Universal Credit Roll-out
Kate Green Excerpts(7 years, 2 months ago)
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Debbie Abrahams
No. I am sorry, but I am not going to take any more interventions.
Other design problems I mentioned last week include: the fact that payment is made to one member of the household—predominantly men—and that the second earners, who are predominantly women, face much reduced work incentives; the fact that severe disability premium payments were not incorporated into universal credit; the fact that rent is paid to the claimant rather than the landlord; the fact that self-employed people are subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; and the fact that in-work conditionality is coming down the track, meaning that 1 million working people will have to visit jobcentres while much of the Jobcentre Plus estate is being closed, and will face financial sanctions if they fail to work the hours their job coach deems they must work. On top of that, there are the real-time information flaws, which have been mentioned by my right hon. Friend the Member for East Ham (Stephen Timms), and the fact that there is no time limit on disputes, which will lead to more delays in payments. There is also, of course, the fact that the child element of universal credit has been reduced from 20 to 19 years.
I turn to the cuts made to the programme since its introduction. Universal credit was meant to simplify the system, but it was also meant to make work pay. We have always supported those principles, and we still do, but unfortunately the 2015 summer Budget slashed the work allowances, and the rate at which support is withdrawn was dramatically increased. As the Institute for Fiscal Studies said in its response to the Budget, that meant the promise that work would always pay was lost. The cuts reduced the work allowances from £222 a month to £192 a month for a couple with two children claiming housing costs. It is estimated that that will result in an additional 340,000 people in poverty by 2020. Some families have been left as much as £2,600 a year worse off.
Families with three children face even greater difficulty, as the Government have decided that the state should play no role in supporting the life chances of the third child. A whole generation of children will be born without the support that was offered to their siblings, which is a break from the historical principle that the state should not punish children for the circumstances of their parents. Single parents have been hit particularly badly. In real terms, a single parent with two children who is working full time as a teacher will be £3,700 a year worse off.
That is even before we reach the Government’s freeze on social security rates, which the Joseph Rowntree Foundation predicts will push 500,000 more people over the poverty line. Its analysis shows that the freeze will mean that a family of four receiving universal credit will be over £800 a year worse off in 2020, and that is on top of the other cuts I have outlined. Will the Minister confirm that the Government will continue the freeze on social security payments, including universal credit, given that it was introduced when inflation was 0.3% but the rate is now 3%?
As I revealed last week, the Child Poverty Action Group’s forthcoming report estimates that these cuts will push 1 million more children into poverty, 300,000 of whom are under five. What does it say about this Government when their policies knowingly push children into poverty? The Secretary of State, the Minister for Employment and many other Conservative Members have tried to suggest that data apparently showing a 3% increase in employment outcomes under universal credit compared with the situation under the previous system is evidence that universal credit works to get people into work. However, they fail to add that the data is from 2015—before the cuts were implemented. Will the Minister now commit to updating the figures, and will he retract these particular statistics, which he has used numerous times?
It is worth pointing out that the most recent figures show an underspend—I repeat, an underspend—on tax credits of as much as 2.4% compared with the projections of the Office for Budget Responsibility. Will the Government provide an exact figure for the savings that that has created? Could not some of the underspend be put towards sorting out the problems that we are now encountering under the new programme? I will return to that point in a minute.
Debbie Abrahams
I am very sorry, but I will not give way now.
I turn to the implementation failures. Leaving aside the many changes to the programme’s schedule over the past few years, the most recent roll-out has been beset by problems. I was glad that the Government listened to Labour and will replace the high-cost phone line with a free one. Will the Minister give me a timetable of when that will happen? Will he also assure me that the free phone line will be funded not by the taxpayer but by Serco, the contractor?
Other implementation issues still remain, however, including the fact that people are denied prescriptions and dental treatment because pharmacies and dental practices do not know who is eligible for free treatment. People also do not know about advance payments or alternative payment arrangements.
I have been inundated with emails and calls from people telling me their UC horror stories. For example, a self-employed Oldham woman is worried that she will lose her business and home when she goes on to universal credit. I have received so many stories from self-employed people that you would not believe it, Mr Speaker. They are really concerned about what universal credit will mean for them. A private landlord is worried that three of his tenants are thousands of pounds in rent arrears under universal credit, although they had never previously been in rent arrears. Southwark Council estimates that such arrears will be an average of £1,700 per universal credit tenant. Disabled people are isolated and alone as the support of severe disability premiums disappears, along with other disability support. As I have mentioned, food banks are running out of food. Even current and former DWP advisers are expressing their deep concerns about the programme and the fate of claimants.
I come back to my asks. First, the Government must end the six-week wait. They should bring it forward by at least one week, but if it is to be brought forward by two weeks, as has been widely reported, that will make a huge difference to people. Secondly, they must ensure that alternative payment arrangements are offered to all claimants at the time of their claim. To suggest that this already happens is more than a little disingenuous. The DWP guidance is vague to say the least. The alternative payment arrangement options include fortnightly payments, split payments and payments directly to the landlord.
Damian Hinds
I want to press on, because I do not want to take up too much time.
From last week’s debate, as well as the general commentary received and heard, I have taken away for action a number of points that were raised. There were some individual cases, and also policy and process matters, including how we can improve arrangements for direct rent payments, our approach in cases of domestic abuse and the process for housing benefit debt recovery. Some informational issues also came up. In response to my hon. Friend the Member for Gloucester (Richard Graham), I committed to publishing the roll-out schedule for the landlord portal and trusted partner status. A question was asked by the hon. Member for Newport East (Jessica Morden) about staffing levels. In fact, we are increasing, not decreasing our staffing levels to complement the roll-out of universal credit. The hon. Member for Oxford East (Anneliese Dodds) asked about the process for third-party representatives acting for clients. I recognise that we can do more in providing clear information on such matters and I commit to doing so. As well as reporting to the whole House, we are making sure that additional information is provided to Members as the full service comes to their constituency, and we are running a number of sessions in the House for both Members and caseworkers.
Damian Hinds
I am grateful to the hon. Lady for that intervention. Of course, we monitor those things constantly. As I was saying earlier, this is one reason why we have pre-scheduled pauses in the sequence.
Yes, this is a fundamental reform. This is a lot of change. It is a new benefit, a new IT system and a new operational system involving new ways of working with partners. Yes, that does bring with it some challenges, but its implementation is happening at a very measured pace, stretching over nine years from 2013 to 2022. In the next four months, universal credit will move from covering 8% of the benefit recipient population to 10%. This careful, gradual approach means we can continually adjust and evolve the programme. We can see that in enhancements such as the landlord portal and trusted partners, the refreshed approach to advances and many, many other back-of-house and systems changes. We see this effect coming through in the huge improvements in timeliness and first-time accuracy.
Damian Hinds
I apologise to both hon. Ladies who have stood up, but I want to bring my remarks to a conclusion. I know that many Members, on both sides of the House, probably including them—
Damian Hinds
Not including the hon. Lady, but many Members, perhaps including the hon. Member for Wallasey (Ms Eagle), will wish to contribute to the debate.
In every phase and in every respect, the development of universal credit has been all about enhancing the way it helps people to get into work and get on in work. Already, universal credit is transforming lives and we want more families to benefit from the satisfaction, the self-esteem and the financial security that comes from progressing to a job, to a better job and to a career.
Kate Green
Does the hon. Gentleman agree that if the Government are making choices, it would be sensible for them to choose to prioritise the incomes of low-income families, instead of prioritising the interests of higher earners by cutting taxes and raising the tax threshold? Does he agree that there is scope for improving work allowances in universal credit and helping those who earn the least?
Neil Gray
I absolutely agree with the hon. Lady, and I will come to that shortly.
The Government should review the cuts to the work allowances, which are acting as a disincentive to work and making work pay less; review the cuts to housing benefit, which are driving up rent arrears, as I am sure will be touched on in tomorrow’s debate; and review the cuts to employment support, which are denying help to those who need it most, and they should fully review and then scrap the disgusting sanctioning policy, which could have cost the life of my constituent, Mr Moran, and has cost the lives of others. That was the subject of an excellent paper by Sharon Wright of Glasgow University and Peter Dwyer of the University of York in The Journal of Poverty and Social Justice.
The Government are hiding behind the illusion that universal credit helps people into work and makes work pay. They actually believe that universal credit is working on this basis. The Secretary of State’s own figures show that in the 2% of jobcentres where universal credit has been rolled out, there has been a mere 3% uplift in employment rates.
Andrew Bowie
I will not give way.
I am proud to be a Conservative Member of Parliament and I am proud to sit on these Benches with colleagues who work just as hard, and care just as much, for the people they represent as any other Member of this House. Let us be clear that no party in this place has a monopoly on compassion. Socialist, nationalist, Liberal, Conservative or Green—all of us in this place are here first and foremost to serve our constituents. To imply otherwise, and to indulge in wild and insulting generalisations, does not help our constituents, does not inform the debate, and does very little for how people perceive this place, and neither does the gratuitous scaremongering that we heard too much of in last week’s debate. To imply that simply because this Government are a Tory Government they do not care, and are not listening to and acting on the concerns of Members and public bodies, is unfair and untrue.
Last week the Secretary of State announced that all Department for Work and Pensions helplines would be free by the end of the year. A couple of weeks before that, he announced that a more proactive approach would be taken to making clear the availability of advance payments.
Michael Tomlinson
I will give way in a few moments.
I support universal credit, which simplifies what was an over-complex and bureaucratic system. Like my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), I am disappointed by some of the tone of the debate both today and last week. Today, we have heard accusations of knowingly pushing people into poverty; last week, we heard the comment that the Conservative party is undertaking “calculated cruelty.” When I raised that point, there were cries of “Oh, yes it is!” from the Opposition. What a ridiculous assertion. What utter nonsense.
A person does not have to be best friends with Opposition Members to know that, as my hon. Friend the Member for Eastleigh (Mims Davies) said, no party has a monopoly on compassion. No party has a monopoly on care or concern for the most vulnerable. I know many Conservative Members, just as there are in each and every political party, who were driven into politics by their concern for the most vulnerable in our society. Let us not have any more nonsense about calculated cruelty.
Where there is a difference is on policy. This debate is on the Government’s response to last week’s debate. What is their response, and what should it be? Mr Speaker, you rightly said in response to a point of order that
“this motion does matter; it is important; it was passed. As a matter of fact, however, it is not binding. That is the situation.”—[Official Report, 18 October 2017; Vol. 629, c. 959.]
So what should be the Government’s response? Let us consider the substance. Conservative Members want universal credit to succeed, but heaving heard the debate both today and last week, I fear there are Opposition Members who do not want it to succeed.
Kate Green
The hon. Gentleman and I have previously been Committee colleagues, and I have a lot of respect for the way he approaches such matters. When the Government first proposed universal credit in 2011, they said it would lift 900,000 people out of poverty, including 350,000 children. That laudable aim should be welcomed on both sides of the House. What is the Government’s ambition today for the number of people they expect to lift out of poverty?
Michael Tomlinson
I, too, enjoyed working with the hon. Lady in a cross-party spirit on the European Scrutiny Committee in the last Parliament, and I look forward to doing so again. I have been told—I hope the Minister is able to confirm this—that 250,000 additional people will be helped into work as a result of this policy.
Universal Credit Roll-out
Kate Green Excerpts(7 years, 2 months ago)
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Debbie Abrahams
I am sorry but I am not going to give way again, as I must try to press on.
Secondly, there were concerns that UC payments would be made monthly, in arrears, and paid only to the main earner of each household, so women, as second earners, are automatically discriminated against in this process; it was also quite a radical change, with rental payments going directly to the household and not the landlord. Thirdly, there were considerable doubts about the use of so-called real-time information, which was meant to ensure that information from employers to Her Majesty’s Revenue and Customs would allow the Department for Work and Pensions to calculate quickly what people in low-paid employment would be entitled to from UC. The reliability and validity of this data exchange was another key concern. I believe there is a DWP RTI issues group, so there are clearly still problems. Finally, the Government said that disabled people would not be financially worse off under UC, but because the severe disability premium payment has not been incorporated into UC, it is an effective loss of up to £62.45 a week for a single person—more than £3,200 a year.
All that was in 2012, but a number of other issues emerged in the following couple of years—universal jobmatch, ballooning costs and of course several delays. One of the most worrying issues revealed in the January 2015 UC regulations was that people in low-paid work on UC will now be subject to in-work conditionality. So, for example, someone who is one of 1 million or so people working on a low-paid, zero hours contract, with different hours from one week to the next, will have to demonstrate to their Jobcentre Plus adviser that they are trying to work 35 hours a week and if they fail to do that to that person’s satisfaction, they can and will be sanctioned. For Members who are unfamiliar with this concept, those people will have their social security payments stopped for a minimum of a month.
Fast forwarding to the 2015 summer Budget, the then Chancellor announced that cuts would be made to the so-called universal credit work allowances, which are how much someone can earn before UC support starts to be reduced. For example, a couple with two children claiming housing costs had their work allowances cut from £222 a month to £192 a month. In addition, approximately 900,000 families with more than two children could not receive support for third or subsequent children.
Debbie Abrahams
I am not going to give way again, as 90 people have put in to speak.
The UC equivalent of the family element in tax credits was also abolished. The Government’s equality analysis showed that women and people from black, Asian and minority ethnic communities will be most adversely affected by these work allowances cuts. Let us recall what the principles of UC were and then consider that the Institute for Fiscal Studies stated at the time that the cuts to work allowances meant the principle of making sure work always pays was lost. The Government’s claim that UC is leading to more people getting into work is misleading, as it is based on 2015 data, before the work allowance cuts came into effect.
The current Chancellor’s attempt to redress some of the damage of these cuts by reducing the UC taper rate in last year’s autumn statement has had a marginal effect. Members may recall that he reduced the rate from 65% to 63%, so that for every £1 earned over the work allowance, 63p of UC support is withdrawn. That is a far cry from the 55p rate envisaged when UC was first being developed. On that basis, the Resolution Foundation estimated that some families will lose £2,600 a year because of these cuts.
Mr Duncan Smith
No, because I am conscious that others want to speak, but I will come back to the hon. Gentleman in a minute.
I recall that my surgery was full of people who, under the tax credit changes, found they had no money at all. When Labour rolled out tax credits in a big bang, over 750,000 people ended up with no money at all. Since then, the thresholds have had to be raised dramatically to get money to those people.
Mr Duncan Smith
I will give way in one second.
The roll-out of universal credit has been deliberately designed—it is called “Test, learn and rectify”—so that, as it happens, we can identify where there are issues, rectify them and then carry on rolling it out. I want to give an example of why stopping the roll-out now will not work.
One area that we discovered early on is that landlords were simply unaware of who was on benefits. As a result of all that, arrears would be racked up, but they did not know they could get that stopped and have direct payments made. That will be changed in the next stage of the roll-out, because a portal between landlords and the service centre will allow them to establish that immediately. Unlike the local housing allowance, under which people ran up huge levels of debt, but reset slightly and carried on, universal credit allows them only a two-month period of debts before they go on to direct payments. That critical change will be one way of resolving the problem.
Jessica Morden (Newport East) (Lab)
I am keenly aware that the full service roll-out is due to start in the Newport part of my constituency on 15 November. As has been made clear by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), and also by a host of organisations including Citizens Advice, Community Housing Cymru—which represents housing associations in Wales—the Trussell Trust, the Child Poverty Action Group, and the staff of those organisations on the front line, universal credit is not working for far too many people.
Although we support the principle of simplifying benefits, the evidence so far suggests that the design problems in the system, compounded by operational problems, delays and errors, mean that too many people are experiencing real financial hardship. In Newport—and in Caldicot, which will have full service in March—the DWP is dealing with only the simplest of claims from single people without children and without complex needs.
The ramped-up roll-out will widen to include more claims, as yet untested in the system locally. We have already seen cases of people waiting up to eight weeks for payments, not being able to meet financial commitments, borrowing and incurring interest charges, and struggling to catch up while remaining in debt. In my constituency, a family with three young children moved on to universal credit because of a new relationship, but then had to be moved back on to legacy benefits and tax credit because the system was not yet geared up for such cases. That family were left for eight weeks without a single payment, and had to rely on food banks for help.
The Government may decide to stick their head in the sand and ignore these valid criticisms, but let me explain what that might mean in my constituency. As I said earlier, the roll-out in Newport is due to start on 15 November. Given the six-week waiting period, my constituents will be lucky to receive their payment on the day after Boxing Day if it is on time, and not until the new year if it is not. No payments before Christmas will mean real hardship, and any payment received will be used to survive and to pay for food and heating, which by then—after six weeks with no income—will be a greater priority than paying rent. In neighbouring Torfaen, with the full service roll-out, 27% of Bron Afon tenants who moved on to universal credit in July had to wait an average of nine and half weeks for payment, which led to debt and borrowing from high-interest lenders.
I know that the Government will talk about advances, but they are not an adequate response. They cover only part of the universal credit claim, and must be repaid through deductions. The point is that people are being put into debt immediately. If half the number of new claimants have to rely on advance payments, the system is clearly wrong, and, as was pointed out earlier by the hon. Member for Airdrie and Shotts (Neil Gray), that constitutes an admission that the system is failing.
Kate Green
Does my hon. Friend agree that the problem is compounded by the level of deductions of third-party debt that are allowed under universal credit—for example, council tax or utility bill debt? It is higher than the level allowed under legacy systems, which means that people are left with much less money.
Jessica Morden
I absolutely agree. The point is well made.
I know that housing associations are doing all they can to help tenants, and that there are heavy demands on their advice services, not least when they are helping those who cannot go online. However, as Gingerbread has pointed out, two thirds of single parents are renting privately. What is happening to those with private landlords? Are they able to negotiate longer repayment plans?
I, too support calls from organisations such as Community Housing Cymru which want a pause in the accelerated roll-out of the full service until the problems caused by delays have been addressed, improvements have been made in relation to, for instance, the six-week waiting period and the seven days without pay, and—this was mentioned by my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle)—the issue of landlord portals has been sorted out.
Let me finally say a word about our local DWP staff, who are dedicated and extremely hard-working, although I cannot say that I have spoken to many who feel enthused. They are on the front line of the delivery of the roll-out. Their numbers have been cut, and all kinds of changes are taking place in their service. They need to be properly resourced and supported, and the Government must make that a priority.
The movement on the call charges is welcome but overdue. We now need the Government to move further. We need them to understand the very real impact on people, not least in the run-up to Christmas. They must consider the practicalities, and pause the roll-out.
Oral Answers to Questions
Kate Green Excerpts(7 years, 3 months ago)
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Guy Opperman
My hon. Friend is correct. The new state pension is much more generous for the many women who were historically worse off under the old system. More than 3 million women stand to gain an average of £550 extra per year by 2030 as a result of these changes.
Kate Green (Stretford and Urmston) (Lab)
The Minister for Disabled People, Health and Work (Penny Mordaunt)
The employment rate among disabled people has increased to 49%, and the Government are committed to getting 1 million more disabled people into work over the next 10 years.
Kate Green
In 2015, the Minister said the Government’s aim was to halve the disability employment gap by 2020, and in 2016 the Social Market Foundation said that that meant an extra 1.2 million disabled people in employment, but now the Minister tells us that the ambition is for an extra 1 million disabled people in work within 10 years. Why are Ministers becoming less ambitious for disability employment?
Penny Mordaunt
When Labour was in office, it did very well in closing the disability employment gap—by raising the unemployment level among the general population. We will take a different approach. As I have said in this place before, we will look in great detail at the local numbers—for example, the numbers of people with a learning disability coming out of education; that is what we need to get people focused on.
State Pension Age for Women
Kate Green Excerpts(7 years, 6 months ago)
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Mary Glindon (North Tyneside) (Lab)
It is an honour to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this debate.
Five thousand women in North Tyneside are affected by the changes to the state pension age and many of them have contacted me about the acceleration of their state pension age. Women in this age group went straight into work after leaving school, so by the time they reach their state pension age they have already worked more than the 35 years expected for a full state pension. They have at least 39 to 44 qualifying years and have paid more than their fair share of contributions, but are losing at least three to four years of pension entitlement.
Kate Green (Stretford and Urmston) (Lab)
Does my hon. Friend agree that those women who did not contract out of the state scheme but remained in it are disadvantaged against those who did contract out, in that a pension can often be drawn early if it is a private pension that someone contracted out to, but a state pension cannot be drawn out early?
Mary Glindon
Quite right—I have nothing to add to that.
My point is that the Treasury is making quite a saving. One of my constituents, who worked until she was in her late 50s and gave up her job to look after her father—who had dementia—thought she could manage because she thought that she would get her pension at 60, but she found she was unable to claim her pension. She then had poor health herself and was forced to claim employment and support allowance with the support of her GP. That claim was denied and, despite ill health, she now has to work two cleaning jobs to support herself—that is a disgrace.
I feel both sorry for and angry on behalf of the 5,000 women in North Tyneside and the other millions of women who have been cheated of their pension entitlement by the coalition Government and this Tory Government. I hope that the Minister will disagree with his predecessor, who claimed that going further than the Government have already gone could not be justified.
Our welfare state began on 5 July 1948. On 5 July 2017, I say to the Minister that a commitment by him to further transitional arrangements for those women would be a fitting birthday tribute to that great institution.