Universal Credit Roll-out: Nottingham

Alex Norris Excerpts

Wednesday 14th November 2018 Westminster Hall

[Alex Norris (Nottingham North) (Lab/Co-op)]

I beg to move,

That this House has considered the effect of the roll-out of universal credit in Nottingham.

The latest stage of the universal credit roll-out in my city took place about a month ago, which is why I sought this debate. One of the vagaries of this place is that we cannot always get the debates that we want at the time we want them, so I am pleased to be able to raise the subject at this important early stage of the roll-out.

Some claimants in the city were already on universal credit, but many will remain on legacy benefits for a while longer, until managed migration. For the past month, however, all new claimants in our city have had to claim universal credit. So far, so simple, but having seen how the roll-out has gone elsewhere and its impact in communities that are very similar to mine, my constituents and I are anxious, fearing that this will be anything but simple. We are anxious that it will mean delays, reductions in benefits, debt, rent arrears, visits to food banks and more poverty. My colleagues in Nottingham—I am glad to be joined by three of them—and I do not accept that for our community. I believe that the roll-out should be stopped.

I will talk about experiences in similar parts of the country to ours, and specific concerns that I hope the Minister can address. It seems incredible that universal credit was first announced eight years ago. The rationale was to replace the six working-age benefits. The aim was to simplify the benefits system, improve work incentives, reduce the potential for error and fraud, and mitigate poverty among low-income families. Those are broad principles that we share—I certainly do—but universal credit as it is today is not that system, and it is the most vulnerable people who are suffering and will continue to suffer as a result.

We are pleased to have campaigned for—and, in the Budget two weeks ago, secured—money back into universal credit. That is, however, only a small fraction of the £7 billion in social security cuts still to come by 2022-23, according to Institute for Fiscal Studies analysis. That will both make families worse off and be worse for the Government and the state of the public finances—a point I shall cover later.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this matter before the House. What he cites is not specific to Nottingham; it applies to other parts of the United Kingdom, including my constituency of Strangford. Does he agree that this “simple” scheme, which is easy for those who are computer-literate, is not so simple for many? More consideration must be given to those who are not able to claim correctly due to genuine misunderstanding and miscommunication, given that they can be penalised with sanctions if they cannot work through the system. The system simply does not work for the ordinary person.

[Alex Norris]

The hon. Gentleman is right that what I have to say about Nottingham is informed by the experience of other parts of the country, so it will be true for every community in the land. Yes, the system is supposed to be simple—we want a simple system that promotes work—but there are lots of pitfalls, which people with the best of intentions are falling into. I completely share his view that such people ought to be supported.

In June, I was startled to read that the National Audit Office had found that universal credit might end up costing more than the existing system, that it cannot prove that it gets claimants into work, and that it is unlikely ever to deliver value for money. We should all look at that.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

As my hon. Friend knows, the false economy of some of the new systems worries me. That is one of the reasons why I have always argued that advice services should be a statutory function. Citizens Advice states that for every £1 invested in advice services, we can save £10 from people falling out of the benefits system because of mistakes and so forth. Is not the worry about this particular form of the universal credit roll-out that it is leaving people confused and in a messy situation, without proper advice from the system to fall back on?

[Alex Norris]

I thank my hon. Friend—my neighbour—for his contribution. I absolutely agree with that. I am passionate about advice services. As he knows, in October last year I led a debate in Westminster Hall on advice services in our city. They do incredible work to help people find a way through that fog, but they are clearly under real pressure. Our council is also under extraordinary financial pressures, but has put more into the area, trying to support it when many other services are not being treated similarly. I am pleased it is doing that, but a real need is clearly building up. I will cover much of that.

It is important to understand the context of what has happened elsewhere. The Trussell Trust found that 12 months after roll-out, on average, food banks see a 52% increase in demand, compared with 13% in areas that have had universal credit for three months or less. The Children’s Society has estimated that under the proposal for an earnings threshold, about 1 million children living in poverty will miss out on free school meals. That will almost entirely affect working families. Furthermore, under universal credit, £175 million for families with disabled children will be cut. Analysis by Contact suggests that because of the 50% cut to the child disability payment under universal credit, 100,000 families with disabled children will be worse off by more than £1,750 per year. Also, a report by Policy in Practice has indicated that 750,000 households on “disability benefits” will lose, on average, £76 per week.

[Vernon Coaker (Gedling) (Lab)]

What my hon. Friend says is the reality. Whatever the Minister says, the reality for people in Nottingham or my constituency is that they lose lots of money. In many cases, they received x amount under one set of benefits, but lose significant sums of money when they move to universal credit. Instead of living in a parallel universe, the Minister should come to the real world.

[Alex Norris]

I share that view, and it saddens me. I have been a Labour party member for all my adult life, and I am proud to be a Labour party Member of Parliament. The meaning of “Labour” is work, so we believe that work is good for people. We want people to work, so when we hear of a welfare system that promotes work but provides a safety net, we think, “Yes, that’s good. Even better, it’s going to be simple.” What was and is never explained is the bit after the asterisk: “Also, it’s going to be a vehicle for reducing the benefits bill”—even though there is no evidence to suggest that it will succeed. That is why we have a lot of the challenges and the chaos. The Library estimates that in February this year, nearly 13,000 people were not paid in full on time, and 7,500 people did not receive any payment at all.

[Lilian Greenwood (Nottingham South) (Lab)]

Not only are people not paid on time, but many people have their claims rejected. They then have to go through the process of seeking mandatory reconsideration and sometimes an appeal. A large proportion of those appeals are successful, but in the meantime people have racked up debts, and in some cases even been evicted from their home. That has a significant impact on them, their families and their mental health. Is not that failure to maintain someone’s benefits during an appeal a problem with the system that the Government should address?

[Alex Norris]

I completely agree. When claimants are successful on appeal or at tribunal, they get their payments backdated, and I sometimes read, “So that’s all okay, then.” It is not, because in the meantime that has put extraordinary pressure on people who are, by definition, vulnerable. That is not to mention the anxiety. I am grateful to colleagues for their contributions.

I have listed quite a few numbers; it is important to start with the context and what has happened elsewhere, which is what I think is coming to us. We have to remember, too, that behind every one of those statistics is a human being, a family and a life. We in this place have a real duty of care to ensure that we look after those people, and that the changes that come about from legislation from this place support them.

In my constituency, about 20,000 people either already receive universal credit or—the bigger chunk—are on the six legacy benefits and will move on to universal credit at some point. That is about one in four eligible adults. The issue is significant, so it is important for me to focus on it in my role. We hear the stories about what has happened; they show the devastation of lives and the injustice.

I have received support and information from local advice services; my hon. Friends the Members for Nottingham East (Mr Leslie), for Nottingham South (Lilian Greenwood) and for Gedling (Vernon Coaker) and I recently attended a meeting with Advice Nottingham. We were grateful to hear the direct experiences of those who give advice and those living in the benefits system. Beyond “Brexit”, “hostile environment” must be the defining political term of the year. I contend that the term applies not just to the Home Office’s immigration policies and Windrush, but to welfare. Having talked to those individuals, I felt that they were the victims of such an environment. Slightly beyond universal credit, my friends at Disability Direct in Nottingham say that at tribunal, they are successful between two thirds and 70% of the time. If those who appeal at tribunal are winning more than two out of three times, the system does not work.

I would like the Minister to consider a couple of practical issues that have been raised with me. The first is on digital support and access to online services. Nottingham City Council has very helpfully provided a list of public access computers to try to quell worries. Advice Nottingham says that it was assured by the Department for Work and Pensions that support would be available from work coaches at all jobcentres, and that any new universal credit claimant needing support would be able to get help from a jobcentre on demand. We have three jobcentres in Nottingham city: two in the city centre and one in Bulwell in my constituency. Those are obvious locations for a jobcentre, but we are a big city, so many people must travel more than half an hour by tram or bus to get to them. There is a real cost implication for vulnerable people, especially if multiple visits are needed. That needs consideration.

We are in the very early stages of universal credit, but I have already heard an example from Advice Nottingham of how it is not working in the constituency of my hon. Friend the Member for Nottingham South; I hope she does not mind my borrowing it. A client wanted to make a universal credit claim and had no digital support at home—no computer or smartphone. They travelled for 35 minutes, mainly by tram, to their nearest jobcentre, as they had been told to, at a cost of £3.50 for a day ticket. When they arrived, the work coach told them to visit their local advice agency, which was Clifton Advice Centre, where they would get help. No one at the jobcentre offered to help them complete their application or pointed them in the direction of the local library, where they could get digital support. Instead, they travelled back home and made an appointment to see a welfare benefits adviser, losing time, money and peace of mind in the process. The system is not working.

I have spent time with my local jobcentre staff, and I know them to be committed folks with the best of intentions who are making the best of a difficult situation, but they must have the right skills.

[Lilian Greenwood]

My hon. Friend makes an important point about people’s access, even to make a claim. My constituent Errol Richards spent the whole of the last two weeks trying to make an initial claim, without success. He initially tried to register his claim at Jobcentre Plus, but his claim crashed before he could attempt to submit his identification documents, and there was no scanner available. He then made two lengthy visits to different libraries in Nottingham, but still could not submit the initial claim because the universal credit system crashed again. Should the Government have not addressed those problems and ensured that their IT systems were sufficiently resilient before trying to roll out universal credit to thousands of additional claimants?

[Alex Norris]

I am very sad to hear that contribution. Clearly, that individual is trying to do the right thing, and the system is not supporting them. That is not particular to Nottingham; it has happened throughout the roll-out process. It is not acceptable to impose universal credit on our community while knowing that these challenges would happen. Accessibility is a real issue. The one-size-fits-all approach of digital technology must be considered, because that poses a challenge in communities such as mine.

My advice to constituents on all big changes such as these is to engage and be proactive, and not to put letters in a drawer. When people come to see me at surgeries, I wish, as all other hon. Members do, that I could have seen them two weeks earlier, or one letter left in a drawer earlier, because that would have helped. I was talking to a colleague last night while rehearsing some of my arguments. His constituency is further ahead in the roll-out, and he said that a constituent had tried to be proactive because, having heard about all the challenges, they did not want delayed payments. The person was on legacy benefits and did not need to transfer, but they transferred anyway, so their universal credit application was, in essence, a new claim. That unnecessarily kicked them off the old legacy benefits and into the new system, which meant that they would lose their transitional protection. Even when we try to help, the perverse incentives in the system mean that there is a risk that we do more harm than good.

Christmas is coming, and in Nottingham we have big retail and services sectors, which will mean that for many constituents and residents in the city, there will be a chance for extra hours. There is not enough awareness of, and support for people to understand, how changes in their income will affect their universal credit. The money comes into their bank, and they realise they are not getting what they had banked on, because those extra hours do not necessarily mean the extra income that they thought they would get. I have been contacted by the GMB trade union. I refer colleagues to the Register of Members’ Financial Interests, because I have long history of campaigning with it. It has produced useful advice, because it fears that staff will not know about that. Across the system, we need people to understand that if they do more, they must factor that into the calculation; otherwise, they will get a nasty surprise.

I feel particularly strong about my final point. Many aspects of universal credit are exceptionally important, which is why we are having this debate. They get a lot of coverage, but the issue of joint claims and split payments does not. At the moment, when applying for universal credit, couples make a joint claim and a single benefit award goes to the household—either to one recipient or into a shared bank account. In the past, at least child tax credit could be expected to have gone to the woman or the mother. I was responsible for domestic abuse services in Nottingham for a number of years; that money would offer a way for a woman to leave an abusive situation, because it would allow them to pay for petrol, or a train or bus ticket, so that they could get out of that situation.

The single payment creates an opportunity for abusive partners to exert financial control over their spouse by withholding funds and making it difficult for them to access money to meet their and their children’s needs, or to leave the situation. Refuge reports that one in five women and one in seven men experience that type of financial abuse. Survivors of domestic abuse can request that their payments be made separately as part of an alternative payment option, but the guidance given to work coaches is that split payments can be considered only where the claimant notifies the DWP of financial mismanagement, financial abuse or domestic abuse in the household. The work coach then makes a decision on whether to grant that split payment, but the other member of the household can request that the single payment be reinstated.

Eight-five per cent. of women surveyed by Women’s Aid said that requesting separate payments would worsen the abuse at home. People live in a dangerous fantasy land if they think that a woman will march down to the jobcentre, possibly with her abuser, and request that payments be split because at some point she might want to leave that abusive relationship. That is unnecessary and damaging, and it needs to be resolved straight away. The Scottish Parliament has already passed legislation to split payments by default; the implementation is yet to be finalised, but it is vital that the Government pay full attention to that and seek to replicate it as soon as possible.

We want a welfare system that promotes work, but protects people in tough times; however, we have made our safety net out of barbed wire. That is wrong. Advice services in Nottingham are doing their best to help; Nottingham City Council is doing its best; DWP staff will do their best to make it work. Fundamentally, the system does not work; it should not be imposed on my community until it does.