Universal Credit

Stephen Timms Excerpts

Tuesday 16th October 2018 Commons Chamber

[Alok Sharma]

As I have just said, 85% of childcare costs can be recouped under universal credit, which is an improvement on the legacy system.

[Stephen Timms (East Ham) (Lab)]

I welcome the reports of imminent reform. Ministers can justify the five-week delay in universal credit only in cases where people have just left a monthly paid job. Yesterday, he told the House:

“The five-week wait has no savings implications for the Exchequer.”—[Official Report, 15 October 2018; Vol. 647, c. 395.]

Will he therefore now scrap it?

Oral Answers to Questions

Stephen Timms Excerpts

Monday 15th October 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Some 10,000 of my hon. Friend’s constituents are benefiting from automatic enrolment, with thanks to the 1,800 employers involved, and nationally workplace pension provision for women and young people has now doubled in the last five years.

[Stephen Timms (East Ham) (Lab)]

T8. Ministers defend the five-week wait for universal credit on the basis that employees will have had a month’s pay in their bank account when they left their previous job. Does the Minister accept that that case simply does not apply to employees paid weekly or those on zero-hours contracts?

[Alok Sharma]

I have huge respect for the right hon. Gentleman, as he knows, but that is precisely why we introduced this £1.5 billion of support earlier this year, which means people can get advances up front—up to 100%—and those on housing benefit get a two-week run-on, which is money that does not have to be repaid.

The Secretary of State’s Handling of Universal Credit

Stephen Timms Excerpts

Wednesday 11th July 2018 Commons Chamber

[Margaret Greenwood]

My hon. Friend makes an interesting point about cuts.

The Secretary of State’s second claim was that the report did not take into account the impact of recent changes made by the Government. This is curious.

[Stephen Timms (East Ham) (Lab)]

I agree with everything that my hon. Friend is saying. She has already quoted the National Audit Office report. From that quotation, does it not sound to her as though the NAO’s view is that this project should be paused and fixed?

[Margaret Greenwood]

My right hon. Friend is absolutely right. I am going to make some progress now because there have been so many interventions, although I am pleased that so many people are here today.

The head of the NAO said clearly in his letter of 4 July:

“Our report was fully agreed with senior officials in your Department. It is based on the most accurate and up-to-date information from your department. Your department confirmed this to me in writing on…6 June and we then reached final agreement on the report on…8 June.”

The Secretary of State refused to back down and said again in a letter to the Chair of the Public Accounts Committee—my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier)—dated only yesterday that, although she had full confidence in the NAO and its head,

“that does not mean the Department will always agree with all of the judgements reached by the NAO.”

Will she tell us now, once and for all, whether or not her Department agreed the report with the NAO in writing on 8 June?

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

Universal credit was a good idea, but the problems we are seeing in our constituencies are very significant. The Trussell Trust told us in its briefing for this debate that when universal credit is fully rolled out in an area, demand for food banks in that area goes up by 52% in the following year compared with 13% in areas where universal credit has not been fully rolled out. I noticed that the National Audit Office looked specifically at what the Trussell Trust said about demand for food banks where universal credit has been fully rolled out. The NAO states that its analysis

“aligns with the Trussell Trust’s.”

Indeed, the Department’s own analysis—the survey that the Secretary of State referred to, which was published last month—makes the point, as the hon. Member for Airdrie and Shotts (Neil Gray) has told the House already, that four out of 10 claimants in both the survey’s waves that were looked at were experiencing difficulties keeping up with bills. That is a much higher proportion of people facing hardship than has been the case with the previous system.

Why is universal credit causing much greater hardship than the previous system? Above all, it is for the very straightforward reason that people have to wait for five weeks before they are entitled to anything other than a loan once they have applied. A lot of people—I think we can all understand why—struggle to survive during those weeks. The theory was this: someone who has just left their job has a month’s salary in the bank that will see them through for a month; and after the usual waiting days, their money will start to come in. But a very large number of people do not have a month’s salary in the bank. There are a lot of good reasons why that is the case, but the most obvious is that people are often paid weekly. A very large number of people are paid weekly, but Ministers—I asked the former Secretary of State about this some years ago—have never had an answer to how those people are supposed to survive. I am grateful that the Secretary of State has told the House that she is listening and that she wants to work cross-party to fix these problems, and I very much welcome the fact that last October the delay was reduced from six weeks to five, but a gap of five weeks is asking too much of people who very often have virtually nothing in the bank when they make their claim.

[Ruth George]

Ministers have been saying that the advance payments solve the problem of the long wait, but the evidence we are getting from the Trussell Trust, among others, is that the high rates of repayment of those advances mean that they do not solve anything, but just prolong the debt that people are in.

[Stephen Timms]

My hon. Friend is absolutely right. If people are forced to depend on an advance right at the beginning of their claim, they are by definition plunged into debt right at the start. I am pleased that the Secretary of State has I think told us today, in response to my right hon. Friend the Member for Birkenhead (Frank Field), that she will look at the repayment periods and, hopefully, offer a less demanding repayment schedule than is the case at the moment. However, just plunging people into debt at the beginning of a claim is a very serious problem.

The Trussell Trust, which I have referred to, said that we should pause the roll-out of universal credit to fix the problems. My hon. Friend the Member for Wirral West (Margaret Greenwood) made that plea from the Opposition Front Bench, as she has done repeatedly and rightly. The Secretary of State can perhaps discount those representations, but she should weigh carefully what the National Audit Office said, to which attention has already been drawn today. Its report said that the Government should

“ensure the programme does not expand before business-as-usual operations can cope with higher claimant volumes.”

I very much hope that the Secretary of State and her fellow Ministers will weigh that cautionary note very carefully indeed.

Universal Credit

Stephen Timms Excerpts

Thursday 5th July 2018 Commons Chamber

[Ms McVey]

I did not know my hon. Friend also spent his formative years in Liverpool. There are so many Conservative Members who spent their formative years and grew up in Liverpool. [Interruption.] I smile because there are so many of us even in this Department.

My hon. Friend is quite right. This is what we are about: getting more people into work, which we have done—and significantly so. Now we are reaching out to help even more people, significantly so.

[Stephen Timms (East Ham) (Lab)]

For eight years Parliament’s only reliable information about the status of universal credit has come from the National Audit Office. Ministers have consistently responded with denials and cover-up statements that, as the Secretary of State has acknowledged this week, were simply untrue. Might her apology herald a new openness about the very real problems with the universal credit project?

[Ms McVey]

I thank the right hon. Gentleman for mentioning my openness and the fact that I was willing, by myself, to come and apologise for using the wrong words. People who know me will always say about me that I am open, that I am straight and that I say it as it is, which I will do. Equally, if we need to make more changes, which I have done from the moment I got here—I did not seek leave to appeal to the Court of Appeal because I did not feel it would have been right; and I looked at the position of kinship carers and did not think it was right, so we changed it, as we did for the 18-to-21 group—I am more than happy to change things when we can, if we can.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 2nd July 2018 Commons Chamber

[Ms McVey]

I was delighted to visit my hon. Friend’s constituency and local jobcentre and to visit the Greenhouse Café, which he champions and which helps vulnerable people to get closer to the workplace. On the question that he and the work coaches raised about the advance, those advances could be given up to 100%, and with the personal relationship that the work coaches have, through this training they can assess what the right needs are. That is the right thing to do.

[Stephen Timms (East Ham) (Lab)]

One of the concerns raised by the National Audit Office is that the Department does not really know who the vulnerable claimants are, and particular problems are being caused by the very long delay before people are entitled to their benefit. The right hon. Lady’s predecessor took an important step by reducing the minimum wait from six weeks to five. Will she commit to taking that further and reducing the period further still?

[Ms McVey]

Universal credit is all about the relationship with the work coach. They get to know their claimants and their claimants’ needs, so it is very much a tailor-made benefit. We as Ministers have always said that, should we need to adapt and change universal credit so that it best supports the individual, we will do just that. I am glad that the right hon. Gentleman welcomed the changes that we have already made.

--- Later in debate ---

[Alok Sharma]

May I commend my hon. Friend on all the work she does in her constituency? Youth unemployment is at a record low—it is 40% lower than it was under the last Labour Government—and programmes such as the youth support programme are available to help individuals. We value young people. It is about time that Labour did the same.

[Stephen Timms (East Ham) (Lab)]

A Minister suggested earlier that the policies of the Labour Government had not reduced poverty. Are Ministers not aware that child poverty was reduced by 800,000 over 13 years thanks to the policy of the Labour Government? Are they also aware that it is now rocketing?

[Alok Sharma]

As the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for North West Hampshire (Kit Malthouse), made clear, since 2010 there are 300,000 fewer children living in absolute poverty. As we have heard, the route out of poverty is work. We have record levels of employment, and that is something we should all welcome across the House.

Universal Credit and Welfare Changes

Stephen Timms Excerpts

Thursday 21st June 2018 Commons Chamber

[Ms McVey]

It was lovely listening to my hon. Friend—my learned friend, who knows so much about technology—because those words needed to be heard. As I said, this is at the leading edge of technology. Great Britain is leading the way. Countries that are coming to see us range from Sweden to the United States, Italy, New Zealand, Spain, Canada, Cyprus, France and Denmark. They all want to know how it works to take it back home to their countries.

[Stephen Timms (East Ham) (Lab)]

When the former Secretary of State was assuring the House that universal credit implementation was going well, it was the National Audit Office that told us what was really happening. Its reports have never been shoddy and have never been scaremongering. They have embarrassed Ministers—that is true—but they have proved to be truthful. The Secretary of State will recognise many of the findings of this latest NAO report in warnings given by Opposition Members when she was in the Department four or five years ago. The central flaw, of course, is the very long wait that people have before they are entitled to receive cash. Her predecessor, who was in the job for only a short time, managed, greatly to his credit, to reduce the waiting time from six weeks to five. Will the Secretary of State commit to build on that progress and reduce the waiting time significantly further?

[Ms McVey]

I have heard the warnings from the Opposition before. I heard the warnings even about work experience and sector-based work academies—“Oh, we couldn’t do that for our young people.” We did, and youth unemployment dropped by over 43%. I have heard the warnings, and I appreciate that the Opposition do not like the way we do things, but the way we do things provides results—hence 1,000 more people in work every day since 2010.

I do agree with the right hon. Gentleman that my predecessor made significant changes in how we were rolling out this system. We have to make sure that waiting times are reduced as much as possible, but two thirds of those longer waiting times are due to a lack of verification. We need the verification to know whether people are legally entitled to benefit.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 21st May 2018 Commons Chamber

[Ms McVey]

People are moving on to universal credit now with a smoother transition. When on universal credit, they are getting into work quicker, staying in work longer and looking for more opportunities in work. They are also getting more personalised support through the claimant commitment, which is helping them whether they are in debt or need IT support. This is about developing universal credit to respond to people’s needs.

[Stephen Timms (East Ham) (Lab)]

The modest changes in the Budget were welcome, but I wonder whether the Secretary of State has seen the recent research showing that food bank demand is growing much faster in areas where universal credit has been fully rolled out than it is elsewhere. Does she have substantial proposals to solve the very serious problems with this new benefit?

[Ms McVey]

They were not modest changes; they were quite significant changes, made after listening to what people said on the ground and meeting various action groups on the ground to see what was needed. We listened and we changed, and that is why we have done a very slow roll-out. I meet some of the poverty action groups across the country on a weekly basis to ask what else can be done. All have welcomed the changes we have put in place and the record number of people we have now got into employment, but of course where we need to give debt support or advances, we will continue to do so.

Universal Credit

Stephen Timms Excerpts

Tuesday 13th March 2018 Commons Chamber

[Ms McVey]

Unfortunately—I think that I was taught this as a child—when someone has totally lost the argument, they make up the facts, and that is what we are hearing from the Opposition. Although we have brought in all the requests that they wanted to support more people into work—I have just read out the list—they just scaremonger and make things up as they go along. I hope that it is clear to the whole House that these regulations will bring in real and tangible benefits for claimants and that, as promised, we are making the changes necessary to continue to deliver universal credit safely and securely, with all the necessary support that claimants need.

I want to be clear about another thing, too, because Members have stood up during past universal credit debates to recount stories of cases where their constituents have reported difficulties with universal credit. Where that has happened, we have immediately sought to address the concerns, because it is vital to us all that we get this right, so that we can deliver the most modern, forward-thinking, flexible benefit in the world, and that is what this Government are seeking to deliver. This benefit will be at the cutting edge of support throughout the world—that is what this Government are delivering.

[Stephen Timms (East Ham) (Lab)]

On problems with universal credit, the Secretary of State will, I think, recognise that the last thing that families earning a bit less than £7,400 a year will want is a pay rise, because if they get it, they will immediately lose their free school meals and be much worse off as a result. That is a very serious problem for work incentives, which used to be a big priority for her Department. Does she recognise that major problem?

[Ms McVey]

The right hon. Gentleman raises a fair point that I would like to address. By contrast, the other points that we have heard so far have been fabrication. He mentioned people earning £7,400. Actually, with universal credit, we are talking about people who will be bringing home somewhere between £18,000 to £24,000. He is quite right—[Interruption.] If Members will kindly let me finish this answer to the very pertinent question asked by the right hon. Gentleman, as this is now a personalised benefit where people will have their own work coaches, we will not seek to put someone in a less advantageous situation. Therefore, if people look at the money that is coming in and the extra support that is coming from school meals, they can see that we will not seek to do that to an individual. A work coach will be working with individuals to help them to progress in work, so that they are in a better situation.

--- Later in debate ---

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

These regulations will affect millions of families up and down the country, so it is only right that we are able to discuss them today. The Government consulted from November to January on introducing an earnings threshold that would restrict free school meals to families with net earnings under £7,400 per annum. The consultation received 8,981 responses. However, the Government excluded 8,421 of those responses from their analysis, meaning that fewer than 4% of respondents agreed with the Government. Surely that goes against every rule of public consultations. Talk about statistics being used against vulnerable people!

In 2010, the then Secretary of State for Work and Pensions promised in the White Paper on universal credit that it would

“ensure that work always pays and is seen to pay. Universal Credit will mean that people will be consistently and transparently better off for each hour they work and every pound they earn.”

[Stephen Timms (East Ham) (Lab)]

I am glad that my hon. Friend has picked out that point. She will have heard the Secretary of State saying that jobcentres would advise people not to take extra work or to get a pay rise because they would end up worse off. Is that not absolutely contrary to the whole principle of universal credit that she has just read out?

[Mrs Hodgson]

Yes, absolutely. We know that the Government are today reneging on the former Secretary of State’s commitment.

Free school meals are worth far more to a family than £400 a year per child. That might not seem to be a lot to some hon. Members, but to those families it is an absolute lifeline. By introducing a £7,400 threshold for eligibility, the Government are forcibly creating a cliff edge that will be detrimental to families, especially children. To give just one example, someone with three children in their family who earns just below the £7,400 threshold is set to lose out on £1,200-worth of free school meals if they work only a few extra hours or get a pay rise. The Opposition’s proposal would simply remove the huge cliff edge and the work disincentive for families who most need support. It would take away the barrier to working extra hours or seeking promotion. Our proposals would therefore make work pay. The Government’s proposal is in fact the new 16 hours, which they said was a disincentive.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

I want to focus on a single point. The proposals for eligibility for free school meals are catastrophic for work incentives in the welfare system. The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith)—I am sad to see that he is not in his place—used to tell us that the central point of welfare reform was to improve work incentives, but these proposals rob universal credit of its most attractive feature.

The Secretary of State for Education used to be in charge of universal credit, but this is not so much a criticism of him as a criticism of his predecessors. Ministers in the Department for Education have had seven years to solve the problem—admittedly, it is difficult and technical—of how to define eligibility for free school meals against the backdrop of universal credit. Instead of solving the problem, they have simply adopted a very lazy solution. In doing so, they are creating a very big problem for work incentives in the welfare system. One day, future Ministers will have to resolve that problem. It is disappointing that under the leadership of the Secretary of State, who understands universal credit as well as anybody, they have gone down this very lazy line.

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) has just quoted from the universal credit White Paper, which sets out the philosophy that underpins the new benefit. I will quote another bit from chapter 2, which makes clear the principle that

“increased effort will always result in increased reward.”

That is what UC is supposed to be about, but under these proposals that will not the case. As we have heard, the Secretary of State for Work and Pensions told us that, when someone is just below the threshold, the jobcentre will advise them not to put in any more effort, not to get a pay rise and not to put in more hours. The jobcentre will recognise that, if they were to do that, they would end up worse off.

[Mrs Hodgson]

Does my right hon. Friend agree that this just reintroduces in a different guise the much maligned 16-hour threshold, which the Government said this was all to do away with?

[Stephen Timms]

My hon. Friend is absolutely right about that. The whole idea about UC was that it was supposed to get rid of cliff edges and benefit traps, but instead it is introducing a benefit trap far bigger and far worse than anything in the old benefit system. This is completely scuppering the whole purpose of UC. If it is true, as the Secretary of State told us, that jobcentre coaches are going to say to people, “No, don’t take on extra work. Don’t get a pay rise. Don’t go for more hours because if you do, you will end up worse off,” how are people supposed to progress? Surely all of us would recognise that the point about this system is to encourage progression, not to have bureaucrats telling people, “Oh no, don’t progress because if you do, you’ll end up worse off.” This is a catastrophic holing of the whole purpose of UC, and it is not as though only a few people will be affected.

The prospectus was that UC would solve all these cliff edges and benefit traps, but instead it is creating one that is much bigger. It has been calculated—I am indebted to the Children’s Society for this calculation—that more than 1 million people will be caught in the trap if these proposals go ahead. I will explain to the Education Secretary exactly why that is; he can read this in briefing the Children’s Society has provided. Some 280,000 families are affected, containing between them more than 700,000 children. Among those are 125,000 families earning below the threshold who risk being worse off if they take on extra work or get a pay rise, as the Work and Pensions Secretary recognised. In addition, there are 150,000 families earning above the threshold who would be better off if they reduced their earnings to below the threshold, so that they would then qualify for free school meals. What sort of system is that? Everybody will recognise that we do not want a welfare system that puts people in that position, but that is the system we will end up with if this statutory instrument goes through. The Children’s Society calculates that almost 21,000 families—containing more than 80,000 children aged eight to 15—who earn more than £7,400 would be better off if they cut their earnings to below the threshold to qualify for school meals. This is a catastrophic arrangement.

Child Poverty: London

Stephen Timms Excerpts

Thursday 22nd February 2018 Westminster Hall

[Siobhain McDonagh]

I absolutely agree with my hon. Friend. I know how much work she does on housing, but many Members present, in particular on the Labour Benches, spend most of their advice surgeries talking to families threatened with homelessness—people who live in the private sector and simply cannot afford the rents.

I want Members to hear children’s stories rather than just statistics, because ultimately we are talking about human beings rather than percentages, so I will read an extract from a heartbreaking letter I received from Mrs Sheridan, headteacher at Malmesbury Primary School in my constituency, outlining her experience of child poverty:

“A child had lost his reading book. We encouraged him to have a good look at home, including asking him to look under his bed. He replied ‘I haven’t got a bed to look under’…We see children who eat their lunch very quickly, whilst ‘protecting’ their plate with an arm as they eat…We see children who take extra bread and pasta from the salad bar daily to fill themselves up…We see children attending school in a uniform that is clearly outgrown…We had a family of five, the father who was in work, who lived in a van in a car park for a number of weeks…Parents have asked to use the school phone as they have lengthy delays in payment of Universal Credit, and have no money for phone credit to chase up their claim…We believe that we have a significant number of children who are so used to feeling hungry and cold that they do not recognise these feelings anymore.”

What message does the Minister have for Mrs Sheridan and, indeed, for those children, who are experiencing such deplorable examples of child poverty on a daily basis?

[Stephen Timms (East Ham) (Lab)]

I am grateful to my hon. Friend for raising this subject and for the case that she is making. She has mentioned universal credit. Does she agree with me that the roll-out of universal credit to a number of the constituencies that she listed earlier will make some of those families’ problems significantly worse over the next few months?

[Siobhain McDonagh]

I thank my right hon. Friend for his intervention and for all his work on poverty and helping poor families in London, in particular in his constituency. I completely agree that the delay in universal credit, the difficulties in claiming and the lack of face-to-face contact to be able to resolve some of the problems will have dire impacts on people.

Those examples I gave from Mrs Sheridan’s letter are just some of the examples of child poverty from just one school in just one constituency in our capital, across which four in 10 children now live in poverty—an astonishing figure that is expected to rise. London, however, is a divided city and significant affluence and poverty exist side by side, sometimes on the same street.

Take the London Borough of Merton, where my constituency neighbours the more wealthy constituency of Wimbledon. When we compare child poverty in our borough, it proves to be a sombre metaphor for the story of rich and poor across our capital. There are almost triple the number of children in poverty in my constituency than in Wimbledon and, to be clear, that is not because my constituents are less deserving or work less hard. At local ward level, Cricket Green ward in Mitcham and Morden has a staggering 38% of children in poverty, while less than a five-minute drive away, in the same borough, Wimbledon’s Hillside ward has only 5.5% of children in poverty. Furthermore, Mrs Sheridan, the Malmesbury headteacher, noted a distressing observation she had made: children from her school are significantly smaller physically than their peers in Wimbledon schools.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 5th February 2018 Commons Chamber

[Alok Sharma]

I want to be absolutely clear: the changes that we are making in universal credit and in the benefit system are there to focus on protecting the most vulnerable. That is the underlying policy of universal credit and we will continue to do that.

[Stephen Timms (East Ham) (Lab)]

Has the Minister had any discussions with colleagues in the Department for Education about their proposals for the eligibility of universal credit claimants to free school meals? If the current proposal were to go ahead, it would introduce a huge new benefit trap into the system, far worse than anything in the old system. Universal credit was supposed to remove such traps, not create new ones.

[Alok Sharma]

Currently, 1.1 million young people—students—receive free school meals. If the policy that has been put forward as part of the consultation goes ahead—where there is an earnings threshold of £7,400—an additional 50,000 young people will benefit from free school meals.