s use of real-time information would sort out this kind of problem, but it did not do so. The failure was that of her employer to upload the data in time. The use of real-time information was a complete irrelevance, because the data were not in the system at all. In other cases, constituents who have been paid early—for example, because their employer provided an advance of pay before the Christmas break—have lost their award and their claim has been stopped. None of that is the fault of the claimant, but the DWP is utterly inflexible in its application of the assessment periods. What are Ministers doing about this? I am now being told that S’s case could actually have been treated more flexibly, but I was not told that when I first wrote to the DWP. It is now completely unclear to me and, more to the point, to my constituents what the position is on these problems.
Finally, I want to say something about the problems when claimants migrate from ESA to universal credit. In that circumstance, if they request mandatory reconsideration and then go to a tribunal, they will find that their ESA claim is cancelled. Even if they win their tribunal claim, it cannot be reinstated, and they are forced to remain on UC. My understanding is that that was not Ministers’ initial intention. Claimants are not being told, when a tribunal case starts, that they can have their ESA claim reinstated. In his summing up, will the Minister also address that point? This is putting further pressure on sick and disabled claimants who ought to be getting decent support from the benefit systems, but are not.
Kelly Tolhurst (Rochester and Strood) (Con)
Thank you, Mr Deputy Speaker, for calling me to speak. It was a privilege to hear my hon. Friend the Member for Banff and Buchan (David Duguid) deliver his maiden speech. I congratulate the right hon. Member for Birkenhead (Frank Field) on securing this debate. It was very interesting to hear what he said about his constituents.
The House has debated universal credit extensively in recent weeks, and I am pleased to take part in such a debate again today. The principle of universal credit is a very good one, and the Opposition have said on many occasions that they support it, but I am concerned about the dialogue on the roll-out of universal credit in recent weeks. I believe it has caused much distress among potential claimants and people who are waiting to switch to universal credit.
For as long as I can remember, the benefit system in this country has been burdensome and complex. I have lost count of the number of people who have had issues with working and claiming benefits such as jobseeker’s allowance, working tax credit and child tax credit. I have also lost count of the number of people who have said that there must be a better way of doing things. We do indeed want a welfare system that supports the most vulnerable and is there for people when they fall on hard times and need help, including by claiming benefits that may need to be paid back.
There is an assumption that it is wrong for individuals to have to pay back advance payments—they are loans, without interest—although they are very gratefully received by claimants when they are in great need of money because of the situation in which they find themselves. I am sure that other Members have, like me, been confronted by constituents who have received large bills from the DWP following mistakes in the information given, and when overpayments have been made to people claiming working tax credit. Do Members believe that those payments should not be paid back, and would such a situation be better than this new system of universal credit?
There is also an assumption that, because of the advance payments, people will automatically get into arrears with their rent, which will result in their getting evicted. I can only speak from experience of my constituency, but I have not had any examples of people who have been evicted from their homes within six weeks. In actual fact, I have seen quite the opposite.
As we have heard, approximately 40% of the universal credit claimants are currently in work, and the number of people moving into work once on universal credit is increasing. Universal credit is part of the welfare reform that is needed, and it has been designed to help people and move more people into work. For so long, many people have been trapped in the benefit system. Such people want to work or to work for longer hours, but there is all the stress and complexity of doing so given the risk of losing all their benefits in one go or of having to pay back large sums when mistakes have been made because of the complexities in the current system. I want, and I know my constituents want, a system that helps people, but does not put them off taking opportunities when they are there. I want a system that aids people, as I believe this system will do.
With any new system there are always things that need improving once implementation begins, and I am therefore pleased that the Government have taken care to implement a gradual roll-out over nine years, moving to 10% of the current claimant count. In my opinion, the roll-out is being done in a measured and steady way that enables the Government to address the issues.
Over recent weeks I have heard a number of Members claim that universal credit is getting people into debt and causing them to be evicted, and that concerns me greatly. The rationale is that universal credit is paid in arrears to mirror the world of work, and in principle that is a good idea and forms part of how we need to reform welfare. I have been concerned by accusations that that is being done deliberately to disadvantage people who are in need of help, and perhaps at difficult times in their lives. In all debates, Ministers have been clear: people who need advance payments will get them within five days. In conclusion, I hope that after today’s debate, the Opposition will work constructively with the Government to try to increase and help the roll-out of universal credit.
Helen Goodman (Bishop Auckland) (Lab)
I am pleased to take part in this debate because in my constituency, 10,700 households will be moved on to universal credit. That is 21,000 people, which is almost a quarter of my constituents. On 13 December, those with new claims and changes of circumstance will be moved across to universal credit, and over Christmas many people will face a six-week gap in their income. That is not so much a merry Christmas as a Victorian Christmas that even Scrooge did not think of.
Ministers have banged on about advance payments, but let us look at what that means in practice. Suppose that a single disabled person with a payment of £400 a month takes an advance of £200 to pay their rent. If all goes according to plan they will then have their payments abated, so that their income over the next four and a half months will be £200, £320, £320 and £360. In other words, instead of an income of £1,800 over that period, it will be £1,200. That is not a “wait”; it is a cut, and many will feel that over Christmas it is the cruellest cut.
Seven years ago in my constituency there were no food banks, but after seven years of Tory Government we now have seven food banks. Labour Members have spoken previously about the need to address free school meals, and in my opinion every child in a UC family should receive them. Now, however, to add to the loss of income, during that six-week period children will not receive free school meals either. Ministers talk about preparing people for work, but this is an in-work benefit. In my constituency, 4,500 of the households that are being moved on to universal credit—that is 40%—contain people who are already in work and have jobs.
Vicky Ford
My understanding is that if a child received free school meals before, they will continue to receive them. It is only for those who are new to the benefit system that there may be a delay.
Helen Goodman
I am sorry to inform the hon. Lady that that is not the case for new claimants and those whose circumstances have changed.
I am alarmed at what is happening to women in low-paid work. Many are trying, with great difficulty, to do their best to balance their need to earn an income with their responsibilities for collecting their children from school and looking after them properly. They might work 20 hours a week to get the right balance, but the Government are now going to employ advisers to harass them to increase their hours. When Labour was in power, we had different rules for single parents from those for other families. It seems to me that the Government are trying not to help lone parents, but to grind them down and grind down their children as well.
Vicky Ford
I remember under the Labour Government that single mothers came to me who were unable to continue work because they were better off on benefits. Does the hon. Lady agree that the system of universal credit is to help people move into work, rather than be better off on benefits?
Helen Goodman
I am sorry but the hon. Lady is wrong. I took through the statutory instruments on work conditionality myself, and when we left government, people were always £40 a week better off in work than not in work. Those are the facts.
Women fleeing domestic violence are in an even worse situation. When they arrive at the refuge, they have to register their change of address as a change of circumstance, so they will be in the vanguard of those who have a six-week gap in their income. It may even mean that some do not flee violent partners because they are worried about the effect.
In Bishop Auckland, huge preparations are being made for the roll-out of universal credit. The council and housing associations are employing more people—unlike, I am sorry to say, the jobcentres, which should be employing more people. One housing association is increasing its provisions for bad debt fourfold. Money that would have gone to building new homes is now going to deal with this Government-induced crisis in the housing system.
Three months ago I asked to attend one of the digital courses to see how people are supported by jobcentres. That is a major issue in my constituency because we have very bad broadband in the rural areas, and high levels of digital exclusion. Ministers must bear in mind that 5 million people in this country have never sent an email, and those are predominantly people on low incomes—the very people affected by this change to universal credit. We raised that point with Ministers five years ago, and it still has not been sorted out. Some single men who have already made a claim told me that people are timed out after 45 minutes if they cannot complete the claim, but it is difficult to complete in that time because there is no written guidance to tell people what documents they have to produce and scan in.
I am not saying that the problems with this system are only administrative because there are fundamental problems with universal credit, the first of which being that George Osborne took £3.5 billion out of the system. The Government refuse to recognise that people need these payments, and because of that refusal, rates are too low, payment gaps too long, and tapers too high. Let us pause and fix the system.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I will now drop the time limit to four minutes to ensure that everybody gets in. It is the interventions that are killing it.
Alex Burghart (Brentwood and Ongar) (Con)
I am pleased to contribute to this debate—I have been looking at proto-plans for universal credit that go back about five years, and it is a pleasure to work with the right hon. Member for Birkenhead (Frank Field), who is also a friend, on the Work and Pensions Committee.
Let us go back to where this all began and the reason why, in principle, we have cross-party agreement on universal credit. The previous system was not good enough. It was set up with good intentions, and it was a way of trying to take people out of poverty by giving them handouts. However, the way it was set up meant that many people were discouraged from taking on more work, which inhibited their ability to move on in life, improve their situations, and support their family. Universal credit was born out of that realisation, and from a desire to build a welfare system that would slowly remove benefits as people moved into work, and actively encourage people to take more hours and be better off.
We also want to create a system in which the world of life out of work mirrors the world of life in work. That means that people are in work to find work, and there is an expectation that they will look for work and sign a contract to that effect—the claimant commitment. It means that benefits will be paid on a monthly basis, so that when people move into work and monthly employment, they will be ready for that. I am afraid I cannot accept the argument that some people will never be able to cope on monthly payments. I feel that is extremely insulting to many people.
Alex Burghart
I disagree with the hon. Lady. It is.
We now have a system coming into being—
Alex Burghart
The hon. Lady can shake her head, but it is true. It is insulting to people to say that they will never be able to cope on monthly payments. I challenge her to have that conversation with the many people who are looking for work, because they would be insulted by it. [Interruption.] It is unfortunate that she laughs at that because it is true. [Interruption.] Look, this is a very insulting way of carrying on.
Helen Goodman
Anybody can manage on a monthly payment of £2,000, but managing on a monthly payment of £500 is rather more difficult.
Alex Burghart
The hon. Lady will recognise that there are lots of people who do manage to do that. [Interruption.] I have had enough of this Opposition.
I am delighted to say that under the universal credit system there is personal budgeting support. No one on the Opposition Benches has referred to it, but it offers money advice to help people with a four-week payment and offers alternative payment arrangements so they can have their money paid direct to their landlord. I am very sorry to hear that the hon. Member for Stretford and Urmston (Kate Green) found that that was not working well in her jobcentre. I have spoken to people in my jobcentre and I was pleased to see that they were completely on top of how the system worked.
Within universal credit, of course, there are a lot of problems, which have been talked about today and on other days, emanating from the long wait people experience when coming into the system. At the start of the process, far too many people have been waiting for far too long. The Select Committee report has drawn on that. Since the first roll-out phase, however, a number of improvements have been made thanks to the test and learn system. The landlord portal was very favourably received by people who gave evidence to the Committee, saying it would greatly help. We have also recently seen the initial evidence interview, the once and done process, which means that more information can be brought into the system straight away. These measures are all making improvements. I say to Opposition Members that we cannot learn unless we test.
Vicky Ford
My hon. Friend is a great expert on this subject and I would like to hear more about the areas where he considers improvements have been made.
Mr Deputy Speaker (Mr Lindsay Hoyle)
If Members do not want people to speak, please say so now and I can start to take them off the list. That is what we are doing to each other. I do not mind, but when Members do not get in, please realise what is going on here.
Alex Burghart
Thank you, Mr Deputy Speaker.
We are now left with a system in which there is a six-week wait for the initial payment. It is worth reminding the House why that exists. The very model of universal credit is about having a month-long assessment period in which the system understands how much you are earning and adjusts your payments accordingly. There must then be a calculation time which works out exactly how much people are owed. At the moment, that is a week. However, when we met Neil Couling, the DWP head of universal credit, he said that they were working to bring that down. I believe it can and should be brought down as a matter of urgency.
At the other end, of course, we still have a week’s waiting time. I do not disagree with the Government very often, but my colleagues from my previous roles know that I do not believe that those waiting days should exist. There have always been some waiting days in the system—three days—but the extension to four, which was not made by this Secretary of State or under this Chancellor of the Exchequer, should not have been introduced. That is why my Committee has called on the Government to remove the seven waiting days. We should not pause the roll-out, but we should make that adjustment.
Ronnie Cowan (Inverclyde) (SNP)
I was hoping to talk the House through a timeline that covered all aspects of requiring, claiming and receiving universal credit, but the time allotted will not allow me to do so. My constituency has had full roll-out for 12 months, so this is an abridged version based on what constituents have told me at first hand.
My archetypal constituent—I will call her Mrs Smith—is 50 and married. She lives in Port Glasgow and had been working at a local retail shop, but she has left on health grounds. Seeking support, Mrs Smith goes to her local jobcentre in Port Glasgow only to find that it has been shut. She instead walks 3 miles to the jobcentre at Greenock, but is surprised to learn that no one there can advise her on what benefits she is entitled to. She is told that the staff are not benefits-trained and are not even able to offer her options. Mrs Smith subsequently learns of universal credit from a welfare rights organisation, so she applies online. This would make Mrs Smith unlike the 15% of constituents surveyed by my office, who said that they could not use a computer or had great difficulties in doing so.
Mrs Smith lodges her application today, 16 November. By 23 November, she realises that although the application has been lodged, there is in fact at least another month of waiting while the entitlement is calculated. At this point, Mrs Smith’s remaining savings are used up by rent, council tax, TV licence, utility bills and shopping—the usual things. Her husband works, but he has a low income and they are now struggling financially. It is worth reminding Members at this point that the Money Advice Service found in 2016 that more than 16 million people in the UK had less than £100 in savings.
As November presses on, Mrs Smith’s financial situation becomes more desperate as she has underestimated the amount of time it will take to receive support. Please remember that this story is based on real-life examples that my constituents have brought to me. People do not fall into universal credit trained; they learn as they go along. At the start of December, because of a long-standing commitment, she takes her granddaughter to the movies, using a credit card to pay. She is accumulating debt.
By mid-December, Mrs Smith applies for a crisis grant and considers visiting the local food bank. The constant pressure of having no money begins to creep into every facet of her life. She is stressed and her relationship with her husband is suffering. None the less, she makes it through to her first universal credit payment sometime after new year.
Mrs Smith’s husband is paid weekly and coupled with real-time income data, which means that her universal credit payment fluctuates wildly. She is now locked in a boom-and-bust cycle, with her universal credit sometimes falling to almost nothing, while in other months she receives eight weeks of income in one assessment period.
What will the future hold for the real-life constituents of Inverclyde, apart from the uncertainty, stress and poverty that this system inflicts upon them? I am politely asking the UK Government not to ignore the overwhelming evidence. Universal credit is not working. Saying that its predecessor was worse is no excuse. It does not help my constituents from week to week. The roll-out must be halted. Take the time to reform the fundamental flaws in universal credit and then implement a system that truly offers applicants the stability on which they can build their lives.
Kevin Foster (Torbay) (Con)
It is a pleasure to speak in this debate, and it was also a pleasure to listen to the maiden speech of my hon. Friend the Member for Banff and Buchan (David Duguid). To be fair to his predecessor, she managed one Friday what might be a unique achievement: getting me in the same Division Lobby as the Scottish National party. We were voting in favour of her very welcome and creditable private Member’s Bill, and I join my hon. Friend in wishing her all the best for her future.
I welcome the debate. It is important that we discuss universal credit again as it will have a significant impact on my constituency, as it has on others as it has been rolled out. As we have this debate, we need to be careful not to make out that the current system is fantastic. There has always been an illogicality to having a council system for some benefits—housing benefit and council tax—and then the DWP administering income-related benefits. When I was deputy leader of a large midlands council, a lot of time and resources had to be devoted to administering benefits that were, fundamentally, national benefits. There was no way to change policy or to build in any local flexibility, which raised the question of why local councils were getting involved with housing benefit. I accept that there is a slight difference with council tax, because of variations in rates between areas.
In principle universal credit is the right move, but as well as the change from weekly to monthly payments, I suggest that we also consider wider changes. BrightHouse, a store on Torquay’s high street that I am happy to call a bunch of vultures, advertises weekly costs, which means that they look nice and affordable, but the monthly and final costs are always in very tiny writing. That might be something to consider more widely. If monthly costs were advertised, the real costs of these appalling deals might be brought home to people.
I welcome the phased roll-out over nine years. As many of us remember, the tax credits system was introduced in one go, and because it is administered by HMRC, overpayments are dealt with in the same way as the underpayment of tax, but that is not appropriate for those on lower incomes. People who expect a tax bill at the end of the year will often make provision, but those who assume that they will receive a certain level of benefit under tax credits do not.
In advance of the roll-out in Torbay in May 2018, my office staff have been working with the DWP and receiving training to respond promptly to constituents’ queries. We are working with other partners, too. One concern raised by John Dudley, a benefits adviser at Hele’s Angels, a great organisation in one of the most deprived areas of my constituency, is around the delays to personal independence payment appeals. Given those delays, what reassurances can the Minister give us that work is being done to prevent similar problems from occurring in the very important systems for universal credit?
On the six-week initial wait, I hope that the Government are in listening mode—I am sure they are, given the press speculation this week—although I am conscious that we have the Budget next week and that the Minister might not wish to say too much. I would also be interested to hear more about whether people can have their rent paid directly to their landlord.
I shall conclude as I am short of time. This has mostly been a constructive and useful debate. It is right that we continue to hold these debates to ensure that the system works well when it is rolled out to the remaining 90% of claimants.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I thank the right hon. Member for Birkenhead (Frank Field) for securing the debate and congratulate the hon. Member for Banff and Buchan (David Duguid) on his maiden speech. I note that the comparative beauties of our constituencies are yet another thing to disagree on across the Chamber.
Universal credit was piloted in Inverness way back in 2013. I am always astounded by the lengths to which Members who have not experienced it will go to defend the system, given that they have not seen what is happening. The hon. Member for South Cambridgeshire (Heidi Allen), who is no longer in the Chamber, has said elsewhere that jobcentre staff had told her that universal credit was only 60% built. We have had it since 2013, so we have been feeling its impact daily since its inception. Make no mistake: universal credit, as it rolls out to full service in its current form, without being halted and fixed, is a disaster, and it is only going to get worse as it goes to more people and the resources to support it are stretched even further.
I see Government Members shaking their heads at that. When they accused me previously of scaremongering, I invited all Conservative Members, including the Minister and the Prime Minister, to come to a summit in Inverness to hear from the agencies and people involved about the problems being imposed on them, but none took up the offer. Had they done, they would have heard harrowing stories, as I tried to relate yesterday in my question to the Prime Minister, from the agencies and people there, but none of them came. Instead, when I raised my question, there was laughter—[Hon. Members: “No.”] It was recorded, and people can listen to it. What was funny—the fact that it is harrowing, the fact that I was talking about cancer patients dying before their universal credit claims came through, or the fact that I was talking about terminally ill people who have to self-declare that they are terminally ill, even if they have told their doctors they do not want to know their fate? How cruel is that? And yet there was laughter.
Drew Hendry
If Conservative Members listen to the recording, they will hear the laughter loudly.
If it was not any of those things, was it the fact that we are having problems in Inverness? The manager of the local citizens advice bureau tweeted yesterday:
“Sad when the misery and suffering that is caused by UC could be found amusing by anyone—suggest they try it for a few months.”
Some adjustment is available from the Scottish Government, but universal credit is a reserved matter, so the UK Government’s constant attempts to pass the buck and abdicate responsibility for what is their responsibility is not good enough.
I have very little time, but I want to read out an email I got from somebody inside the ESA benefit inquiry line:
“the chaos that UC is causing me and my colleagues is quite simply unacceptable. People on UC realise it’s not fit for purpose so ring ESA and BEG to be let back on to the benefit but that is not possible. How long do you think it will be before one threatens suicide”?
There are so many problems with universal credit and not enough time to deal with them today. The Government need to halt it and fix it.
Rachel Maclean (Redditch) (Con)
It is a pleasure to follow many colleagues, including my hon. Friend the Member for Banff and Buchan (David Duguid).
Michael Tomlinson
My hon. Friend has said that it is a pleasure to follow so many speeches, but does she agree that the speech she is following got it completely wrong, in tone and manner? There are hon. Members on both sides who want to make this work.
Rachel Maclean
I thank my hon. Friend for his intervention. I know the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), and I can assure him that nobody on the Government Benches was laughing at his comment yesterday. Unfortunately, I could not take up his kind offer to go to Inverness—I am sure it is a wonderful place—because I was busy in Redditch doing exactly what he said: meeting the housing providers and agencies there to make sure that the roll-out was going well.
Universal credit is designed to be an agile system. I used to work in software development, so I understand what that means in terms of designing a very complicated system that deals with individuals and their unique and different circumstances. Opposition Members have called on the Government to pause the roll-out, but that would not fix the problems they have rightly identified. The Minister has recognised the problems in the system, and we all want to work together to fix them, but the nature of an agile system is that it changes all the time in response to people using it. That is how we learn and improve the system.
We have already seen evidence of that. The Prime Minister highlighted an example yesterday when she said that the number of people in arrears on universal credit had gone down significantly—by a third, I think—in the past four months. That is evidence that the system is improving as it is being rolled out. It is a very slow-roll-out—it is taking nine years altogether—but I think that, just as we recognise the seriousness of issues that have been rightly highlighted in the Chamber in, I hope, a serious fashion, we should also recognise the real work that the Government have already done and the real progress that they have already made in addressing some of those serious issues. I hope that that work and progress will continue.
Some Members have used an extremely critical tone, and I think that that is wrong. This is a serious debate, and we are here because we care about our constituents. I am a very privileged person, and I am the first to say so. I have never had to rely on benefits, and I am sure that some Opposition Members have not had to do so either. That, however, does not preclude any us from feeling compassion for and empathising with people who are in that position. That is why I have visited my local jobcentre and spent a long time discussing the issue with social landlords, people who work in debt counselling, and the jobcentre staff themselves.
I do not recognise the stories that I have heard about jobcentres. I heard at first hand from the jobcentre staff about how hard they were working to support the most vulnerable customers through their journeys, and they are proud to do that. Their policy is to make advance payments by default, rather than forcing people to ask for them. They are working hard on an individual basis, providing a tailored package of support for every single claimant in the constituency.
Alex Sobel (Leeds North West) (Lab/Co-op)
I have been on jobseeker’s allowance and I know what it is like, but the hon. Lady’s account of DWP workers is not true. A universal credit manager, quoted in the New Statesman, said:
“I see masses of suffering on a daily basis. Case managers…are well-trained to deal with any claimants… we know that children will suffer and go hungry for weeks.”
That is the testimony that we hear from people in jobcentres.
Rachel Maclean
No doubt the Minister will comment on that, but it is not the testimony that I heard at first hand from workers in my local jobcentre in Redditch. They told me that they care about their customers and want them to get the help they need, and they are proud to provide that help.
We have heard about landlords who are sending letters to tenants who will potentially be receiving universal credit. I think that that is unacceptable behaviour on the part of private landlords, and I think it very irresponsible of the right hon. Member for Islington North (Jeremy Corbyn) to raise this issue constantly from his privileged position without condemning the behaviour that he should be condemning. Rent payments can now be made directly to social landlords, and work is being done to provide the same support for tenants in the private rented sector.
Jamie Stone
The hon. Lady has made a valid point. I shall be meeting a social landlord tomorrow, along with one of my hon. Friends. I think that Ministers, both at Holyrood level and here, should look into this matter in due course, because the current modus operandi does not seem right to me.
Rachel Maclean
I thank the hon. Gentleman for his intervention.
Let me end by saying that I think it important for us all to work together proactively across the entire system. Landlords have a stake in this. Bromford Housing Association in Redditch told me that although people are in arrears when they go into its housing, there is not a single case of an eviction. Rather than evicting vulnerable tenants, they are providing support for those people. Surely that should be our approach.
Liz McInnes (Heywood and Middleton) (Lab)
If what I read in the media is true, the Government are planning to reduce the six-week wait to four weeks, and I hope the Minister will be able to confirm that. Although the change is welcome, however, it does not go far enough.
Gingerbread, the single parents’ charity, has found that about a third of single parents were already in debt before the introduction of universal credit. When families are already struggling, there is a danger that universal credit will put many more at risk of financial hardship. Gingerbread has made several urgent recommendations, including reducing the delay in making the first payment, improving communications about advance payments, introducing longer repayment plans, and, importantly, exploring options for a move to fortnightly payments for those most in need.
While I appreciate that the intention behind universal credit is to emulate the world of work with a payment method that reflects the manner in which workers who are paid monthly are remunerated, I think we should take a step back. We should bear it in mind that many people in receipt of universal credit are in dire financial circumstances, and that trying to emulate the world of work may be just a shade too ambitious for the circumstances in which many claimants find themselves. Will the Minister consider incorporating preparation for the world of work in the support services given to claimants? That could be done in a more tailored manner that would be appropriate to each claimant’s individual issues.
Other charities recommend reducing the six-week wait for the first payment to two weeks, including the Child Poverty Action Group and Citizens Advice. I have tabled several written questions on UC, and one of them concerns an issue raised with me by a CAB worker in Heywood in my constituency: if a UC claimant makes an application, they must also arrange an appointment with the jobcentre, and failure to do so invalidates the claim. The CAB worker told me that failure to make this appointment is a very common reason for applications being invalidated, leading to delays, and further compounding the cycle of debt and despair that some of my constituents find themselves in. I am pleased that the Department has replied that it will soon be implementing the option of a text message reminder and will also be reviewing its online orientation processes, to make sure all requirements are as clear as possible for all claimants.
Another issue is the question of what trigger will be put in place in the UC system to replace working tax credits, to entitle children to free school meals. The answer I received from the Department was that no decision had yet been taken and that
“our proposals on this matter will be announced in due course”.
It is difficult to comprehend that such a basic issue has not been sorted out prior to roll-out, and I hope the Minister can provide some clarity on this.
The Government continually repeat their mantra of “Test, learn, rectify”. Why do they feel it is appropriate to carry out tests on the most vulnerable in our society, what evidence can they show of having learned from their failures, and when are they going to start rectifying the damage that has already been done?
Stephen Kerr (Stirling) (Con)
I begin by congratulating my fellow Scottish Conservative, my hon. Friend the Member for Banff and Buchan (David Duguid), on his excellent maiden speech, and also by expressing my appreciation to my hon. Friend the Minister, whose attentiveness and attention to detail are unsurpassed.
I am an avid supporter of universal credit and am fully vested in its success in my constituency, but I am not going to rehearse the arguments in favour either of welfare in general or UC specifically, as I have already spoken twice on this matter in recent weeks. Instead I shall refer briefly to certain aspect of the Select Committee report which require the reflection of Ministers.
The first matter is referred to in paragraph 3, which stresses the importance of producing “a robust statistical analysis” of the performance and impact of UC full service. I endorse that. I asked a written question last month about the average times claimants wait to receive their first payments from completion of the claim submission to UC being paid into their bank account, and I was told:
“We do not hold this information”.
That was surprising to me, as I subscribe to the principle that when performance is measured, performance improves, and when performance is measured and reported back, the rate of improvement accelerates. I therefore welcome what the Select Committee observed about the ease and speed with which advances can be granted, and I confirm that this is true in Stirling, as it is in London Bridge.
I am also concerned about the level of repayment, which should take into account matters such as a claimant’s existing benefits and other debt repayments. Perhaps there should be a higher minimum than currently, below which repayments will not be extracted. I had a constituency case of a person who after repayments was left with only £61 for a month. Might some additional discretion be given to DWP staff on repayments, especially where overpayments have occurred due to acknowledged DWP errors?
The Select Committee report recommends that the Government should aim to reduce the standard waiting time for the first UC payment to one month, and I concur with that. I hope the Minister will reflect on it. I accept that the recommendation comes with a cost and there are budgetary considerations and this is public money which cannot be spent twice, but this is also a matter of compassion, and the experience of Stirling CAB is consistent with the Resolution Foundation research finding that more than half of low and middle-income families have no savings and two thirds have less than a month’s money.
I continue to have concerns about the application process, such as online access, especially in rural areas, and the difficulties for applicants who are homeless, have alcohol and drug addiction issues, or who have no online facilities to make a claim, or have anxiety, depression or bipolar disorders. Is there a paper-based application form that could be used in extraordinary circumstances? This would help to address the needs of the small minority of people who have genuine anxiety about the digital system.
I would further ask the Minister to consider allowing DWP staff to offer claimants the option of having their rent paid directly to their landlord, as a proactive ask. Will he also consider widening the circle of approved and trusted advisers who have direct contact with DWP staff to discuss individual case needs, which can then be carefully and closely managed in liaison? In closing, I should like to express the regard I have for the right hon. Member for Birkenhead (Frank Field) and the work of his Select Committee, and ask the Minister to consider the conclusion of its report very carefully—
Laura Pidcock (North West Durham) (Lab)
First, I will not take lessons from the other side about how angry we should be on this issue. We are experiencing the suffering in our communities. This debate and all the expressions of concern about this shambolic system lead me to one question: what would it actually take for the Government to pause this roll-out? All the advice services, experts in the field, local authorities, housing associations, landlord associations and private landlords are saying that the system is too riddled with problems to continue safely, yet the Government still choose to ignore their pleas. What does this say about the people in charge?
Let me be really clear about this. Universal credit is an in-work benefit as much as it is an out-of-work benefit. It is so predictable that the Conservatives would use divide and conquer tactics, creating the “strivers versus shirkers” rhetoric and the dangerous myth that this is about those who cannot be bothered to work versus those who can. Universal credit is as much about those in work as those who are not. If this Government last—at the moment, that appears to be a big “if”—7.2 million people will be on universal credit by 2022. Half those people will be in work and subsidising their low pay. I repeat that this is about those who are in work. The system is a scandal.
There are simply too many issues to raise now, but I want to highlight some of the most important. The first is the wait. People should not have to wait six weeks for a payment. The system embeds financial crisis from day one. If a reduction in waiting time by one or even two weeks is announced in the Budget, we should not be surprised if there are no cheers or celebrations from the organisations that are supporting people, because they know that it will only be a tactic on the part of the Government to release political pressure on themselves.
Let me move on to the other problems. Advance payments are not a solution. They are not automatically granted; they are calculated as 50% of the claimant’s entitlement; and they have to be repaid in six months. They exacerbate debt.
Laura Pidcock
Absolutely not. We have heard enough from that side.
Removing the severe disability premium and the enhanced disability premium is callous and part of a wider agenda of reducing the welfare budget. It will lead to disabled people—I repeat, disabled people—being worse off. Also, direct payments to claimants are creating rent arrears. As of yesterday, according to Karbon Homes in my constituency, 75% of people already on universal credit are in rent arrears averaging £810. Yes, that is because of the wait period, but it is also because of the financial demands on my constituents. How can the Government square the fact that rent has to be paid in advance, while universal credit is paid in arrears? Not to mention the DS1500 forms and the fact that those who are terminally ill have to go to the jobcentre themselves because the form cannot be submitted by someone else without explicit consent.
I am deeply concerned that the Government are rolling this system out in my constituency on 13 December. The first payments are expected on 28 January. Who set this roll-out date? Why on earth did this get signed off? These points are just the headlines; I could go on and on about the serious flaws of universal credit. The Government have had all the warning they need; they are now choosing to inflict this Frankenstein’s monster of a system with little or no regard for the wellbeing of people up and down the country. I do not know how the people rolling this out can sleep at night.
Ruth George (High Peak) (Lab)
I welcome the constructive comments from Members on both sides of the House. I have set up an all-party group to work with all Members, and I would welcome to the group any Member who has concerns, so that we can look seriously at all the problems that have beset universal credit. The six-week wait is just the start. It is just the start of a horrendous time for anyone who is claiming universal credit.
The local housing allowance for a family three-bedroom house in my constituency is £150 a week. There is a seven-day wait with no payment whatsoever, so a household can be £150 down to start with. The allowance is paid in arrears, but rent is paid in advance, as my hon. Friends have said, so a claimant can be £750 in arrears before they even start receiving universal credit. That is where all the reports of arrears are coming from and it is absolutely wrong. This is not about people on low pay not being able to manage; the system just does not take account of the realities of their lives.
I mentioned the six-week wait to the Minister on Monday and pointed out that it was six weeks until Christmas Day. Those who are applying for universal credit this week will have to wait until after Christmas to receive their payment. They will have just two weeks’ pay to get by on over those six weeks, and services will not be open over Christmas. I appreciate that the Government want to wait for the Budget before taking action, but they must appreciate that the people who are waiting for money over Christmas—families who will be able to afford no sort of Christmas—need the Government to act now to ensure that they can receive the payments they need to feed their children and give them a decent Christmas.
When I asked the Minister about that on Monday, he suggested that people could work more hours in the run-up to Christmas. Indeed, many employers are seeking additional people and overtime. Having worked for USDAW—the shop workers’ union—for many years, I can testify that many people rely on overtime in the run-up to Christmas. Under tax credits, that is perfectly reasonable, and people receive their pay at the end of the day because there is an income disregard, whereby if someone’s income increases by £50 a week on average, they do not lose any tax credits. There is nothing of that sort under universal credit. For every extra pound that someone earns in overtime, they will lose at least 63p from their next universal credit payment. People who do overtime in good faith, and as advised by the Minister, will find that their next month’s universal credit payment has fallen by 63% or even 75% of the overtime that they have earned. That does not help them to cover the costs of Christmas or to stay out of debt.
Like hon. Members on both sides of the House, I am suggesting that the taper rate should be reduced and that an earnings disregard, like that under tax credits, should be introduced. The Government need to pay attention to the realities of people’s lives under a monthly benefit system that hits them hard as soon as they earn any extra. There is an earnings disincentive that the Government must consider. They need to ensure that passported benefits come to everyone—
Neil Coyle (Bermondsey and Old Southwark) (Lab)
I thank my right hon. Friend the Member for Birkenhead (Frank Field) for securing this debate and acknowledge that this is the start of the Work and Pensions Committee’s work on this matter. The six-week delay has become totemic, but it is far from the only problem with universal credit which, let me be clear, has been a disaster. Anyone who looks at its original plan, budget and timetable cannot conclude anything else. The roll-out should have finished this year. Instead, it has reached only 10% of people, but it has done 10,000 times the damage to those who are now affected by it. Universal credit has cost more, and it has delivered less. It was always intended to cut help for 450,000 disabled people through axing the severe disability premium, ending the disability income guarantee and making DLA or PIP less generous for disabled people in work and for disabled children. That was the intention, and it has been made still less generous through the tax allowance changes.
The pretence that the roll-out has gone smoothly needs debunking. Instead of listening and acting on concerns, the Government have doubled down. They told us that things were tickety-boo and hunky-dory just a few weeks ago. They told us that they did not need to pause, tweak or fix it. Then, however, they did not vote on our Opposition day motion on universal credit because they know that universal credit is failing. They have yet to outline how that structural incompatibility will be changed in the longer term.
My home is in Southwark, which has been affected by universal credit and is in the test area. I refer people every week to my food bank, which has seen a third more people this year and has seen a tripling in the number of children needing help solely due to universal credit being extended to parents. Southwark Council has £6 million-worth of arrears from universal credit recipients. Ministers like to pretend that people are carrying arrears and debt over from other systems, which is simply untrue—it is a myth. The average housing benefit tenant in Southwark is £8 in credit, and the average Southwark tenant on universal credit is now £1,800 in arrears, which is unacceptable.
Cutting the timeframe might help, but many other problems need to be fixed including tackling problems with payment amounts. We have heard about real-time information problems today, but payment amounts will affect many more in self-employment and on zero-hours contracts. The Government also need to make clear what payment options, including fortnightly payments, are available, and they need to make alternative payment arrangements the standard for some groups. They need to enhance the trusted partners scheme to allow councils greater management control. They need to maintain housing payments for people moving on to universal credit from housing benefit, and they need to remove the seven-day waiting period before assessment, which is an utter con.
Ministers have had the chance to fix those issues, and they declined the opportunity to do so a few weeks ago, so anyone trying to claim universal credit today will see Boxing day before they get a single penny of support. Father Christmas will arrive before any support and, because of the delays, the Easter bunny is likely to arrive before some people get a penny of help from this Government. For the record, I do not believe in the Easter bunny, but I am still optimistic about Father Christmas appearing today in the form of the Minister offering an early Christmas present by announcing that he will tackle payment delays and resolve all the other problems with universal credit.
Angela Crawley (Lanark and Hamilton East) (SNP)
I congratulate the right hon. Member for Birkenhead (Frank Field) on highlighting some of the deeply rooted problems with the accelerated roll-out of universal credit. However, it is indicative of this Government’s complete disregard that we find ourselves debating the issue again.
I highlight the notable contributions of the right hon. Member for Birkenhead, my hon. Friends the Members for Glasgow South West (Chris Stephens) and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), and the hon. Members for Great Grimsby (Melanie Onn), for North West Durham (Laura Pidcock) and for Bishop Auckland (Helen Goodman) and their passionate calls to pause the roll-out and to fix the system, which is absolutely necessary.
I thank the hon. Member for Banff and Buchan (David Duguid) for his kind words for our colleague and friend, and I assure him that of course my constituency is the most beautiful part of the country.
Elements of universal credit have been live in my constituency for some time, but we moved to full service early last month. In past debates, the Government have said that universal credit will work for those who require support, but if that is the case, why has my local authority, South Lanarkshire Council, had to move almost £1.5 million from its revenue account into its welfare mitigation fund? The reason is to keep a roof over the heads of people who are falling into rent arrears as a result of universal credit.
It is worth noting that it was the right-to-buy policy of this Government and of the previous Tory Government, coupled with a failure to replace housing stock, that has decimated social housing provision across the UK. That money would be better spent on building council houses, on supporting people in their tenancies and on improving the existing housing stock.
I have repeatedly called on the Government to halt the roll-out and fix the systemic problems with universal credit. Does the Minister have a hearing problem? Forgive me, but if he is not hearing correctly, let me say it again: it is necessary for the Government to halt the roll-out until the problems have been ironed out. Members on both sides of the House have told him there are problems. Some Conservative Members have not yet experienced the problems and are therefore probably not able to speak with a great degree of authority. Let me assure them that the problems are stark and huge, and they will fall on the doorstep of their constituency offices, as they have on ours.
I have repeatedly called on the Government to halt and fix the roll-out, yet today I find myself asking once more for the same thing. At best, the Government might row back, reduce the waiting time and slightly improve the circumstances, but the fact is that this is a flawed policy. If they admit it and concede that there are problems, why not halt the roll-out and fix it properly and completely? I have even invited the Prime Minister to visit my constituency on a number of occasions to see the damage at first hand, but the invitation has been ignored.
Despite this fact, the roll-out has gone ahead and the number of people in crisis due to complex problems has gone up and up. A constituent of mine has had to wait more than 12 weeks for payments; some have received payments without the housing costs to which they are entitled; and some have been forced to register as homeless. In the last debate, I heard a Conservative Member state that universal credit will end the days of private landlords discriminating against social security claimants. He said, “Gone are the days of the signs outside the estate agents reading ‘No DSS Need Apply.’”
Let me tell that Member and all Conservative Members that that could not be further from the truth. Private landlords, unsure whether they will be guaranteed their rental income, are evicting people across South Lanarkshire simply because they are in receipt of UC. The already sizeable housing list in my area is being added to by this poorly executed policy. These failures are unacceptable for a social security system that is meant to stop people falling through the cracks in society—that is exactly what it is ensuring it is doing. The failure to address these problems is only pushing further people into homelessness and poverty.
For the sake of perspective, it is worth looking back at the initial design of universal credit and comparing it with where we stand now. When it was introduced in 2013, it promised to lift 350,000 children and 600,000 adults out of poverty. How is that working out for us, eh? It was promised that it would increase entitlements and improve rewards earned from work. It was to allow smooth transitions in and out of work, as claimants would not have to claim a different set of benefits when starting or ending a job. Please remind me: how is that working out for us?
Problems apparent now went unmentioned back in 2013. Design flaws such as the six-week waiting time for a first payment were then unknown—they are known now, so what are the Government going to do about them? There seems now to be an expectation that people claiming benefits are able to survive for a month and a half with nothing to live on. The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), who was the one originally involved in the inception and creation of this policy, proudly told journalists at the time that he could live on £53 per week. I wonder whether he could live on fresh air for six weeks.
For many of my constituents, universal credit has meant falling into debt traps, through taking out loans or advances through the DWP only later to have the cash removed from their already meagre payments. This is the reality of the roll-out of universal credit. What are this Government going to do about it? Even though we have pointed out the myriad problems with the system, I am still waiting, in the fourth debate, to hear anything come back from this Government. If the Government today, as I suspect they will, make a small advancement, that in itself would be an admission that the system is not working and it is time to halt the roll-out. Even back then, and on many occasions since, we have stood here and told the Government the problems. Government Back Benchers, failing in their mission to scrutinise the Government, have failed to accept that there are problems with this roll-out and instead have ignored them.
Each and every time my hon. Friend the Member for Airdrie and Shotts (Neil Gray) has met Citizens Advice, he has been informed that it is not allowed to perform the role of advocacy because it is not mandated to make representations on behalf of clients. This is a clear attempt to undermine the support available to people that makes sure they get the help they need. Worse than that, one of my constituents has had to wait 12 weeks before his universal credit payment came through, even though his change in circumstances was outwith his control. The DWP had not uploaded documents he had sent it initially with his claim, and when these documents were finally attached to his file some weeks later, as this was discovered, a further six weeks was added to his waiting time. That is the reality of universal credit. What will the Minister do to resolve the issue?
I am asking the Minister this: does he accept—[Interruption.] Of course he will have his time to answer—he has plenty of time. The fact is that universal credit is not fit for purpose and people are suffering. I urge him to halt the roll-out and fix the problems.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I congratulate the hon. Member for Banff and Buchan (David Duguid) on his maiden speech. He showed his obvious commitment to his constituency and it was kind of him to praise his predecessor. I, too, extend my good wishes to her.
There have been some outstanding contributions to what has been a fiery debate. I congratulate the Chairman of the Work and Pensions Committee, my right hon. Friend the Member for Birkenhead (Frank Field), on securing the debate and on the Select Committee’s timely report on the six-week wait for universal credit. I also congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on her excellent speech, as well as my hon. Friends the Members for Bishop Auckland (Helen Goodman), for Heywood and Middleton (Liz McInnes), for North West Durham (Laura Pidcock), for High Peak (Ruth George) and for Bermondsey and Old Southwark (Neil Coyle), along with the hon. Members for Glasgow South West (Chris Stephens) and for Lanark and Hamilton East (Angela Crawley). The hon. Member for Stirling (Stephen Kerr) took a sensitive and analytical approach to the report, and described what needs to happen in a measured way. She is not currently in her place, but the hon. Member for South Cambridgeshire (Heidi Allen) of course gave a characteristically bold speech.
This is the third debate on universal credit in the past month. Today, as in the previous two debates, the Government have been called on to reduce the six-week waiting period that applicants face. As we have heard, what some have called the “long hello” is believed to be one of the primary drivers of the rise in debt and arrears that we are now seeing. Some 49% of families who are in arrears under universal credit state that their arrears started after they made their claim and because of the waiting times to receive payments, support being delayed or stopped, or administrative errors.
On Monday the Chairman of the Backbench Business Committee, my hon. Friend the Member for Gateshead (Ian Mearns), told the House that as universal credit is being rolled out, social housing providers across the north of England are finding more and more of their tenants are going into rent arrears. The total debt of 10,500 universal credit claimants is nearly £4.2 million, with an average of just over £400 each. In Greater Manchester, where universal credit was first piloted, the average arrears for UC tenants is now £824 compared, with £451 for non-UC tenants. In London, it is even worse: councils such as Southwark are estimating average arrears of approximately £1,700 per UC tenant.
What about the private rented sector? We have heard some of the serious issues related to pre-emptive strikes in respect of tenancy agreements. A landlord contacted me because he was concerned about three of his tenants who are thousands of pounds in rent arrears. They had never previously been in arrears.
A reduction in the six-week wait would be a good start, so I look forward to hearing the Minister’s response on that. I was disappointed—as, I think, was Mr Speaker —to hear of certain revelations coming out in the media yesterday. I hope that the Minister will enlighten us as to whether the wait is going to be reduced by one or two weeks. Reducing the six-week wait would only be a start, because it will not address the significant design issues that we have seen since the start of universal credit.
Some examples of those design issues are: the monthly payment being made in arrears following a monthly assessment period, when most people in receipt of UC are paid weekly or fortnightly; the payment being made to the main earner of the household, predominantly the man; rent being paid to the claimant rather than to the landlord; self-employed people being subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; the real-time information flaws that my right hon. Friend the Member for East Ham (Stephen Timms) has mentioned previously, and for which there is no time limit to disputes, leading to more delays in payments; and, of course, the in-work conditionality coming down the track, which will mean a million working people visiting jobcentres while much of the Jobcentre Plus estate is being closed, and facing financial sanctions if they fail to work the hours their job coach deems they must.
In addition, reducing the waiting time does not tackle the chronic issues with implementation and functionality. A pregnant woman got in touch with me when a change in circumstances meant that she had to apply for universal credit because her ESA claim was closed. She could not apply online, and was given a number to call, then another one, then another one and finally, she was referred back to the original number. To say that training is needed is an understatement.
My hon. Friend the Member for Batley and Spen (Tracy Brabin) mentioned yesterday at Prime Minister’s questions the ridiculous position of one her constituents who did not have photo ID and had to have their identification verified by their doctor rather than being able to use their verified identification on the legacy benefits that they had previously been receiving. There are also issues with lost claims and so on.
The recent Social Security Advisory Committee report on in-work progression highlights those issues in its section on “Getting Delivery Right”. There is no getting away from the fact that the system is complex and more than struggling to cope, and that is not helped by the simultaneous closure of one Jobcentre Plus in 10. It must be recognised that the objective of simplicity should be for ease of access and navigation of the system by claimants. That is still not happening and must be addressed. I am pleased that the Government acceded to the need for Freephone numbers, but I would like to hear when they will be up and running—it is now three weeks since they were announced. We know that much more help is still needed.
Let me turn now to the cuts that were wielded to universal credit in the 2015 summer Budget. As the Institute for Fiscal Studies said at the time, they mean that the promise that work would always pay—a primary objective of universal credit—has been lost. Let us remind ourselves of those cuts. They include: cuts to work allowances which, for example, mean that a couple with two children claiming housing costs will receive £192 a month, down from £222 a month; cuts to nearly a million families with more than two children; and cuts to disabled people on ESA work-related activity group of £1,500 a year when they transfer on to universal credit’s limited capacity to work. There is also the freeze in the uprating of universal credit to take account of inflation.
Those cuts will see 3 million families worse off by as much as £2,600 a year. For some it is even worse. For example, in real terms, a single parent, who is working as a full-time teacher, with two children will be £3,700 a year worse off. The cumulative effect of these cuts to universal credit will see more working-age people and their children pushed into poverty. The Child Poverty Action Group has estimated that, by 2022, an additional million children will have been pushed into poverty, 300,000 of whom will be under five. They will be accompanied by 900,000 adults.
Although reducing the waiting period is a start, it will not be sufficient to prevent rising debt, arrears, and worse. That is why Labour has called for universal credit to be paused while it is fixed. As I have said before, in addition to reducing the six-week wait, we want all claimants to be able to decide whether they want fortnightly or monthly payments, whether they want payments split in the household and whether they want the housing payment to be paid directly to the landlord. Fundamentally, we want investment in universal credit to ensure that work does always pay and that our children and young people are not being pushed into poverty, left destitute or worse.
With nearly a million people set to move on to universal credit over the winter, the Budget gives the Government an opportunity to deliver on their promise
“to make the country work for everyone”.
I hope that they take it.
The Minister for Employment (Damian Hinds)
I congratulate the right hon. Member for Birkenhead (Frank Field) on securing this important debate today and also thank Members from across the House for such a good and constructive debate. Unfortunately, my time is now extremely short, but I will try to respond to as many points as I can.
In particular, I wish to mention the absolutely outstanding maiden speech from my hon. Friend the Member for Banff and Buchan (David Duguid). He paid generous tribute to his predecessor and spoke about how he was focused on securing the best Brexit for businesses in his constituency, particularly those around fishing and farming. He talked about some of the other opportunities for the future around oil and gas and tourism. Overall, he painted a colourful picture of his constituency and what a wonderful place it would be in which to live. Clearly, he will be a great asset to this House and to our democracy. The accents from his part of Scotland are always rich and characterful, but they sound so much better when they come from this side of the House.
Universal credit has been the subject of a number of debates over recent weeks, but it remains important not to lose sight of why this vital reform is needed, and the key principles behind it, which my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) outlined effectively. Today on the main out-of-work benefits, someone who does more than a minimal amount of work would have to go through the upheaval of changing to a different benefits system. That can deter some people on jobseeker’s allowance from taking on seasonal work, for example, or a trial position. The obstacles to starting work can act even more strongly for people with disabilities who are on ESA. On ESA, people can only do so-called “permitted work” of up to £120 a week. There is no “permitted work” under universal credit, because work is permitted full stop. People do not have to make a choice between starting a career and getting support through the benefits system.
As my hon. Friend the Member for Torbay (Kevin Foster) said, universal credit simplifies the system, merging six benefits into one, and asking people to deal only with one part of Government, not three. It is paid monthly in arrears, like most jobs these days, allowing claimants to structure their expenditure around a monthly fixed payment day. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) asked me to outline how many people in work are paid fortnightly these days. The answer is about 3%. The majority of people are paid monthly, a sizeable minority are paid four-weekly and, of course, quite a lot of people are still paid weekly. Overall, about 70% of people in work are paid either monthly or four-weekly.
The month-long assessment period starts straightaway for people transferring from another benefit, and for members of certain vulnerable groups. For newly unemployed people, eligibility—and, therefore, the assessment period—starts seven days later. These waiting days reflect the principle that benefit support is not intended to cover very short periods of unemployment. Of course, they also exist in jobseeker’s allowance. The monthly in-arrears payment cycle is fundamental to the design of universal credit, meaning that an individual’s benefit payment each month can reflect what they earned in that month, and can take account of all the different patterns in which different people are paid.
Beyond the month-long assessment period, there is a further time of up to a week for final calculation, verification and making the payments. All DWP benefit payments, including universal credit, are made using the BACS system, which takes three working days to process. A claimant’s first universal credit payment due date will be seven calendar days after the end of their initial assessment period, and subsequent pay days will be on the same date each month thereafter. If the UC pay day falls on a weekend or bank holiday, it will be brought forward to the nearest working day. That is what the seven days after the monthly assessment period are for: three days for calculation, data verification and BACS processing; and four days to allow for the fact that the payment due date may come on a Saturday, Sunday or bank holiday, to then allow us to pay claimants ahead of that due date.
If someone is leaving a job, they normally have a final pay packet, and some may also have redundancy pay. If people are moving on to universal credit from another benefit such as ESA, JSA or income support, paid fortnightly in arrears, they will have their final payment from that benefit. We do realise that different people’s circumstances vary, so advances are therefore available.
My hon. Friends the Members for Redditch (Rachel Maclean) and for West Aberdeenshire and Kincardine (Andrew Bowie) reminded us that no one need go five or six weeks without money. People can get an advance payment of up to half of their indicative award, recouped over six months or, as we were reminded, in some cases longer. Advances are available and paid within five working days. In an emergency, they can be paid on that same day. These advances are not like a loan in the sense that no interest is payable, and they are not like a wage advance in the sense that they do not just get taken fully out of the first wage packet.
I must stress—it is worth repeating—that the universal credit payment cycle is then monthly, with the payment made on the same date each month, unless that date falls on a Saturday, a Sunday or a bank holiday, in which case the payment would be advanced to the nearest working day.
This monthly assessment is a much better system than the tax credits system, which works on estimates and often involves big adjustments at the end of the year, including requiring people to pay back sometimes large sums, which they might, of course, already have spent, as my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) rightly reminded us.
So UC erases the binary distinction between in work and out, and removes the need to flip in that way from one benefit to another and then back again. Three separate peer-reviewed studies show that people are more likely to be in work after six months if they are on UC than if they are on JSA. Those are matched samples comparing people who are similar in other respects, apart from the benefits they were on.
My hon. Friend the Member for Stirling (Stephen Kerr) asked about the direct payment of rent. Since the then Labour Government’s reform of 2008, the default position has been that people in the private rented sector handle their own rent. Universal credit extends that principle to people renting from a council or housing association, but we can pay rents direct to landlords, and a sizeable minority of social sector tenants on universal credit have that arrangement right now. We are further improving the set-up process to make rent payment direct, where appropriate, for the social sector—through the trusted partner status—and for private rentals.
We are also able—the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) asked about this—to make payments more frequently than monthly. That can be fortnightly or, indeed, weekly, when that is necessary, and we can split payments between members of a couple.
Universal credit is a vital reform that changes how we support people out of work and in work and how we help them progress from one to the other. It is a lot of change—a new benefit, a new IT system, a new operational system and new ways of working with partners—and, yes, that does bring with it some challenges. We will continue to work with claimants, stakeholders, partners, and hon. and right hon. Members on both sides of the House to resolve those challenges as they arise and to improve universal credit as it is introduced across the country. However, it is important that we continue with universal credit in order to realise the benefits that it brings, including boosting employment by an estimated quarter of a million when fully rolled out.
Universal credit is being introduced at a measured pace over nine years. Between last month and January, it will go from covering 8% of the benefits-claiming population to 10%. This gradual, careful approach, with planned pauses in the roll-out to learn and to respond to issues as they arise, means we can continually adjust and evolve the programme.
Universal credit is the biggest modernisation of the welfare state in a generation. Already, it is transforming lives, and we are determined to see this reform through.
Frank Field
Everybody who has spoken on both sides of the House has called on the Government to move and to change their approach. Instead of inviting us to attend to our jobcentres, I will be writing to the Secretary of State and the Minister of State to invite them to come with me and my colleagues to the six worst blackspots in terms of how universal credit is affecting people’s lives, and to do so before the Budget.
Question put and agreed to.
Resolved,
That this House notes the First Report of the Work and Pensions Committee, Session 2017-19, Universal Credit: the six week wait, HC 336; and calls on the Government to reduce the standard initial wait for a first Universal Credit payment to one month.
Frank Field
On a point of order, Madam Deputy Speaker. I wish to seek your advice. How might I ask the Secretary of State to come before the House on Monday to respond to the unanimous recommendation we have made to the Government to begin the reform of universal credit, so that some of our constituents might have slightly better Christmases than they would otherwise?
Madam Deputy Speaker (Mrs Eleanor Laing)
I thank the right hon. Gentleman for his point. I understand why he wishes the Secretary of State to come to the House, but the Minister has just been before the House, addressing those very points. I am quite sure that the Secretary of State will note what has been said in the House this afternoon and that he will note the request from the right hon. Gentleman.
Frank Field
Further to that point of order, Madam Deputy Speaker. The Minister of State, bless him—[Laughter.] No, seriously, because he is an incredibly good guy. He made his speech before we had made a collective decision. We are in a new position now. The whole House has unanimously asked the Government to move, and that is what I want the Secretary of State to address on Monday.
Madam Deputy Speaker
I thank the right hon. Gentleman for making his point. He knows, of course, that it is not a matter for me, but the Minister is, as the right hon. Gentleman pointed out, sitting at the Dispatch Box and I am quite sure that he and the Secretary of State will pay attention to the points that the right hon Gentleman and all hon. Members have made this afternoon.
We now come to the Back-Bench debate on defence aerospace industrial strategy. Come on: everybody leaving, leave quickly. It is not fair. There is little time left.