Universal Credit and Debt

Debate between Lord Sharma and Chris Stephens

Wednesday 5th June 2019 Westminster Hall

[Alok Sharma]

Also, individuals will receive that money as an advance to their universal credit payment, so they will receive 13 payments over a 12-month period. I make it absolutely clear once again that, as I hope colleagues will acknowledge, these are interest-free advances. Of course, from October this year, the Government will reduce the maximum rate—

[Chris Stephens]

Will the Minister give way?

[Alok Sharma]

I will not, as there is quite a lot to get through.

From this October, the Government will reduce the maximum rate at which deductions can be made from a universal credit award from 40% to 30% of the standard allowance. By the end of 2019-20, it is forecast that around 290,000 universal credit households will have had deductions reduced, by an average of £295 over the year. It is already possible to extend the period over which advances are repaid to 15 months in certain circumstances, and of course, as Members have acknowledged, from October 2021, the maximum period will be extended to 16 months for all claimants.

One issue not touched on in the debate was payment timeliness, but it is worth pointing out that it has been raised in previous debates, certainly during my time as a Minister. Payment timeliness has improved significantly. We now pay around 85% of new claimants of universal credit in full on time. In addition, 95% of claimants are paid in full within five weeks of their payment due date. If there are delays in making the first payment, that can be due to outstanding verification issues, such as the need to provide bank statements or proof of rent. It can also be due to a claimant not signing their claimant commitment. For ongoing claims, payment timeliness is around 98%.

The shadow Minister, the hon. Member for Weaver Vale (Mike Amesbury), raised the issue of employment. The whole point of simplifying the welfare system is to remove the cliff edges and the disincentives to take on work and extra hours that existed under the legacy benefit system. We now offer claimants one-to-one support to help them to move into work.

I hope that colleagues will acknowledge that we are seeing record rates of employment, month after month. The shadow Minister talked about zero-hours contracts, but he will know that less than 3% of people in employment in the UK are on zero-hours contracts. That figure has fallen this year. Indeed, those on zero-hours contracts are doing about 24 hours of work a week on average.

We have recognised that we need to provide a consistently high level of support to those who may have difficulties in making a universal credit claim. That is why we announced our partnership with Citizens Advice and Citizens Advice Scotland, which are now funded to provide the “help to claim” service for claimants.

In the past, a number of colleagues have spoken about debt advice. They will know that debt advice is now fully funded by the financial services levy, and that service delivery is commissioned by the Money and Pensions Service, which was launched in January this year. In 2019-20, MaPS will provide around 560,000 sessions of debt advice in England. It is also worth noting that in addition to the funding that Citizens Advice receives for the “help to claim” service, it will, like other organisations, receive additional funding from MaPS to provide debt advice.

A number of colleagues raised the issue of rent arrears. I point out that a report published in July 2018 by the National Federation of ALMOs, or arms-length management organisations, showed that over three quarters of their tenants who had started claiming universal credit were already behind with their rent prior to commencing their claim. Also, research that we have carried out shows that the proportion of universal credit claimants who were in arrears at the start of their claim fell by a third after four months. In the universal credit full service claimant survey, which was published by the DWP in June 2018, 84% of claimants said that they felt confident about managing and paying their housing costs.

My hon. Friend the Member for Gloucester raised the issue of rent arrears and asked what further work we were doing on it. I can confirm that we are carrying out further analysis with a number of housing providers to investigate and understand the true level of rent arrears among their tenants, and what is causing those arrears. Of course, when we have that information, we will publish it.

A number of colleagues raised the issue of tax credit debt. Her Majesty’s Revenue and Customs already seeks to recover overpayments of tax credit debts. When a claimant moves on to universal credit, any outstanding debt is transferred to the DWP for recovery. This does not include debt that is subject to ongoing disputes or appeals, and HMRC tells the claimant the amount of debt that is being transferred to the DWP for recovery. HMRC and the DWP continue to work closely to improve the claimant journey. This includes having a joint inquiry team to handle any issues that tax credit customers might experience during their move to universal credit. Of course, if claimants are struggling with the rate of repayment applied, they can ask the Department to review that rate.

A large number of points were made during the debate, so I say to hon. Members that if they want to meet me separately to discuss any points in more detail, I am very happy to do that, or they can write to me. However, in the remaining couple of minutes that I have, I will try to cover off some of the points made in the debate.

On the discussion about poverty, I point out that income inequality and absolute poverty are lower now than in 2010, and indeed the number of children—

Draft Social Security Coordination (Regulation (EC) No 987/2009) (Amendment) (EU Exit) Regulations 2019 Draft Social Security Coordination (Council Regulation (EEC) No 1408/71 and Council Regulation (EC) No 859/2003) (Amendment) (EU Exit) Regulations 2019 Draft Social Security Coordination (Regulation (EC) No 574/72) (Amendment) (EU Exit) Regulations 2019 Draft Social Security Coordination (Regulation (EC) No 883/2004, EEA Agreement and Swiss Agreement) (Amendment) (EU Exit) Regulations 2019

Debate between Lord Sharma and Chris Stephens

Wednesday 20th March 2019 General Committees

[Alok Sharma]

I note the hon. Lady’s point but, as I said, the impact assessment was in relation to any material changes. We do not believe that there are any, as these are merely technical changes to retained law.

A point was raised about data-sharing. We will of course continue to work closely with the EU so that the first port of call for contribution queries is other member states. The instruments include provisions to ensure that the UK can continue to share data with EU member states when they are applying the co-ordination regulations. If I have not been able to answer any questions—

[Chris Stephens]

The Minister is obviously going to tell us that he is going to write to us on some of the questions. Could he also write to members of the Select Committee on Work and Pensions about this? Will he be liaising with that Committee on the regulations in the event of no deal, and what it means for social security claimants?

[Alok Sharma]

I will, of course, write to the hon. Gentleman. When it comes to the Select Committee and other bodies of the House, there is always an opportunity to have a dialogue with them. As he will know, DWP Ministers are in front of the Select Committee on a regular basis—I will be making another appearance in a few weeks—so we are always happy to liaise.

In conclusion, the Government are committed to ensuring that the social security system works for everyone post exit day. The draft regulations will help to do that by fixing deficiencies in retained EU law. I therefore commend them to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Social Security Coordination (Regulation (EC) No 987/2009) (Amendment) (EU Exit) Regulations 2019.

Draft Social Security Coordination (Council Regulation (EEC) No 1408/71 and Council Regulation (EC) No 859/2003) (Amendment) (EU Exit) Regulations 2019

Resolved,

That the Committee has considered the draft Social Security Coordination (Council Regulation (EEC) No 1408/71 and Council Regulation (EC) No 859/2003) (Amendment) (EU Exit) Regulations 2019.—(Alok Sharma.)

Draft Social Security Coordination (Council Regulation (EEC) No 574/72) (Amendment) (EU Exit) Regulations 2019

Resolved,

That the Committee has considered the draft Social Security Coordination (Council Regulation (EEC) No 574/72) (Amendment) (EU Exit) Regulations 2019.—(Alok Sharma.)

Draft Social Security Coordination (Regulation (EC) No 883/2004, EEA Agreement and Swiss Agreement) (Amendment) (EU Exit) Regulations 2019

Resolved,

That the Committee has considered the draft Social Security Coordination (Regulation (EC) No 883/2004, EEA Agreement and Swiss Agreement) (Amendment) (EU Exit) Regulations 2019.—(Alok Sharma.)

Universal Credit

Debate between Lord Sharma and Chris Stephens

Monday 14th January 2019 Commons Chamber

[Alok Sharma]

My hon. Friend is right to say that there will be more money in the system. I should point out that, under the legacy benefits system, there is £2.4 billion of unclaimed benefits. That will change under universal credit, supporting an estimated 700,000 households who will get paid their full entitlement.

[Chris Stephens (Glasgow South West) (SNP)]

Many Opposition Members take representations from trade unions. They are the voice of the DWP workforce, but it often falls on deaf ears in the Government. Is not the reality that the final year of the benefit freeze absolutely undermines any changes that Ministers are trying to make to the benefit system? Will he tell us what representations he and his Department are making to the Treasury to scrap the final year of the benefit freeze?

[Alok Sharma]

I am not going to apologise for repeating that the reason we made so many difficult decisions when we first came into office and in subsequent years was the record deficit left by Labour—[Interruption.] There is no getting away from that. I have already made it clear that when it comes to issues around uprating, these will be announced in the appropriate way to Parliament.

Universal Credit: Managed Migration

Debate between Lord Sharma and Chris Stephens

Tuesday 8th January 2019 Commons Chamber

[Alok Sharma]

My hon. Friend is absolutely right. There will be that extra money. As I have said, this is about making sure that we target funds at those who need it most. That is why we introduced changes in work allowances in the Budget, which will make a difference to people with children and, of course, those with disabilities as well.

[Chris Stephens (Glasgow South West) (SNP)]

Will the pilot just move 10,000 people on to the existing system, or will there be meaningful changes before it begins, as requested by the Select Committee and by stakeholders? Will the Minister look at the position of individuals who turn down jobs involving zero-hours contracts, who are liable to be sanctioned under universal credit but would not be sanctioned under legacy benefits?

[Alok Sharma]

I am always happy to have a detailed discussion with the hon. Gentleman on any issues, but let me commend to him our response to the Social Security Advisory Committee’s recommendations. As he will see, we have taken on the vast majority of those recommendations—and, of course, we have committed ourselves to working with stakeholders, which we are already doing.

Universal Credit

Debate between Lord Sharma and Chris Stephens

Tuesday 16th October 2018 Commons Chamber

[Alok Sharma]

As my hon. Friend knows, it is now possible for someone to get a 100% advance of their estimated first payment up front on the first day. Advances are interest-free and repayable over 12 months. As I said, I am not going to create policy at the Dispatch Box. Policy decisions will be put out in the appropriate manner as they are made.

[Chris Stephens (Glasgow South West) (SNP)]

What message does the Minister have for beleaguered DWP staff? A trade union briefing sent to MPs yesterday tells a sorry tale of staff having to deal with so many telephone calls that universal credit claims are not being maintained and payments are being delayed.

[Alok Sharma]

I wager that I have been to rather more jobcentres than the hon. Gentleman, and I invariably hear from jobcentre staff that things are working well. However, where we can improve, we do, and staff can feed back about improvements. That is what the “test and learn” process is all about.