Universal Credit Roll-out: Nottingham

Wednesday 14th November 2018 Westminster Hall

11:00

[Alex Norris (Nottingham North) (Lab/Co-op)]

I beg to move,

That this House has considered the effect of the roll-out of universal credit in Nottingham.

The latest stage of the universal credit roll-out in my city took place about a month ago, which is why I sought this debate. One of the vagaries of this place is that we cannot always get the debates that we want at the time we want them, so I am pleased to be able to raise the subject at this important early stage of the roll-out.

Some claimants in the city were already on universal credit, but many will remain on legacy benefits for a while longer, until managed migration. For the past month, however, all new claimants in our city have had to claim universal credit. So far, so simple, but having seen how the roll-out has gone elsewhere and its impact in communities that are very similar to mine, my constituents and I are anxious, fearing that this will be anything but simple. We are anxious that it will mean delays, reductions in benefits, debt, rent arrears, visits to food banks and more poverty. My colleagues in Nottingham—I am glad to be joined by three of them—and I do not accept that for our community. I believe that the roll-out should be stopped.

I will talk about experiences in similar parts of the country to ours, and specific concerns that I hope the Minister can address. It seems incredible that universal credit was first announced eight years ago. The rationale was to replace the six working-age benefits. The aim was to simplify the benefits system, improve work incentives, reduce the potential for error and fraud, and mitigate poverty among low-income families. Those are broad principles that we share—I certainly do—but universal credit as it is today is not that system, and it is the most vulnerable people who are suffering and will continue to suffer as a result.

We are pleased to have campaigned for—and, in the Budget two weeks ago, secured—money back into universal credit. That is, however, only a small fraction of the £7 billion in social security cuts still to come by 2022-23, according to Institute for Fiscal Studies analysis. That will both make families worse off and be worse for the Government and the state of the public finances—a point I shall cover later.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this matter before the House. What he cites is not specific to Nottingham; it applies to other parts of the United Kingdom, including my constituency of Strangford. Does he agree that this “simple” scheme, which is easy for those who are computer-literate, is not so simple for many? More consideration must be given to those who are not able to claim correctly due to genuine misunderstanding and miscommunication, given that they can be penalised with sanctions if they cannot work through the system. The system simply does not work for the ordinary person.

[Alex Norris]

The hon. Gentleman is right that what I have to say about Nottingham is informed by the experience of other parts of the country, so it will be true for every community in the land. Yes, the system is supposed to be simple—we want a simple system that promotes work—but there are lots of pitfalls, which people with the best of intentions are falling into. I completely share his view that such people ought to be supported.

In June, I was startled to read that the National Audit Office had found that universal credit might end up costing more than the existing system, that it cannot prove that it gets claimants into work, and that it is unlikely ever to deliver value for money. We should all look at that.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

As my hon. Friend knows, the false economy of some of the new systems worries me. That is one of the reasons why I have always argued that advice services should be a statutory function. Citizens Advice states that for every £1 invested in advice services, we can save £10 from people falling out of the benefits system because of mistakes and so forth. Is not the worry about this particular form of the universal credit roll-out that it is leaving people confused and in a messy situation, without proper advice from the system to fall back on?

[Alex Norris]

I thank my hon. Friend—my neighbour—for his contribution. I absolutely agree with that. I am passionate about advice services. As he knows, in October last year I led a debate in Westminster Hall on advice services in our city. They do incredible work to help people find a way through that fog, but they are clearly under real pressure. Our council is also under extraordinary financial pressures, but has put more into the area, trying to support it when many other services are not being treated similarly. I am pleased it is doing that, but a real need is clearly building up. I will cover much of that.

It is important to understand the context of what has happened elsewhere. The Trussell Trust found that 12 months after roll-out, on average, food banks see a 52% increase in demand, compared with 13% in areas that have had universal credit for three months or less. The Children’s Society has estimated that under the proposal for an earnings threshold, about 1 million children living in poverty will miss out on free school meals. That will almost entirely affect working families. Furthermore, under universal credit, £175 million for families with disabled children will be cut. Analysis by Contact suggests that because of the 50% cut to the child disability payment under universal credit, 100,000 families with disabled children will be worse off by more than £1,750 per year. Also, a report by Policy in Practice has indicated that 750,000 households on “disability benefits” will lose, on average, £76 per week.

[Vernon Coaker (Gedling) (Lab)]

What my hon. Friend says is the reality. Whatever the Minister says, the reality for people in Nottingham or my constituency is that they lose lots of money. In many cases, they received x amount under one set of benefits, but lose significant sums of money when they move to universal credit. Instead of living in a parallel universe, the Minister should come to the real world.

[Alex Norris]

I share that view, and it saddens me. I have been a Labour party member for all my adult life, and I am proud to be a Labour party Member of Parliament. The meaning of “Labour” is work, so we believe that work is good for people. We want people to work, so when we hear of a welfare system that promotes work but provides a safety net, we think, “Yes, that’s good. Even better, it’s going to be simple.” What was and is never explained is the bit after the asterisk: “Also, it’s going to be a vehicle for reducing the benefits bill”—even though there is no evidence to suggest that it will succeed. That is why we have a lot of the challenges and the chaos. The Library estimates that in February this year, nearly 13,000 people were not paid in full on time, and 7,500 people did not receive any payment at all.

[Lilian Greenwood (Nottingham South) (Lab)]

Not only are people not paid on time, but many people have their claims rejected. They then have to go through the process of seeking mandatory reconsideration and sometimes an appeal. A large proportion of those appeals are successful, but in the meantime people have racked up debts, and in some cases even been evicted from their home. That has a significant impact on them, their families and their mental health. Is not that failure to maintain someone’s benefits during an appeal a problem with the system that the Government should address?

[Alex Norris]

I completely agree. When claimants are successful on appeal or at tribunal, they get their payments backdated, and I sometimes read, “So that’s all okay, then.” It is not, because in the meantime that has put extraordinary pressure on people who are, by definition, vulnerable. That is not to mention the anxiety. I am grateful to colleagues for their contributions.

I have listed quite a few numbers; it is important to start with the context and what has happened elsewhere, which is what I think is coming to us. We have to remember, too, that behind every one of those statistics is a human being, a family and a life. We in this place have a real duty of care to ensure that we look after those people, and that the changes that come about from legislation from this place support them.

In my constituency, about 20,000 people either already receive universal credit or—the bigger chunk—are on the six legacy benefits and will move on to universal credit at some point. That is about one in four eligible adults. The issue is significant, so it is important for me to focus on it in my role. We hear the stories about what has happened; they show the devastation of lives and the injustice.

I have received support and information from local advice services; my hon. Friends the Members for Nottingham East (Mr Leslie), for Nottingham South (Lilian Greenwood) and for Gedling (Vernon Coaker) and I recently attended a meeting with Advice Nottingham. We were grateful to hear the direct experiences of those who give advice and those living in the benefits system. Beyond “Brexit”, “hostile environment” must be the defining political term of the year. I contend that the term applies not just to the Home Office’s immigration policies and Windrush, but to welfare. Having talked to those individuals, I felt that they were the victims of such an environment. Slightly beyond universal credit, my friends at Disability Direct in Nottingham say that at tribunal, they are successful between two thirds and 70% of the time. If those who appeal at tribunal are winning more than two out of three times, the system does not work.

I would like the Minister to consider a couple of practical issues that have been raised with me. The first is on digital support and access to online services. Nottingham City Council has very helpfully provided a list of public access computers to try to quell worries. Advice Nottingham says that it was assured by the Department for Work and Pensions that support would be available from work coaches at all jobcentres, and that any new universal credit claimant needing support would be able to get help from a jobcentre on demand. We have three jobcentres in Nottingham city: two in the city centre and one in Bulwell in my constituency. Those are obvious locations for a jobcentre, but we are a big city, so many people must travel more than half an hour by tram or bus to get to them. There is a real cost implication for vulnerable people, especially if multiple visits are needed. That needs consideration.

We are in the very early stages of universal credit, but I have already heard an example from Advice Nottingham of how it is not working in the constituency of my hon. Friend the Member for Nottingham South; I hope she does not mind my borrowing it. A client wanted to make a universal credit claim and had no digital support at home—no computer or smartphone. They travelled for 35 minutes, mainly by tram, to their nearest jobcentre, as they had been told to, at a cost of £3.50 for a day ticket. When they arrived, the work coach told them to visit their local advice agency, which was Clifton Advice Centre, where they would get help. No one at the jobcentre offered to help them complete their application or pointed them in the direction of the local library, where they could get digital support. Instead, they travelled back home and made an appointment to see a welfare benefits adviser, losing time, money and peace of mind in the process. The system is not working.

I have spent time with my local jobcentre staff, and I know them to be committed folks with the best of intentions who are making the best of a difficult situation, but they must have the right skills.

[Lilian Greenwood]

My hon. Friend makes an important point about people’s access, even to make a claim. My constituent Errol Richards spent the whole of the last two weeks trying to make an initial claim, without success. He initially tried to register his claim at Jobcentre Plus, but his claim crashed before he could attempt to submit his identification documents, and there was no scanner available. He then made two lengthy visits to different libraries in Nottingham, but still could not submit the initial claim because the universal credit system crashed again. Should the Government have not addressed those problems and ensured that their IT systems were sufficiently resilient before trying to roll out universal credit to thousands of additional claimants?

[Alex Norris]

I am very sad to hear that contribution. Clearly, that individual is trying to do the right thing, and the system is not supporting them. That is not particular to Nottingham; it has happened throughout the roll-out process. It is not acceptable to impose universal credit on our community while knowing that these challenges would happen. Accessibility is a real issue. The one-size-fits-all approach of digital technology must be considered, because that poses a challenge in communities such as mine.

My advice to constituents on all big changes such as these is to engage and be proactive, and not to put letters in a drawer. When people come to see me at surgeries, I wish, as all other hon. Members do, that I could have seen them two weeks earlier, or one letter left in a drawer earlier, because that would have helped. I was talking to a colleague last night while rehearsing some of my arguments. His constituency is further ahead in the roll-out, and he said that a constituent had tried to be proactive because, having heard about all the challenges, they did not want delayed payments. The person was on legacy benefits and did not need to transfer, but they transferred anyway, so their universal credit application was, in essence, a new claim. That unnecessarily kicked them off the old legacy benefits and into the new system, which meant that they would lose their transitional protection. Even when we try to help, the perverse incentives in the system mean that there is a risk that we do more harm than good.

Christmas is coming, and in Nottingham we have big retail and services sectors, which will mean that for many constituents and residents in the city, there will be a chance for extra hours. There is not enough awareness of, and support for people to understand, how changes in their income will affect their universal credit. The money comes into their bank, and they realise they are not getting what they had banked on, because those extra hours do not necessarily mean the extra income that they thought they would get. I have been contacted by the GMB trade union. I refer colleagues to the Register of Members’ Financial Interests, because I have long history of campaigning with it. It has produced useful advice, because it fears that staff will not know about that. Across the system, we need people to understand that if they do more, they must factor that into the calculation; otherwise, they will get a nasty surprise.

I feel particularly strong about my final point. Many aspects of universal credit are exceptionally important, which is why we are having this debate. They get a lot of coverage, but the issue of joint claims and split payments does not. At the moment, when applying for universal credit, couples make a joint claim and a single benefit award goes to the household—either to one recipient or into a shared bank account. In the past, at least child tax credit could be expected to have gone to the woman or the mother. I was responsible for domestic abuse services in Nottingham for a number of years; that money would offer a way for a woman to leave an abusive situation, because it would allow them to pay for petrol, or a train or bus ticket, so that they could get out of that situation.

The single payment creates an opportunity for abusive partners to exert financial control over their spouse by withholding funds and making it difficult for them to access money to meet their and their children’s needs, or to leave the situation. Refuge reports that one in five women and one in seven men experience that type of financial abuse. Survivors of domestic abuse can request that their payments be made separately as part of an alternative payment option, but the guidance given to work coaches is that split payments can be considered only where the claimant notifies the DWP of financial mismanagement, financial abuse or domestic abuse in the household. The work coach then makes a decision on whether to grant that split payment, but the other member of the household can request that the single payment be reinstated.

Eight-five per cent. of women surveyed by Women’s Aid said that requesting separate payments would worsen the abuse at home. People live in a dangerous fantasy land if they think that a woman will march down to the jobcentre, possibly with her abuser, and request that payments be split because at some point she might want to leave that abusive relationship. That is unnecessary and damaging, and it needs to be resolved straight away. The Scottish Parliament has already passed legislation to split payments by default; the implementation is yet to be finalised, but it is vital that the Government pay full attention to that and seek to replicate it as soon as possible.

We want a welfare system that promotes work, but protects people in tough times; however, we have made our safety net out of barbed wire. That is wrong. Advice services in Nottingham are doing their best to help; Nottingham City Council is doing its best; DWP staff will do their best to make it work. Fundamentally, the system does not work; it should not be imposed on my community until it does.

11:18

[The Minister for Employment (Alok Sharma)]

It is an absolute pleasure to serve under your chairmanship, Mrs Moon. The hon. Member for Nottingham North (Alex Norris) gave us an interesting contribution, and we heard interventions from a number of colleagues. I will respond to those, but I start by putting into context where we are in terms of job figures.

I suspect we all agree that ultimately we want a welfare system that supports individuals, is fair to taxpayers and helps people into work. Yesterday, the Office for National Statistics published employment statistics that showed more people in work now than at any time. The rate of women in work is at a near record high. The employment rate for people with ethnic minority backgrounds is at a record high. Youth unemployment has halved since 2010. Since 2013, almost an extra 1 million people with disabilities have come into the workforce.

Some 3.3 million jobs have been created since 2010. There is always a discussion about what kind of jobs those are. Some people suggest that they are low-paid jobs that are not permanent, but that is not the case: 75% of the jobs created since 2010 are full time, permanent and in higher-level occupations that attract higher salaries—not my statistics, but those of the Office for National Statistics.

[Mike Amesbury (Weaver Vale) (Lab)]

I thank the Minister for giving way—

[Mrs Madeleine Moon (in the Chair)]

Order. I am afraid that in a half-hour debate, interventions from the Front Bench are not permitted.

[Lilian Greenwood]

I am sure we have all heard what the Minister has said. Of course we welcome the fact that more people are getting into work, but many of the cases that we deal with in our constituencies are of people who are on universal credit not because they are out of work, but because they are in work and simply not earning enough to support their families. Many of the ways in which universal credit works do not support people who are in work, so people who have a fixed pay date but get paid early one month because the date falls on a weekend or a bank holiday find that they get two pay sessions in their universal credit assessment period and lose their universal credit altogether. Why is the Minister not addressing those concerns for people who are in work but not earning enough to be out of poverty?

[Alok Sharma]

I had just started to set out the case. Opposition Members have made a case, and I am responding to it.

I return to the point about the jobs that are being created. There is always a lot of noise about zero-hours contracts, and I am pleased that we as a Government have banned exclusivity in them, but in the economy right now, fewer than 3% of jobs are classed as zero-hours contracts and those individuals are working an average of 25 hours a week. The number of zero-hours contracts has come down this year.

I hope we are all pleased that wages are growing at the fastest rate in almost a decade. That is an incredibly positive development and I hope it will continue. I do not want to be churlish, but several hon. Members who were here in 2010 will remember that we were told by Opposition Members that 1 million jobs would be lost as a result of the Government’s policies. That has not happened. We have a buoyant jobs market with more than 3 million jobs created since 2010. Our welfare reforms have played a big part in ensuring that we are helping people get into work.

When we talk about universal credit, we have to compare it with the legacy benefit system that it replaces. As constituency MPs, we know that the legacy benefit system is incredibly complicated, with six benefits delivered by three different Government agencies, effective tax rates of 90% for some people and cliff-edges that disincentivise people from taking on work beyond a certain number of hours. As a result, 1.4 million people were trapped in benefits for almost a decade. Hon. Members talk about the amount of money in the system, but under the legacy benefit system, £2.4 billion of benefits are not claimed. That will change under universal credit, which will benefit 700,000 households to the tune of an average of £285 a month.

When it comes to universal credit, we are providing that support. I know that the hon. Member for Nottingham North has visited his jobcentre and sat with jobcentre staff. I am pleased that he has praised their work. He will know, because he has sat in on those interviews—as I saw in his newsletter—and seen the interaction, that for the first time in the welfare system, we are ensuring that one-to-one support is provided to the individuals we are interacting with. As part of my role, I regularly go up and down the country visiting jobcentres. Invariably, I hear from jobcentre staff that they feel that this system allows them to do what they came into the system to do—provide that one-to-one support. I find that incredibly heartening.

As I said, the cliff-edges are gone and we have a smooth taper. Under universal credit, people are getting into work faster, staying in work longer and earning more. In terms of support in the system, we introduced an extra £1.5 billion of support earlier this year. I am disappointed that Opposition Members did not vote with us on that, because it meant that the seven-day waiting period was abolished; two weeks of run-on in housing benefit was made available, which does not have to be repaid; and people can now get 100% advances on day one, if that is what they need, to help with any cash-flow issues. We can see that that is working, because 60% of people who are now coming on to universal credit are taking up advances. That is a result of the support that their work coaches are providing.

In last month’s Budget, another £4.5 billion net was injected into universal credit. Work allowances are up by £1,000, which will benefit 2.4 million families up and down the country, particularly those on low incomes, to the tune of £630 a year. In terms of helping individuals, as we have ensured that there is a two-week run-on for those who are on housing benefit coming on to universal credit, we shall also ensure that there is a two-week run-on of out-of-work Department for Work and Pensions legacy benefits for those who come across to universal credit as part of the managed migration process. Again, that will help more than 1 million households throughout the country.

[Lilian Greenwood]

Many people will have welcomed the Chancellor’s announcement that the universal credit work allowance was to be raised by £1,000, but it was raised for only some universal credit recipients. Admittedly, it increased for people with disabilities and parents with current responsibilities for children, but low-paid working couples whose children have left home or who do not have children were excluded. Poverty is poverty. Why was support provided for some families and some individuals but not others? Why did those working families not benefit from the £1,000 increase?

[Alok Sharma]

I would have more sympathy for the hon. Lady’s argument if she had voted to support the Budget, which Opposition Members did not do. I feel strongly that although it is right that hon. Members on both sides of the House raise the issues they have with any system or policy of the Government, the point where money is being put into the system to support their constituents and mine is the point at which they have to follow through and support those policies.

The hon. Member for Nottingham North has engaged with his jobcentre by visiting and taking part in a Disability Confident event organised by it, but that is not the same for all hon. Members present. I would encourage every single hon. Member—[Interruption.] I did not allude to the hon. Member for Gedling (Vernon Coaker), but there are hon. Members who have raised issues in the debate who have not visited their jobcentres recently. I encourage all hon. Members to engage with their jobcentres.

Where hon. Members have individual issues, they should raise them directly with the jobcentre and they should feel free to write to me as the Minister responsible. Again, I do not wish to be churlish, but—if I may put it like this—there has not been a large amount of correspondence about universal credit from hon. Members representing Nottingham, but where there are issues, they should feel free to raise them.

In terms of preparation by the local jobcentre, I had an opportunity yesterday, ahead of the debate, to speak to the district lead for Nottingham who is responsible for the three jobcentres. There has been a huge amount of engagement: 350 stakeholders have been met and eight or nine stakeholder events have taken place, including meeting landlords. That is all part of ensuring that we deliver what we all want for our constituents—a system that works.

Whatever our political differences, one thing that we can unite on is that we want a system that delivers, particularly for the most vulnerable, which is precisely what universal credit is doing. We want a system that supports the most vulnerable, that is ultimately fair to taxpayers, and that helps people into work.

Question put and agreed to.

11:30

Sitting suspended.