Universal Credit Roll-out

Alex Burghart Excerpts

Wednesday 18th October 2017 Commons Chamber

[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that he reduced the rate from 65% to 63%, so that for every £1 earned over the work allowance, 63p of UC support is withdrawn.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.

[Alex Burghart (Brentwood and Ongar) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry but I am not going to give way again, as I need to make progress, with 90 people having put in to speak.

This summer, the Library analysis that I commissioned showed the real-terms impacts on different family structures and for different income groups. It found that a single parent with two children working as a full-time teacher will be about £3,700 a year worse off in 2018-19 compared with 2011-12.

So where are we are up to now? The most recent statistics show that there are currently about 600,000 people claiming UC, over a third of whom are receiving support via the full service. The roll-out of UC over the next six months will see the overall case load rise to just under 1 million, which is a 63% increase. On average, 63,000 people a month may start a new UC claim before January 2018, and by 2022 we expect about 7 million people to be seeking support from the programme. We are at a turning point in the Government’s flagship programme, the roll-out of which is currently being ramped up dramatically.

On top of the design flaws and cuts that I have just mentioned, several other issues have emerged. Perhaps the most pressing is the Government’s decision to make new claimants wait six weeks before they receive any support. Four weeks of that is to allow universal credit to be backdated, plus there is an additional week, as policy, and then a further week waiting for payment to arrive. This “long hello”, as some have called it, is believed to be one of the primary drivers of the rising debt and arrears we are now seeing. Citizens Advice reports that 79% of indebted claimants

“have priority debts such a rent or council tax, putting them at greater risk of eviction, visits from bailiffs, being cut off from energy supplies and even prison”.

--- Later in debate ---

[Neil Gray]

At the start of the year, Mr James Moran from Harthill in my constituency qualified as an HGV driver and managed to find work on a zero-hours contract as a driver while also receiving universal credit—exactly the sort of scenario under which universal credit was supposed to work better. Not long after gaining employment, however, Mr Moran was sanctioned, despite being in employment. As he started the process of appealing the sanction, he suffered a stroke, which meant that he was no longer able to work as a driver. As the sanction was still in place, he returned home from hospital with no means of receiving an income. Despite getting some help from his elderly parents, Mr Moran struggled with no money whatever for more than a month. He then suffered a second stroke. Mr Moran has advised me that the doctors who treated him in hospital at the time of his second stroke admission told him that the low blood pressure that caused the second stroke was almost certainly caused by malnourishment. That malnourishment was a direct result of a DWP sanctioning error, forcing Mr Moran to live without an income—to live on fresh air.

I wrote to the Secretary of State about the case on 1 September and have repeatedly chased his office for a reply, but I have received nothing in return to date. The six-week minimum wait appears to be built into the Secretary of State’s correspondence turnaround as well. I do not take that personally, because I gather from press reports that the Chair of the Select Committee on Work and Pensions has had similar problems with getting the Secretary of State to put pen to paper. Perhaps he will now chase a reply.

The revelation last week that our constituents on universal credit had to pay 55p a minute was a further dent to the public’s confidence in this Government’s handling of universal credit. It should not really have been much of a revelation, as my hon. Friend the Member for Glasgow South West (Chris Stephens) has been raising the telephone tax issue for months—and what a win for my hon. Friend this morning, as, following his ten-minute rule Bill in February, the Government have finally announced that the phone line will be free. But why must we wait until the end of the year for all telephone charges to be scrapped? The Government should bring in that welcome concession now.

[Alex Burghart]

Did any SNP Members, when they raised this issue, ever point out that there was a call-back service?

[Neil Gray]

Yes, we did. The hon. Gentleman’s intervention completely misses the point. [Interruption.]

--- Later in debate ---

[Alex Burghart (Brentwood and Ongar) (Con)]

I am grateful for the opportunity to speak in this debate, Madam Deputy Speaker.

I have been following the progress of universal credit since its inception about 10 years ago. The shadow Secretary of State asked, at the start of her remarks, how did we get here? How did we get to a place where there is a new benefit system on the table whose principles are agreed by most in this House? Those principles have been agreed because they make sense and because the welfare system we inherited was a disaster. It has been a disaster since its birth in 2003: it cost £1.9 billion in errors, left hundreds of thousands of people with too little money and created a system that paid people not to take work. It left people worse off if they took on more work. We saw a taper rate that left only 4p in the pound when some people worked more than 16 hours a week. This was and is a benefit system that spends tens of billions of pounds to discourage people from working more hours. It is a disgrace and it needs to be replaced.

From those key mistakes, universal credit has learnt how to roll out a benefit and what sort of benefit to build. The sort of benefit to build is one that encourages people to move into work and to take on more work when they do; and one that has a taper rate that leaves people not with 4p in the pound, but 37p. It is a system that has learned from its predecessor. In particular, an important lesson has been learned about how to introduce a big new benefit. There is no big bang in the system. This is a “test and learn” process. As my right hon. Friend the Secretary of State said, we are moving from 8% roll-out to 10% roll-out at the start of next year, meaning that the system is evolving all the time. We are seeing its evolution before our eyes. We saw it today with the change to the phone lines. We have seen it with the advance payments system and the eligibility criteria for people to get their payments paid directly to landlords. Those are all improvements.

Hon. Members must understand, however, that we cannot have a “test and learn” environment if we are not testing. We have before us an opportunity to roll out a system slowly and get it right. Opposition Members want a pause. There has just been a pause in the summer—no new jobcentres were taken on in August and September—and there will be another pause in January. The pauses are built into the system already, and the system is using them as opportunities to develop. Labour introduced a benefit in 2003 that was a mess, and it introduced it badly, and now it is trying to make a mess of its successor.