Universal Credit: Rent Arrears

Lord Kirkwood of Kirkhope Excerpts

Wednesday 13th July 2016 Lords Chamber

[Lord Freud]

What we are aiming to do with universal credit—and there is evidence of success in this—is to get people to take control of their own lives. It is much more difficult for people to switch to going into work if their rental situation is locked up in a dependency situation. We are aiming to free people from that so that they can move into work. There are good signs that we are being successful in getting people into work.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, the Minister’s announcement that he is undertaking a review is very welcome, but will he include the evidence that the noble Lord, Lord McKenzie, has just put forward about the increasing incidence of rent arrears? We need to make sure that this is merely a short-term spike and not a long-term trend. In the course of his researches, will he look into why the safety net measures built into the design of universal credit, to which he referred, appear to be failing in this instance? This is important. By a country mile, this is the biggest change programme that Her Majesty’s Government are bringing forward. It is mission-critical for the United Kingdom, particularly after Brexit, and it is important that we get it right.

[Lord Freud]

I absolutely accept that we need to get it right. I am spending quite a lot of time with the ALMOs. I have had a couple of meetings with Eamon McGoldrick and John Bibby to discuss their findings. It is complicated. The essential fact is that landlords like their money paid in advance and all benefits systems pay in arrears, so we do not know how much of this is what the ALMOs call book arrears and how much is real arrears. We need to get to the bottom of that and we need to get to the bottom of what are the processing and payment systems issues. We need to understand what the existing arrears are. They are much higher than we expected—50%—and that is a frightening fact. We may be looking at a group going into UC which is unusual because it is moving up and down, and we need to understand and quantify those factors.