Universal Credit Roll-out

Bob Seely Excerpts

Wednesday 18th October 2017 Commons Chamber

[Debbie Abrahams]

I am sorry, but I will not.

Half those in rent arrears under universal credit report that they entered into arrears after they made their claim. What is worse is that many claimants do not even receive support within the Government’s lengthy six-week deadline: one in four are waiting for longer than six weeks and one in 10 are waiting for more than 10 weeks. The Government’s so-called advance payment, which is meant to be available to those in need, is in fact a loan that has to be paid back within six months out of future social security payments. I recognise and welcome the Secretary of State’s announcement about speeding that up, but I will explain later in my speech exactly what we might need to tweak.

As we have heard, the measures I have outlined are pushing people into debt, rent arrears and even homelessness. Last year, the National Housing Federation warned that approximately 80% of tenants on universal credit were in rent arrears, with the six-week delay being attributed as the key cause. A few weeks ago, a nurse came into my surgery. She was a single mum who had transferred from tax credits to universal credit. She had the six-week wait, and as a result the arrears racked up. When she came to see me, she had just been served an eviction notice. As universal credit is rolled out, such stories will become more and more common.

The Mayor of Greater Manchester has warned that rough sleeping will double over the winter if the universal credit roll-out continues without its fundamental flaws being addressed. This is not scaremongering; it is based on estimates by local authorities in which universal credit has already been rolled out. Throughout Greater Manchester, the average arrears for people on UC in social housing is £824, compared with £451 for non-UC tenants. It is already having an impact on rising evictions and homelessness—and that is without even going into what is happening in the private rented sector. In addition, the increase in rent arrears for social housing landlords means that less money is available for investment in housing-stock maintenance or the building of new social housing, thereby adding to the existing housing crisis.

The increase in food bank use is another consequence of universal credit delays. Earlier this year, the Trussell Trust reported that referrals for emergency food parcels were significantly higher in a UC area, at nearly 17%, compared with the national average of just under 7%. The trust’s report also highlighted the impacts on the mental health of people on UC, who were described as stressed, anxious or depressed, as they worried about being unable to pay bills and falling into debt.

Who is most likely to be affected and why? Single parents are particularly vulnerable under universal credit. There are now 65,000 single parents on UC. Gingerbread has described how, through

“error in administration and the structure of the system itself, single parents have been threatened with eviction and jobs have been put at risk”.

Gingerbread told me about Laura, who lives with her two sons, one of whom is severely disabled. Laura had to apply for universal credit when her temporary contract at work ended. She had to wait eight weeks for support, and visited a food bank to feed her children. She was not told about advance payments and was struggling with rent arrears. Reflecting on her experience, Laura said:

“it’s very stressful, single parents quite often have enough stress and worry about money; and other things, bringing up your children to start with and it’s exacerbated by this very unfair, very unjust system”.

With child poverty among single parents forecast to increase sharply to 63% by the end of the Parliament, it is vital that we fix the social security system to ensure that it is working. In a forthcoming Child Poverty Action Group report analysing the cumulative effects of social security changes on child poverty since 2010, the section on universal credit highlights its design issues and, in particular, the detrimental impact on single parents. It states:

“Universal credit was designed to be more generous to couples than single people, with lone parents in particular expected to lose out compared with tax credits. This was a deliberate reaction to the decision, within tax credits, to boost support for lone parents in comparison with couples because of their higher risk of poverty and the greater difficulty of increasing earnings from work if you are a lone parent.”

The report goes on to say:

“Since its initial design, universal credit has been subject to a succession of changes and cuts which have substantially reduced its adequacy overall… As a result, it is now less generous than the system it is replacing, and no longer offers the promise of reducing poverty.”

Universal credit is not just affecting single parents; young families and families with more than two children will also fare much worse under UC. Young families going on to universal credit will be affected by the decision to introduce a lower under-25 rate of the standard allowance in universal credit, even for parents with children. As a result, young families will be at increasing risk of poverty, especially if they have a single earner or a second earner working part time. Of course, among other cuts, limiting the child element of support to only two children leaves families with more than three children worse off as well. The report reiterates that as well as being less generous and actually cutting family income, UC fails to incentivise people into work or to progress in work, which are fundamental principles of UC. Shockingly, it has been calculated that, because of the cuts, universal credit will push a million more children into poverty by 2020, with 300,000 of them under five.

[Mr Bob Seely (Isle of Wight) (Con)]

On a point of order, Mr Speaker. The last time that the Leader of the Opposition spoke on this issue, he made a series of entirely unsubstantiated factual claims about housing in Gloucester. Are these further unsubstantiated claims?

[Mr Speaker]

Order. That is not a point of order and it is an abuse of our proceedings. I strongly counsel the hon. Gentleman not to make the same foolish mistake again.

--- Later in debate ---

[Anna McMorrin (Cardiff North) (Lab)]

It is obvious once again that this Government care more about saving face than serving the people of this country. This Conservative Government say that they are improving the lives of working people and getting people back into work, yet they are ignoring pleas from across this Chamber and the country to halt the roll-out of this shambolic universal credit system. We are being told that people should “get up, work hard and get on in life”, but these are hard-working people—families and their children—bearing the brunt of many years of Tory economic failure and austerity cuts.

[Mr Seely]

Will the hon. Lady give way?

[Anna McMorrin]

No, I will not give way.

The reality is that this accelerated and aggressive roll-out will see an increase in debt, rental arrears, food bank usage, and homelessness—people struggling to make ends meet, with real-life consequences. I know of one family who have had their two children taken into care because they were forced to move into a tent in a park after being evicted when their housing benefit was not paid on time. These children were taken away from their parents not because they were not loved, not because they were not cared for, but because this Government failed them.

It is clear that the current universal credit process is not fit for purpose. It is due to be rolled out in my constituency early in the new year, and I am already getting many people coming to me truly scared about how this is going to affect them. We are seeing an increase in homelessness in Cardiff, especially among young people, with an 18% increase in the past year.

--- Later in debate ---

[Mr Bob Seely (Isle of Wight) (Con)]

I have listened to this debate with an open mind, willing to criticise the Government if need be, especially if they were to fail my constituents on the Isle of Wight. However, the more I have listened, the more I believe that it is in our interests that universal credit should go ahead. I notice that the Opposition support that in principle.

Apart from the relentless negativity, there have been a couple of sensible suggestions. I echo what the hon. Member for Birmingham, Yardley (Jess Phillips) said about domestic violence and split payments. Will the Minister look into that? We need to be aware of people who are in an especially vulnerable position. I will work with Wight Dash, our domestic abuse centre on the Island, which I visited very recently to understand its specific concerns.

More generally, there is potential for financial hardship during the six-week transition period. I understand the principle, but if people have no money, they have no money, regardless of whether or not the principle is a good one. I join the chorus of those asking the Minister to do all he can to make sure that people transferring on to universal credit throughout the UK, including on my Island, know that they can be paid money in advance, with emergency payments on the same day. Will he consider increasing the advance from a half to, let us say, three quarters so that the principle of the loan remains, but a little bit more money goes into gearing up the system for success?

I will do all I can to work with my local groups to make sure that we are ready. Some Islanders have been on universal credit since last year and some will not be affected until 2019, but a lot are coming on to the system in May and June. The most important thing we can do is to make sure we are ready for that, so that we get the maximum upside from universal credit and all the fantastic support work that goes on around it to enable people to take opportunities, but will the Minister work with me to make sure that we minimise any potential negative effects as well?