Cost of Living: Parental Leave and Pay

Catherine McKinnell Excerpts

Monday 19th June 2023 Westminster Hall

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move,

That this House has considered e-petition 617155, relating to the cost of living and parental leave and pay.

It is a real pleasure to have you in the Chair, Mr McCabe. The petition asks the Government to

“Increase statutory maternity pay in line with cost of living crisis.”

I am sorry that this debate unfortunately coincides with events in the main Chamber that are taking the attention of an awful lot of Members as they debate the Privileges Committee’s report on the former Prime Minister. The situation does rather highlight how important matters that concern the people we represent do not get the attention they need in this place or in Government because of the issues that are being debated today.

This very important petition also asks the Government to

“Review statutory maternity pay in line with inflation and cost of living.”

It notes that the

“cost of living has been increasing across the UK since early 2021”

and that the impact of inflation on

“the affordability of goods and services for households”

has been significant.

Raising a child is a gift. I am fortunate to know from experience the joy of being a parent, just as I also know the many challenges that parenthood can throw up. I want to outline, on behalf of the petitioners who brought it to our attention in Parliament, the fact that the gift of parenthood is being eclipsed for many by the mire of spreadsheets, cost cutting and the damaging health effects of the cost of living, which has shot up over the past year or so.

The petition’s creator Nicola Sheridan, who is here with us today, counts herself very fortunate. She is a meticulously organised professional who made many plans in advance of having her baby. She looked at the many costs and saved up for a safety net so that she could take a full year away with her son Harry. But while she was following the news during her pregnancy, that first year of their life together, which she had so carefully planned, was continually thrown into doubt by soaring costs. Excitement was replaced by fear and anxiety. I am grateful to Nicola for sharing her experience of the spiralling costs that many parents face, as I know having heard from them ahead of this debate.

Nicola’s experience is far from unique. The number of signatories to the petition indicates that there are many parents who have either experienced the same level of anxiety or share the same concerns. Charities and campaign groups have also been campaigning on the issue, and understandably so. I am grateful to Pregnant Then Screwed, Maternity Action and the Institute of Health Visiting. When I met them prior to this debate, they impressed on me the stresses that parents are feeling; I will expand on that point in more detail later in my speech. Alison Woodhead and Katharine Slocombe from Adoption UK shared the distinct pressures that adoptive parents face. Dr Alain Gregoire from the Maternal Mental Health Alliance set out clearly the scientific case for early years investment. The Child Poverty Action Group stressed that inequality has worsened and is being embedded by a lack of support for low-income parents. From all the people I heard from, one message was resoundingly clear: failing to adequately support new parents in the face of the worst cost of living crisis for generations will have profoundly damaging consequences for parents and children in both the short and the long term.

The headline inflation figure remains stubbornly high at 8.7%, after a peak of 11.1% last October, but inflation is only half the story. It has been concentrated in the fundamentals that new parents rely on: heat, food and personal care goods. The spiralling cost of energy has been widely reported, and has outsized food inflation, which rose to 19.2% in April this year. What has received less attention is the startling rise in goods essential for looking after a newborn. Since March 2021, the cost of formula milk has risen by 24%, with the cheapest own brand option increasing by 45%. Last year, in the 12 weeks to 19 August, the price of Pampers rocketed by up to 60%.

Meanwhile, statutory maternity pay, statutory paternity pay and maternity allowance have risen by 10.4%. It is not hard to do the maths. There are two primary concerns about how the uplift is calculated and administered. First, the uplift comes in only once a year and uses the consumer prices index from the six months before. As a result, by design, the money that new parents receive from the Government will be out of step with what they actually need. Secondly, many feel that the financial support for new parents is simply not enough anyway. The current statutory rate for parents is £172.48. Compare that with the minimum wage for an average 37.5-hour week, which comes in at £390.20. When the added costs of a new child—cots, prams, clothes, food and formula—are considered, many parents are left with big holes in their budget.

The support for parents is not generous at the best of times. The UK has one of the least generous support programmes for new mothers among OECD countries, with only Ireland and the USA offering less. Add a near-unprecedented cost of living situation to that state of affairs, and we are not far off a crisis. I know that it is easy to slip into a jumble of numbers when discussing the cost of living crisis, so I will focus on the reality for parents, especially mothers, on the ground. We know that women still provide the majority of childcare, and significantly more than men. When we talk about the impact of the cost of living on parents, we absolutely must include fathers in that, but we have to focus on the stress and strain of raising a baby, which is often borne by mothers.

While preparing for the debate, I spoke to a group of really inspiring and strong mothers from Newcastle, alongside the charity Children North East. The reality of modern motherhood that they painted was fraught with challenges. Stress was a recurrent theme, as mothers described the anxiety that rampant inflation is causing them. It is making budgeting almost impossible. Mothers dismiss the Government’s promise of free childcare as a myth, as cost pressures are forcing nurseries to charge for nappies and food, and the number of hours and weeks covered by the Government’s scheme does not match working reality. For those mothers, labelling it as free feels rather like an insult.

One mother spoke vividly of being a new mother as

“one of the most challenging moments in your life”.

Her overarching view was that

“it’s just so stressful—everything is new, your hormones are all over the place”.

Even if you do make a plan, the stress can be overwhelming. She said that

“we are going to end up with a mental health crisis and we’re going to ask why.”

That is even before she has factored in the struggles with budgeting. Add the impact of being a new mother, on top of wondering whether you can even afford formula for your baby, and the stresses and strains that new parents are under become very clear.

Soaring prices and a lack of support are leaving mothers on the brink. I fear that the Government just do not get the reality for new mothers on low household incomes. The Government’s response to the petition justified current statutory pay levels, saying that they are

“higher than the level of other out of work benefits”.

That line rankled with many mothers, and not without cause. Being a mother, especially a new mother, is far from being out of work. Motherhood is work. One mother told me that

“it’s the hardest thing that you’ll ever do in your life”.

You are left alone, weakened after often traumatic childbirth with a tiny person you are entirely responsible for keeping safe and nurturing. Waking up throughout the night to feed them, breastfeeding, changing nappies, playing games, placating them when you have no idea what is wrong—the Government would do well to stop calling that being out of work.

For many prospective mothers, fathers and adopters, the joy of adopting and welcoming a child has been subsumed by anxiety stemming from financial concerns. Paired with this, the tightening of budgets leads parents to spend less on heating and less on healthy food, which affects their mental and physical health as well as the mental and physical health of their child.

In preparation for this debate, the Petitions Committee conducted a survey of petitioners, made up largely of current parents and prospective parents. Some 93% of new parents who responded thought that Government support was inadequate, and a staggering 89% of new parents recorded difficulty in accessing basic equipment like a pram. Faced with such crippling financial hardship, mothers are missing meals, going without heating and cutting down on all spending on themselves. One parent told us that

“the lack of financial support is a constant stress and worry”,

while 92% of parents reported financial difficulties in accessing social activities as basic as visiting family and friends. It is difficult to overstate the importance of these social activities. Raising a child is a full-time job and can be incredibly isolating; moments of happiness can be interspersed with periods of profound loneliness, stress and vulnerability. Family and friends provide that vital relief and support. Taking away a mother’s ability even to visit people can prove overwhelming.

Some 97% of new parents who responded to our survey were concerned about the impact on their mental health of having a child. We are already seeing a decline in parents’ mental health. In January, the Institute of Health Visiting found that 83% of health visitors reported an increase in perinatal mental illness. We must be clear that financial and mental stress also have a direct impact on children. Dr Alain Gregoire, who has studied the impact of early adversity on children, has found that from the moment of conception onwards, poor maternal mental health has an impact on babies, leading to worse outcomes across health, educational attainment and happiness later in life. The stakes are incredibly high, and we are storing up problems for the future if we do not address this. Any Government who look at the evidence have to conclude that early years support for parents and children must be a priority.

It will be little surprise to Members that the cost of living is having a disproportionately large impact on the poorest mothers and babies in our society. We already know that inequalities lie at the root of poorer outcomes for pregnant women and infants, but these are now being compounded by the cost of living crisis. Some 91% of health visitors have observed an increase in poverty affecting families, alongside an increase in families needing food banks.

I have spoken before in this place about the impact of poverty on child development; it is a big issue in my region, and the number of children growing up in poverty is staggeringly high. But it is a vital point and is worth repeating: poverty leads to worse educational attainment, worse physical health, worse employment prospects and worse life expectancy. Poverty even leads to a higher risk of neonatal death.

These outcomes cannot simply be accepted. The Government have a responsibility to act. For example, Healthy Start vouchers are an important lifeline for struggling parents, allowing them to access nutritious food that we know is vital for child development. After the digitalisation of the scheme, take-up was more than 10% short of the Government’s own rather modest target of 75% in March, yet there is no clear plan to improve the uptake. It is well within the Government’s scope to change that. I hope that the Minister will respond specifically to that point.

Furthermore, as Pregnant Then Screwed and others have pointed out, the UK has one of the most complicated parental pay systems among developed countries, resulting in many parents missing out on the support that they are entitled to. Difficulty in accessing Government support is particularly acute for adoptive parents: they are not entitled to the same support as other parents, and self-employed adopters have no statutory right whatsoever to parental pay, so even when support exists, access is clouded in uncertainty. Self-employed adoptive parents can apply to local authorities for grants, but whether that money is given or withheld is entirely discretionary. The all-party parliamentary group for adoption and permanence has found that 90% of adopters said that their social worker had failed to advise them to apply directly to their local authority, so even those who are working in this field cannot work out the system.

Adopted children are already especially likely to have specific and costly needs that can take a significant financial toll on adoptive parents, and the cost of living is making the situation worse. Nine out of 10 prospective adopters told Adoption UK that the cost of living is having an impact on whether they choose to adopt. Of course it is. This is the impact of the cost of living: the children most in need of loving and supportive families are being left in homes and in foster care. Government inaction has meant that a child’s start in life could be determined by nothing more than their postcode. The next generation will be defined permanently by today’s inequality if we do not take action.

I have heard from a mother who spent most of her time applying for the support available worrying that she was getting it wrong. She was so nervous about having it clawed back that she cut her access to some of those support payments. Even when parents are entitled to support, the lack of clarity and the complexity in the system cause great anxiety for parents, on top of the sleepless nights looking after their children. It is probably the sleepless nights that are inducing the anxiety. It is a vicious cycle for many parents.

Inequality becomes embedded early and is self-fulfilling. Intervention at the earliest possible stage is our best defence against it. The earlier the intervention, the earlier the rolling snowball of inequality is halted. Money today will have drastic positive benefits further down the road. It is not just wishful thinking; game-changing early investment has happened before and could work again. Sure Start, introduced by the last Labour Government, led to around 13,000 fewer hospital admissions in older children each year, according to the Institute for Fiscal Studies. At a time when our NHS is severely overburdened, the case for early intervention could not be stronger.

The next Labour Government will introduce free breakfast clubs for all primary schoolchildren, a vital investment that will ensure children have access to healthy food and have a full stomach so that they are ready to learn. Let us remember that many parents who have taken time out to have a baby will often have older children they are trying to feed as well. This is the kind of investment in the future that we will see after many years of inequality.

We know that in the earlier stages of life, time spent with parents is vital for children. What is more, parents want to spend time with their children. Research by the Trades Union Congress found that one in five dads are forgoing all paternity leave because of financial concerns, while mothers are being hurried back into work because statutory pay simply does not go far enough.

[Munira Wilson (Twickenham) (LD)]

The hon. Lady is making an excellent and powerful speech. Does she agree that with statutory paternity and maternity pay levels so low, at less than half of full-time pay at minimum wage, parents are not being given any choice? Choice is so important. As she says, research shows that in the early days of a baby’s life, having a parent at home, whether it is the mother or the father, is critical. Given the cost of living crisis in which people are struggling with mortgages and soaring food prices, people just cannot afford to take the option of staying at home. They are being forced back to work before they want to go back.

[Catherine McKinnell]

I absolutely agree. The hon. Lady raises the dreaded mortgages issue, which I have not even touched on, but that is a cliff edge looming for many families, if they have not already gone over it.

One of the mothers we spoke to told the Petitions Committee survey:

“I and many other women felt they had to go back to work at 6 months because it wasn’t possible to continue”.

No mother should have to go back to work for any other reason than that it is right for them and their family, and right for them in their career. If they want to stay off work for the full statutory entitlement, that should be their choice, as the hon. Member for Twickenham (Munira Wilson) rightly pointed out.

Those first months with a newborn are irreplaceable—you never get that time back—yet unsupported parents are being left with no choice. That is the key point. Some mothers may want to go back much earlier, and that is their choice, but the difficulty is that for parents who want to stay off for longer, their choice is often taken away by the reality of soaring prices and a shortfall in support. Mothers are being stranded in an impossible situation, completely torn in two by their work and their childcare responsibilities, and many parents who go back are finding how unaffordable it is because of the soaring costs of childcare. For so long, the motherhood penalty has suppressed mothers’ earning power and independence. That short period of time when they have a small child at home can affect their earnings for the rest of their career and life.

Several mothers in Newcastle spoke to me about the isolating impact of fathers being required to return to work, unable to take the parental leave that many mothers would love to see them take. One mother even said:

“As a Mam, when you’re left on your own after 2 weeks it’s terrifying.”

I remember that feeling. Another described the claustrophobia of being left with her children day in, day out without respite. She said:

“You see your husband going out the door to work and you want to race out the door with him.”

Frightened and alone, new mothers are being let down. A broken childcare system, fathers feeling as if they are unable to take leave, and the negative mental and physical health impacts of raising a child, amplified by the cost of living, are confining women back to their homes. The gender inequality that we should have left in the distant past is creeping back into our lives, and it feels as if the Government are asleep at the wheel.

[Munira Wilson]

I thank the hon. Lady for giving way again; she is being very generous. I am passionate about the question of fathers, because in families up and down the country, including my own, fathers are taking the primary responsibility for looking after children. I am proud that it was the Liberal Democrats in government who introduced shared parental leave in 2015, but sadly the take-up has been far too low. We need to build on that by improving pay. We should make parental leave for all mothers and fathers, whether they are employed or self-employed, a day one right. Does the hon. Lady agree, and does she agree that paternity leave should also be increased from the short period of two weeks? On average, it is about 10.4 weeks across advanced economies.

[Catherine McKinnell]

The hon. Lady speaks very passionately about the impact of parental leave. I am not here to make policy for either the Government or Labour’s Front-Bench team; I will leave that to the two Front Benchers who are here to speak on behalf of the main parties. But I can speak for the petitioners. One mother who spoke to me said that increased paternity pay and leave would be

“the dream, it would have stopped it being all on me.”

I think that quite often the petitioners, who have brought us all here today, say it better than many of us could.

The Petitions Committee has previously highlighted the further action that must be taken to protect expectant and new parents from redundancy, by making it illegal from the moment employers are notified to six months after maternity leave is over. We are proud of the work we have done to see some of those changes in Government.

I want to ask the Minister a few questions about the issues that I have raised; I am sure she has been scribbling notes already. Will she commit to reviewing the way in which statutory maternity pay, statutory paternity pay and maternity allowance are calculated, so that the pay better reflects the rate of actual inflation and so that the money that parents are getting is not diminishing before their eyes? That seems to be the source of a huge amount of anxiety, as I am sure the Government appreciate.

What is the Minister doing to ensure that every mother knows the support that they are entitled to? Too often, parents seem to lack the information necessary, or they are given incorrect information and miss out on vital support. Will the Minister consider equalising access to statutory parental pay for adoptive parents, including those who are self-employed? Can the Minister account for why the take-up of Healthy Start vouchers remains below Government targets? What are the Government doing to improve that? It is within their gift to do so.

Finally, what recent assessment have the Government made of the impact of maternity pay rates on social health outcomes for new mothers and babies? It is important that we monitor what can be assessed, and outcomes for children can be clearly assessed in age two developmental assessments. Sadly, indications are that they are getting worse, not better. The petitioners would certainly indicate that improving support for new parents would improve outcomes in those age two development assessments.

The status quo does not need to be permanent. Yes, we are in a cost of living crisis, but we can change it. We can change it for the youngest people in our society to ensure that it does not have long-term negative consequences, but that requires the Government to listen to the concerns raised by petitioners and take action. It is a complex issue, and a multitude of stakeholders will be engaged in it. However, at its core is that profoundly important experience of raising a child. If our society allows having a child to become unaffordable, fewer people will choose to have children. One new parent told us:

“Having children in 2023 is no longer a choice you make with your partner, it’s a calculation on a spreadsheet”.

That is the cold reality of modern parenting in the UK. Western societies are existentially threatened by ageing populations, falling birth rates and the need to pay pensions, yet our Government are standing by while this car crash happens in slow motion. The cost of living crisis has shined a sharper light on a situation that was already becoming untenable.

To return to Nicola, the petition’s creator, it is a broken system when even the best prepared mothers feel that they have no option but to create a petition to get the Government to listen and do something. Through no fault of their own, children today are being born into precarity rather than stable, financially secure homes, with parents burned out by stress and isolated by incomes shrinking relative to inflation.

I urge the Government to look seriously at what can be done for new parents, whether that is following up on the recommendations of petitioners by linking statutory pay to the cost of living, by expanding paternity leave or by ensuring that more support is available for new parents in other ways. One thing is clear from the plethora of evidence I have taken ahead of this debate: doing nothing is not an option.

[Steve McCabe (in the Chair)]

As the mover of the motion said, it is unfortunate that this debate has possibly been affected by events elsewhere, but none the less we are blessed to have the omnipresent Jim Shannon. I call him now.

--- Later in debate ---

[Catherine McKinnell]

I thank the Minister for that response, which covered in quite some detail many of the issues that have been raised. I also thank the hon. Members who made contributions today: the hon. Member for Strangford (Jim Shannon); the SNP shadow Minister, the hon. Member for Glasgow East (David Linden); and the Labour shadow Minister, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders).

The Government’s response on broader help for households during this cost of living crisis is clearly welcome, but I worry that speaking in such general terms somewhat neglects the very specific challenges that parents are facing at the moment. I could go back to all the statistics that we have looked at on the impact of the cost of living on parents, and on the challenges around the Government support. The Minister mentioned the headline figures, but the reality for parents that we are hearing—their experience of how anxious they are and how much they are struggling—does not match up to the big numbers that the Government cite.

I want to focus my closing remarks on those mothers and fathers whose struggles have made this debate necessary today. Society’s duty is to look after our next generation—to protect and nourish them. Parliamentarians and Government in particular have a huge role to play in support of families to do just that. Mothers are crippled by stress, with rocketing prices and the isolation that people experience in society today. The way it is formed means that support is just not available to deal with such a level of crisis as in this acute period.

We have had a lot of talk about parental leave, pushing on paternity leave, but clearly that comes down to money. An awful lot of families cannot afford for the dad as well as the mum to take parental leave; the Minister spoke powerfully about that, and I hope that we see the Government take steps. There is also the absence of Sure Start centres in many localities, which used to provide some of that support for mothers who feel very isolated. We are finally seeing the rebirth, to some extent, of Sure Start through the family hubs, which are very welcome, but there has been that gap, and there is still a real gap.

Many mothers carry the burden on their own. That has been the case for some time, but they are now carrying it with the crushing anxiety of rising prices—I do not know about everyone else, but every time I go to the shops I am shocked by how much the products I buy every week have gone up. Given that isolation, we are seeing worsening maternal mental health: the statistics show that that is with us already. With the economic disenfranchisement and the deeply entrenched inequality, the impact on children of the deepening maternal mental health challenge is already evident.

One of the mums who spoke to me referred to the soaring costs as “always in my head”—constantly, every day, having to work out what to make for dinner and what she can buy from the shops. She says that it is never out of her head. She can already see the impact on her child, who knows now not to ask for anything until payday. That period when nothing can be bought is getting longer, not shorter, every month. Things are getting harder for families, not easier.

From my preparation for the debate, what has been hard is that for many families raising a child is no longer a source of joy and hope; it is a source of stress and anxiety. We cannot sustain that as a society. The call for statutory parental pay is just another addition to the clamour of calls for change, on top of our discussions about the costs of childcare and housing and, before that, about the food bank crisis, which has now become normalised. We are going from a bad situation to a worse one, and we need to turn that around.

I am encouraged by the Minister’s response, and I do not doubt her personal commitment to the issues, but I hope that the Government have listened today to what parents have said. My final word goes to our petition’s creator, Nicola Sheridan, who amid all her preparations during pregnancy for childbirth did the heroic thing of starting a petition to bring the issue to the House to be discussed and debated so that the voices of those struggling parents are heard. I hope she does not mind me saying this, but she did that because she knows that she is the fortunate one and that many are not in as fortunate a position as she is. She has done a truly heroic thing by bringing the issue before Parliament.

The Minister has been restricted in what she can say in response to the debate, but I hope she will take it away and give it to the various Departments that can truly make a difference to the many aspects of our concerns, and that we will see change and see that support for families. The future of our children being born today is too important to leave to chance.

Question put and agreed to.

Resolved,

That this House has considered e-petition 617155, relating to the cost of living and parental leave and pay.

Labour Market Activity

Catherine McKinnell Excerpts

Tuesday 28th February 2023 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

When we look at the financial reality for millions of people up and down the country, it is clear to see why we are struggling to maintain a workforce in Britain today. The system for working people is broken and urgently needs to be fixed. We can take the cost and availability of childcare as just one example.

The Women’s Budget Group has highlighted that 1.7 million women are prevented from taking up hours of paid work, which they would like to do, due to childcare issues. That is almost £30 billion lost to our economy every year. We know that this does not show the full picture: many grandparents are helping out, cutting down their working hours, or leaving work entirely to support their children and grandchildren. This is not just about childcare, but about other caring responsibilities, which we know fall disproportionately on women. With a broken childcare and social care system, is it any wonder that in the north-east there has been a 15% rise in women between the ages of 50 to 64 falling out of the workforce since 2020? That is not to mention the increase in new mums dropping out of the workforce, with 29% of those nationally dropping out of work due to family commitments.

I am pleased that Labour’s shadow Education Secretary has spoken so passionately about the need to transform our childcare into a modern system that supports families and allows parents more flexibility to re-enter the workforce. This system needs to be fixed. We also know that women are struggling at work due to perimenopausal and menopausal symptoms, and that they do not get the help or support they need. Last year, Research Without Barriers warned that up to 1 million women in the UK could be forced out of their jobs because their employers are failing to support them as they go through the menopause. As my brilliant hon. Friend the Member for Swansea East (Carolyn Harris) said, that is bad news for women, bad news for businesses, and bad news for the economy. So I, too, welcome the proposals set out by the Labour party today for greater support for women experiencing menopause.

Sadly, our amazing but overwhelmed NHS has been left unable to do its part to help people get back into work. Last year, the Bank of England’s chief economist warned that lengthening NHS waiting lists were a factor in fewer people being in work. The over-50s lifestyle study by the Office for National Statistics found that 18% of adults aged 50 to 65 who have left work since the start of 2020 did so due to waiting for medical treatment. That is nearly one in five, with this figure rising to 35% of people who said that they left their previous job for a health-related condition. That is not to mention that these people are often waiting in pain, unable to live their lives to the full. This is damaging the economy too. It is shocking and it needs to be resolved. That is why expanding the NHS workforce is so crucial. The inability of the Government to get a handle on these waiting lists and delays is not only bad for health, but impacting our economy, and we need those workers back in the workforce.

We are seeing this workforce crisis not just in the NHS, but in social care and across many businesses, and especially in hospitality in my area. Newcastle’s famous Geordie night-time economy is well known, but the sector is struggling with the recruitment and retention of staff. The NewcastleGateshead Initiative found that, in 2022, there were 26,000 unique job postings listed in hospitality, 30% of which were in Newcastle. In its most recent tourism and hospitality business survey, staffing was raised as the biggest challenge by 67% of respondents. On top of covid recovery, soaring energy bills and rising food cost pressures, these labour force issues are holding businesses, our cities and our regions back.

Even those who are in work are falling into dire straits due to the crippling cost of living. A constituent contacted me this week. She said that both parents are in work. They have four children and their mortgage has gone up by £300 a month, on top of the increase in their energy bills. Sadly, they are far from alone, with potentially thousands of people in my constituency being penalised by the mortgage premium that we have seen since the disastrous mini-Budget. Add to that food inflation, which this morning reached 17.1%, adding a further £811 hit to family finances. My constituent described how, due to the Government’s economic failure,

“good, hard-working people are being crippled.”

Those are her words, not mine, and the Government need to listen.

For too long we have been held back by successive Conservative Governments’ mishandling of the economy, mismanagement of public services and failure to invest in our people and communities. What kind of business thinks that it can fail to invest in its people and its infrastructure but still turn a profit after 13 years? None. We have immense potential as a country, but too many people are left crumbling under the current strain. Whether in childcare, social care or NHS waiting times, that all has a knock-on impact on our economy.

The Centre for Cities warns that it is even worse than the figures show: 185,000 people across the north-east are part of a hidden unemployment figure—they are not included in the numbers—because they are not actively looking for work. For too long people have lived under low pay, low productivity and a lack of investment. It is time to put an end to people struggling to get by.

Regional Inequalities: Child Poverty

Catherine McKinnell Excerpts

Wednesday 2nd March 2022 Westminster Hall

[Liz Twist]

I agree with my hon. Friend, and I will come to the economic aspects of this issue later. We do not yet have child poverty figures for the period during the covid-19 pandemic; I understand that we will not have them until the end of March 2022. However, from some of the available real-time information, it is clear that there has been a significant financial impact on thousands of families in our region. The north-east has experienced the joint steepest increase in the proportion of pupils eligible for free school meals during the pandemic of anywhere in England, having already had the highest proportion pre-covid.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

My hon. Friend is making a powerful and timely speech. She mentions free school meals; another support that many families in the north-east rely on is Healthy Start vouchers. A report by Northumbria University and Feeding Britain recently highlighted that there are incredible struggles with the move from a paper-based system to a prepaid card system. Families are being rejected at the tills in their hour of greatest need, and cannot get any help through the helpline. Does she agree that the Minister should commit today to urgently resolving the matter, so that families, and particularly children, get the support they need?

[Liz Twist]

I thank my hon. Friend for that valid and pertinent point. That is one detail that must be looked at—it is so important for those families. Turning to in-work poverty, the TUC found that 108,775 children living in poverty in the north-east come from homes with at least one parent or carer in work. That is an increase of 52% since 2010. Children growing up in poverty is not about parents who refuse to work, but rather a lack of good, secure and well-paid jobs in the north-east and across the north.

Universal Credit and Working Tax Credits

Catherine McKinnell Excerpts

Wednesday 15th September 2021 Commons Chamber

[Jonathan Reynolds]

Absolutely. That investment in people is essential, and this uplift that we are talking about today cannot be considered without remembering the benefits freeze that lasted for four years prior to 2020. As the former Secretary of State, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), has said, the uplift only really restored what the value of UC would and should have been.

The pandemic exposed what many of us already knew: that social security in this country had become so threadbare it simply would not have got us through the pandemic. Since 2010 there has been unprecedented growth in in-work poverty in the UK, and food banks have become the norm in every town and city. No constituency has been exempt from that, and, most of all, one in eight working people in the UK is currently living in poverty. So the Government should not be seeking to congratulate themselves on making this uplift during the pandemic; they should ask themselves why they let things get so bad to begin with.

There was another laughable moment in Question Time on Monday when the Secretary of State compared the Government’s response to that of the Labour Government after the global financial crisis. Back in 2008 there was a functioning and supportive welfare state: tax credits acted as a superb automatic stabiliser; Jobcentre Plus had already been created, bringing together the old social security offices with the jobcentres, which all Governments since have recognised as a huge strength; unemployment did not hit 3 million, as initially predicted; and initiatives such as the future jobs fund played their role. So that Government had already done the hard work back then, and that is the lesson this Government need to learn.

As many Members have said, great as the impact on families is, we also have a responsibility to consider the impact of this on the country as a whole. The money we are talking about is spent in local shops and on local services, the very businesses that have had such a tough time because of the necessary public health restrictions most of us here backed for good reasons.

The recovery is promising, but it is not a done deal and there is a lot of ground to make up. This is the wrong decision for the economy and it also fails to learn the lessons from the pandemic and build the resilience we need as a country to face future challenges.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I absolutely support everything my hon. Friend is saying in his speech, and the Government should listen hard, because we have all lived through a very difficult 18 months and there are increasingly difficult times ahead as well. We have learned many lessons during this period, such as that we should invest more in the things we value most. This money is targeted at families; 40% of families with children in my constituency will lose out as a result of this decision, and that will have an impact on those children. We have one of the most expensive childcare systems in the world and we know that working families are struggling. The Government can do something simple to support those families by changing their direction on this cut today.

[Jonathan Reynolds]

My hon. Friend is right. The lever the Government have to alleviate this basket of problems—childcare costs, fuel costs, food costs—is to not go ahead with this decision.

My hon. Friend’s intervention brings me to my next point. If it really is the Government’s ambition to level up the UK, it is hard to see how that can mean anything when this cut disproportionately affects the places the Government say they want to boost. Despite all the rhetoric, this cut will take £2.5 billon out of local economies in the north and the midlands, including Stoke-on-Trent which would lose over £32 million and Blackpool which would see £23 million cut.

We all know this money is not being invested or hidden away; it is being spent. It is being spent in shops and restaurants in local high streets that desperately need a boost after last year. After the last week, it seems that the Government are keener on taxes up than levelling up.

Universal Credit

Catherine McKinnell Excerpts

Tuesday 16th October 2018 Commons Chamber

[Alok Sharma]

I am pleased that the hon. Gentleman outlines some of our positive changes, which prove that “test and learn” works. I am sorry to disappoint him once again, but those are matters for the Chancellor and the Prime Minister, and we will hear more about the Budget at the appropriate time.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I secured a debate on universal credit 18 months ago to highlight the misery it had caused in Newcastle, as a pilot area. The misery continues: rent arrears in social housing have doubled; private landlords will not accept universal credit claimants; and the city council has spent £750,000 supporting vulnerable claimants. What is the point of a pilot if the Government continue to roll out the misery regardless?

[Alok Sharma]

On rent arrears, the hon. Lady may have seen the report produced by the National Federation of ALMOs—I believe it came out in July—which stated that, of their tenants moving on to universal credit, 76% were already in arrears. That was before they moved on to universal credit. We introduced changes with the extra £1.5 billion to help people moving from housing benefit with their cash flow, giving them a two-week run-on, which does not have to be repaid. It is possible under universal credit to have alternative payment arrangements with payments made directly to landlords.

Universal Credit Project Assessment Reviews

Catherine McKinnell Excerpts

Tuesday 5th December 2017 Commons Chamber

[Heidi Allen]

We have a job to do. I am sure the Select Committee’s evidence-gathering helped the Government to identify improvements and make universal credit better. We will continue that work.

No one should underestimate the poverty-fighting potential of universal credit. I believe that and mean that most sincerely. There is a reason why work coaches are so motivated by it. There is a reason why, when claimants are fully up and running on it, they move into work faster and stay in work for longer. That does happen. The old system of multiple individual benefits was no better than a game of roulette. What kind of reward was it when a determined claimant successfully gained more hours of work only to lose their benefits? On their way up, they were stopped in their tracks by a benefit trap set at an arbitrary and life-limiting 16 hours. No one should be proud of that and no one should want to sustain that.

Universal credit is totally different. It offers a wraparound support service to claimants. I am the first to admit that the roll-out has had more issues than it should have had. There are aspects of the system I wish had been fixed before we pushed the button to roll it out further. I understand, however, why the Government were reluctant to pause it. They were eager to offer that transformative support and its potential for a better future to more claimants. That is what the Government wish to do. I was pleased, therefore, when the Chancellor announced in the Budget a package of reforms worth £1.5 billion. Reducing the six-week wait, specifically asked for by the Work and Pensions Committee, was critical. I understand that banking system limitations meant that reducing the wait even further beyond five weeks was technically impossible, but the Prime Minister, the Secretary of State and the Minister for Employment listened to our concerns regarding the risk of rent arrears and debt, which were real, and then made further—I believe arguably greater—concessions than taking an additional one-week delay away. They increased availability and doubled to 100% the size of advance payments, so that emergency funds would be available to claimants on day one. The payback period was also doubled to 12 months. This means that no claimant will be without money if they need it. No ifs, no buts—fact. If someone needs an advance today, they get it.

The most welcome addition, for me at least, was the automatic additional payment of two more weeks of housing benefit for all claimants currently in receipt. That is huge! That is an additional two weeks of housing money on top of universal credit monthly payment. This is the good that the Government can do. These are the actions of the Government I envisaged when I first heard Theresa May on the steps of No. 10.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I thank the hon. Lady for giving way and for her compassion for the misery that I know many of my constituents have faced as universal credit has been rolled out in Newcastle. I have spoken about that many times, but does she share my concern that the announcements in the Budget will do nothing for those families who have already been pushed into misery, debt, the use of food banks and, potentially, the loss of their house? Does she want the Government to use that ability to support those families, too?

[Heidi Allen]

No family should be going through that. People have more difficult lives than I am blessed to have ever experienced, but work coaches are there, and discretionary housing payments and advance payments are there. Work coaches should be offering a wraparound service. I do not have universal credit yet in my area, but I hope that work coaches are doing everything they should for the hon. Lady’s constituents. There is no reason for a family to be put into that level of debt. If that is the case, the work coach is not doing what they should.

Universal Credit is the biggest transformation of our benefit system in decades. The Government’s slow roll-out and test and learn approach is the right one. They have been able to make amendments because of this approach, meaning the improvements announced in the Budget will be in place before a significant uplift in claimants moving on to the benefit. As we have heard today, that is so important because these are real people’s lives.

Jobcentres have received absolute clarity on making advance payments available to all claimants. I know this to be true, because I heard it first-hand recently at a regional work coach event in the east of England. I am greatly relieved by these operational improvements and relieved to know the Government will keep the taper rate under review. I understand the challenges to our public finances, but I remain of the opinion that universal credit will never be the ultimate poverty-fighting machine it can be and was designed to be until either the taper rate or work allowances are restored to their pre-2015 levels. As inflation shows signs of volatility, I support the Government completely as they keep a watchful eye on the taper rate.

If universal credit does not deliver the transformative results it should, we will look at it again. Universal credit is both revolution and evolution. The Work and Pensions Select Committee, on which I am proud to sit, will continue to monitor progress every step of the way. I thank the Government for offering to share these reports. They are project management assessment documents, not policy assessment documents, so their value might be limited—I do not know, we will see—but as a member of the Committee, I welcome the opportunity to review them. They will form part of the Committee’s ongoing and dedicated review of the project’s progress.

Universal Credit Roll-out

Catherine McKinnell Excerpts

Wednesday 18th October 2017 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

This debate is as vital as it is urgent, on something that has deeply affected my constituency and continues to do so. Since the full roll-out of universal credit across all three jobcentres in Newcastle in March this year, it has possibly doubled the work of my caseworkers and other local agencies. Since its introduction, it has been nothing short of a shambles. To roll it out any further, without dealing with some of its fundamental failures, will just roll out misery for thousands more people. It simply is not working, and in the short time I have I will set out as clearly as possible exactly why.

The deliberate delay in payments built into the system is fundamentally flawed. That does not even include the extra delay due to administrative errors. The Government’s figures show that one in five payments is not made on time. I am talking about the very deliberate six to seven-week wait for the first payment. Who, of those just-about-managing people the Prime Minister claims to want to help, could manage for seven weeks without any income? Who, in work, waits six or seven weeks for their first pay packet? The Government are not being straight with people. They are pushing people into spiralling debt and misery that they will take years to manage their way out of, if they ever do. The advance payments—otherwise known as crisis loans—do nothing to resolve that fundamental flaw.

What do the Government have to say about the rent arrears being accrued? Your Homes Newcastle, the arm’s-length management organisation responsible for Newcastle’s council housing, faces rent arrears of £1.2 million entirely as a result of the roll-out of universal credit, and it is not an outlier. Changing Lives, a supported housing provider in the north-east, states that 100% of its clients on universal credit are now in rent arrears. Is that really the Government’s intention?

Digital by default is proving to be disastrous. It assumes that everyone has easy internet access and is computer literate, which clearly is not the case for many people. Constituents are finding it difficult to make their daily updates, to verify their claims and to post activity on their web activity report, which is necessary to stop their claim being suspended—never mind getting hold of a human being to help when the system goes wrong.

Even when my constituents follow the correct procedures, documentation provided to the DWP at constituents’ cost is being lost or even destroyed. When constituents or my caseworkers contact the DWP to ask quite straightforward questions, the staff do not know the system themselves. How can constituents be expected to navigate the system when staff do not have the correct training and support to assist people who are having difficulties? Let me be clear: this is not the fault of the hard-working staff at jobcentres and the DWP; the blame lies fairly and squarely with the Government, who have their head buried in the sand.

I am pleased that my constituents will no longer be charged 55p per minute to access much needed support, but that change barely scratches the surface of the problems with the system. The crux of the issue is that the Government should be utilising the painful lessons learned by areas such as Newcastle, where the full roll-out of universal credit has been piloted, to ensure that the myriad problems that have arisen are rectified before they roll it out any further. It is causing real hardship and distress.

We are not asking for the system to be scrapped. We are asking for it to be paused, so that the Government can get this complex system right before they roll out further misery, debt and hardship up and down the land.

State Pension Age for Women

Catherine McKinnell Excerpts

Wednesday 5th July 2017 Westminster Hall

[Grahame Morris]

Yes, I do. I understand that any pension changes will always be difficult and contentious, but in this case there has been a clear injustice.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

My hon. Friend is right that there is an opportunity to put this injustice right. The Conservative manifesto said:

“We abhor social division, injustice, unfairness and inequality.”

The Government have an opportunity to put their money where their mouth is so far as the 1950s women are concerned.

[Grahame Morris]

That is absolutely true. It is widely accepted that many of those affected by the Pensions Act 1995 did not receive adequate notification. As such, they did not have enough time to plan for their retirement.

Universal Credit

Catherine McKinnell Excerpts

Wednesday 19th April 2017 Westminster Hall

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move,

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

It is a pleasure to serve under your chairmanship, Mr Davies, not least because I have been attempting to hold a debate on this issue for several weeks, if not months, because of the sheer volume of universal credit-related problems raised with me by constituents. I originally secured the debate for 22 March, but it was understandably cut short following the appalling attack on Westminster that afternoon, so I would like to take this opportunity to place on the record my eternal gratitude for the selfless and incredible bravery of PC Keith Palmer on that day. My thoughts very much remain with his family and with the families of those from around the world who were killed or injured as a result of that sickening incident.

Before I expose the myriad issues that my constituents have faced in dealing with this Government policy, and at the risk of repeating what I said on 22 March, I want to set out the context for this debate. As all hon. Members are aware, universal credit is a new benefit that is being introduced to replace means-tested social security benefits and tax credits for working-age individuals and families, including working tax credit, child tax credit, income-based jobseeker’s allowance, income support, income-related employment and support allowance, and housing benefit. According to the Government, the aim of universal credit, using real-time information on claimants’ circumstances, is

“to simplify and streamline the benefits system for claimants and administrators, to improve work incentives, to tackle poverty among low income families, and to reduce the scope for fraud and error.”

Following years of repeated delays and false starts, the infamous reset in 2013 after the Major Projects Authority told the Government to go back to the drawing board, and concerns expressed by the National Audit Office that delivery of universal credit had been beset by

“weak management, ineffective control and poor governance”,

the new benefit is finally, but very painfully, being rolled out across the country. As the Library briefing note helpfully produced for the debate highlights, since the 2013 reset, the Department for Work and Pensions has been developing and rolling out universal credit using a twin-track approach. The briefing note states:

“This involves rolling out Universal Credit using IT systems developed prior to the 2013 reset (the ‘Live Service’) while, simultaneously, DWP develops the Digital Service (now known as the ‘Full Service’) from which Universal Credit will eventually be operated”—

I hope everyone is still following me. That means that, since spring 2016, universal credit has been available in all jobcentres across the country, but in most areas it is available only for new claims from people with relatively simple circumstances—single unemployed people, or people with very low earnings, who satisfy the gateway conditions. In the small but increasing number of areas that have full service universal credit, all new eligible claimants will receive universal credit, as will existing claimants of legacy benefits who report a change in their circumstances that results in their being “naturally migrated” to universal credit.

Following the “reshaping” of the next phase of universal credit’s roll-out announced in a written statement on 20 July 2016, the Secretary of State confirmed that the DWP intended to continue the roll-out of full service universal credit to five jobcentres a month until June 2017 and expand that to 30 a month from July 2017. There will be a break over the summer of 2017. The Government hope to scale up full service roll-out to 55 jobcentres a month between October and December 2017 and accelerate that to 65 a month by February 2018, with roll-out to the final 57 being completed in September 2018.

As a consequence, under the Government’s current plans, universal credit should be available across the country to all new claimants and existing claimants with changed circumstances by September 2018, and the final stage of the roll-out of universal credit, the “managed migration” of existing benefit claimants with no change in their circumstances, will commence in July 2019 and be completed by March 2022—some five years later than the original target. Quite how that complicated timetable now fits alongside the DWP’s proposals, published in January, to close an estimated one in 10 jobcentres and merge or co-locate many others is something on which it would be helpful to receive confirmation from the Minister when he responds to the debate.

It is clear that the roll-out of universal credit is a hugely complex task and that hard-working jobcentre staff are being placed in an incredibly challenging situation. The Library briefing note states that it involves

“not simply the creation of a new benefit but development of entirely new administrative systems to support it. This includes development of the Digital Service, the online IT system via which claimants and DWP will manage awards, and training staff to administer a new conditionality and sanctions regime that imposes requirements on in-work as well as out-of-work claimants.”

As universal credit requires a broader span of people to look for work than is the case with legacy benefits—for example, by including those in receipt of housing benefit or child tax credits and, indeed, the partners of universal credit claimants—there has been a marked effect on the claimant count in areas that have full service universal credit. In the year to January 2017, there was a 25.5% increase in the claimant count in full service areas, compared with an increase of 0.1% across the UK as a whole.

There are numerous concerns about the impact of universal credit on existing claimants, particularly families with disabled children whose caring responsibilities prevent them from working. The charity Contact a Family estimates that those families could be up to £1,600 a year worse off after being transferred to universal credit. We also still have the disturbing two-child limit for the child element of universal credit for all families making a new claim, regardless of when their third child was born, and the totally unacceptable situation in which women will be forced to prove that any third child was born as a result of rape. Serious concerns remain about the cuts to work allowances introduced from April 2016 for universal credit claimants. The Children’s Society highlights that they mean that

“Universal Credit support for most working families was considerably reduced”.

The Government have pressed ahead with their potentially deeply damaging decision to remove entitlement to the housing benefit element of universal credit for 18 to 21-year-olds, subject to certain exemptions—a move that has been roundly condemned by homelessness charities including Centrepoint and Crisis. Meanwhile, organisations including the Federation of Small Businesses and the Low Incomes Tax Reform Group are pressing the Government to think again about the minimum income floor, given its potential impact on many genuinely self-employed people with incomes that fluctuate from month to month.

There is, of course, the fact that the change in the universal credit taper rate from 65% to 63%, as announced in the 2016 autumn statement, does not come close to outweighing the cuts to work allowances. The general secretary of the Union of Shop, Distributive and Allied Workers recently commented:

“The very modest reduction in the high clawback rate of 65% of net earnings to 63% is a tiny step in the right direction, but is worth less than £300 for most working parents. It goes nowhere near offsetting the enormous £2,000 to £3,000 annual cuts that Universal Credit represents or taking the taper back to the 55% rate that was originally intended. Universal Credit is a ticking time bomb that will plunge far more working families into poverty, when they are transferred on to it. We supported the initial intentions of Universal Credit, to simplify benefits and improve incentives to work. However, severe cost cutting has turned Universal Credit into a real threat to the incomes of low-paid working families.”

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I thank my hon. Friend and neighbour for securing this important debate and for ensuring that it took place today. She knows that I have raised the issue of the increase in housing debt for those on universal credit, and that in Newcastle the proportion of tenants in debt has increased greatly. The Minister said that that increase had not actually occurred; however, I have figures showing that the average debt for non-universal credit tenants in council housing is £300, whereas for universal credit tenants it is £636. Does my hon. Friend agree that that is a huge increase for working and non-working families?

[Catherine McKinnell]

I thank my hon. Friend and constituency neighbour for her insightful intervention, which highlights one of the major issues caused by the roll-out of universal credit when combined with the impact of the cuts agenda. This is a ticking time bomb and it is of particular concern to areas such as ours—Newcastle—given recent analysis by the TUC highlighting that while employment in the north-east grew by 60,000 between 2011 and 2016, a staggering 40,000 of those new jobs were without guaranteed hours or baseline employment rights. That means that some 124,000 people in our region—the equivalent of one in nine workers—now work in insecure jobs. Given that the north-east has the highest rate of insecure employment of anywhere in the UK, those people need a universal credit system that functions.

That leads me to the reason I have been trying to secure this debate. I want to focus on the actual experience of people in Newcastle upon Tyne North attempting to claim universal credit, in the hope that the Minister will acknowledge the clear failings in the system, do something to address the situation and commit to putting the failings right before universal credit is rolled out elsewhere.

To put this into context, the universal credit live service was rolled out to three jobcentres in Newcastle in April 2015, following which full service universal credit was introduced to Newcastle’s Cathedral Square city centre jobcentre in May 2016, the Newcastle East Jobcentre Plus in February 2017 and finally the Newcastle West Jobcentre Plus on 15 March. To return to the written ministerial statement of 20 July, the Secretary of State clearly said:

“It is essential that the Universal Credit rollout for all claimant types is delivered in an orderly and successful manner; that claimants receive the support they need in a timely fashion; and that welfare reforms are delivered safely as the roll out continues.”—[Official Report, 20 July 2016; Vol. 613, c. 23WS.]

I welcome that aim, but I have to tell the Minister that it simply is not happening in Newcastle. Indeed, it is fair to say that my office has been deluged with complaints from constituents about a universal credit system that is clearly struggling to cope and failing to deliver the support that claimants need in anything like an orderly or timely fashion.

Those concerns include a universal credit verification process that requires claimants to produce photographic identification such as a passport or driving licence, which many simply do not possess and certainly cannot afford, even though some have been in receipt of benefits for several years. Deciding that universal credit must be digital by default has also created significant difficulties for many, making it extremely difficult to obtain information about their claim from a human being. Constituents face long and expensive telephone queues, and when they do get through, they are told to report any concerns or queries via their online journal, following which they have to wait for increasingly long periods to receive a response. The fact that universal credit is centred on an online journal system assumes that all claimants have access to the internet or are computer literate. That is certainly not the case for many people across Newcastle, and it can make it very hard for people to verify updates on their claims or post information about their work activity, which is necessary to prevent their claims from being suspended.

I also have numerous examples of universal credit claims being shut down before they should be; of documentation being provided to the DWP, at the constituent’s cost, and repeatedly being lost or even destroyed; and of totally conflicting, often incorrect, information being provided to constituents about their claims. That is because of a clear lack of understanding about universal credit by the staff who are trying to administer it, and it also results in incorrect payments being made. Indeed, one of the cases I have been handling involves a constituent who received a £600 universal credit payment, while no one at the DWP is able to explain what it is for. There are significant inconsistencies in payment dates and amounts paid, even for people who work regular hours and have regular incomes, leading to overpayments of universal credit that the introduction of real-time information was supposed to prevent.

Claimants are waiting significantly longer than the commonly advertised six-week period to have their universal credit payments processed. That leads to many finding themselves in very serious financial difficulties as they wait for the DWP to get its act together—hardly surprising when all their benefits are rolled into one payment, which, if delayed, can make just about managing feel like an aspiration.

[Peter Grant (Glenrothes) (SNP)]

I am listening with considerable concern to the hon. Lady’s account of what the universal credit roll-out is doing to her constituents. My constituents are due to suffer the same fate in December 2017, which means that, with the six-week non-payment period, a lot of them will face the entire Christmas and new year period with no source of income at all. Does she agree that at the very least the roll-out should be suspended, and that the best result would be to follow the Scottish Government’s request to stop this process immediately, fix the problems and then continue with expanding it or rolling it out, if that is the right thing to do?

[Catherine McKinnell]

I take on board the hon. Gentleman’s serious concerns and, indeed, implore the Government to get this process right before they roll it out across the country.

There are also some fundamental flaws in the system. The fact that payments are made monthly and in arrears effectively embeds debt into the system—as landlords awaiting receipt of the housing benefit element of universal credit know all too well—and requires repeated applications for advance payments from DWP and/or budgeting skills, which many people sadly do not have. Indeed, the Joseph Rowntree Foundation recently commented:

“People risk debt, destitution and eviction while they wait…to receive their first UC payment”—

a description that surely belongs in the world of Charles Dickens, rather than in the modern, fit-for-purpose and efficient social welfare system that we should have in 21st-century Britain.

So what was the DWP’s initial response to the increasing number of complaints about universal credit claims? In a letter dated 20 January 2017 and addressed to

“Colleagues working in the welfare advice sector”,

MPs in full service universal credit areas were informed that they could not receive any information about a constituent’s case unless the constituent in question had provided online explicit consent directly to the DWP. The letter stated that such consent

“must be given freely, unambiguously and in an informed way. The claimant must be clear on the information that they want to be disclosed and who the information can be disclosed to…Consent does not last indefinitely, but covers a particular query or piece of business.”

Even when I had been sent an email by a constituent that provided me with all the details of their case and that specifically asked me to intervene on their behalf—usually because they had reached the end of their tether —that was not deemed sufficient proof for the DWP to provide me with information about the case. I am, of course, pleased that that ridiculous situation has now been reviewed, after complaints by many hon. Members and an intervention by the Leader of the House, but I must emphasise that it caused weeks of additional challenge for my constituents and for my caseworkers in Newcastle, who were deluged with universal credit cases but could not receive any sensible information about them.

The Minister need not take my word for the problems that people face in Newcastle. He can come and visit the Newcastle citizens advice bureau, for which the DWP’s explicit consent edict remains in place. He can hear about the 85 universal credit clients from Newcastle upon Tyne North alone that the bureau has supported in the last year, who have faced severely delayed payments and, in the bureau’s words,

“unnecessary hardship through no fault of their own”.

They face that hardship because of difficulties in finding or accessing a computer, failure of jobcentre staff to provide information about advance payments, incorrect information held on claimants’ records, incorrect advice being provided by jobcentre staff, and incorrect payments being made.

Alternatively, the Minister can come and meet staff from Your Homes Newcastle, the arm’s length management organisation responsible for managing Newcastle’s council housing stock, to discuss the significant level of support that they are having to provide to tenants through the universal credit process. Indeed, Your Homes Newcastle has highlighted that it and Newcastle City Council have so far provided support to 506 people,

“specifically to help those who may be unable to manage monthly payments or don’t understand UC and need explanations at the very start of their claims. The time taken to support customers in personal budgeting varies between 2 and 15 hours of support, although there are some exceptional cases where this can take considerably longer. The average time per case is currently 3.5 hours and this is carried out by staff co-located at Jobcentres. The cost of placing three staff in Newcastle Jobcentres to provide this service is £93,651 annually.”

That support is above and beyond the 25 minutes to two hours that it can take Your Homes Newcastle staff to assist tenants through the initial universal credit claim process. Some of the more complex cases can take significantly longer. Indeed, Your Homes Newcastle staff have highlighted the case of one tenant whose universal credit application has taken them approximately 100 hours to progress. Throughout that time, the woman has seen a significant decline in her health and wellbeing, as well as real financial hardship because of the severe delays and mistakes on the DWP’s part. If this represents a simplification and streamlining of the benefits system, I dread to think what a more complicated system would look like.

Of particular concern to Your Homes Newcastle is the significant impact on rent arrears of the roll-out of universal credit and the associated delays. I know that the Minister has repeatedly claimed—no doubt he will do so again this afternoon—that a large number of cases that enter universal credit have existing rent arrears. However, Your Homes Newcastle has made it clear to me that its current income collection rate is 93.9% of the rent due from tenants who are on universal credit, compared with 99.8% of the rent owed by other tenants. As a result, there was a reduced income collection of £220,000 for customers on universal credit at the end of the financial year. Your Homes Newcastle went on to state that tenants on universal credit owe a total of £784,000 in rent arrears, of which some £381,000—just under 50%—are solely as a result of universal credit. As Newcastle City Council has informed the Select Committee on Work and Pensions, of the 1,380 Your Homes Newcastle tenants claiming universal credit on 10 March, some 1,186—more than 85%—were in rent arrears. The average level of those rent arrears was £686, more than double the average of £300 for YHN tenants in rent arrears. Clearly the situation is completely unsustainable.

Housing-related concerns about universal credit are shared by the homelessness charity Crisis, which clearly states that, as it currently operates, universal credit

“is causing rent arrears, threats of eviction and homelessness for our clients”.

Meanwhile, the Residential Landlords Association has raised concerns that

“as it currently operates, Universal Credit is causing rent arrears problems for a considerable number of tenants. Changes are needed to provide tenants and landlords with greater confidence that rent can be paid on time and in full.”

All three organisations—Your Homes Newcastle, Crisis and the RLA—are pressing the Government to make alternative payment arrangements much easier to set up.

It is clear to me and to many other hon. Members that the roll-out of universal credit is having a significant detrimental impact on far too many of our constituents. These issues are not unique to Newcastle; they are being replicated across the country, as other parliamentary debates—including one recently secured by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—have made all too clear. Indeed, some of the concerns that I have highlighted this afternoon recently caused the Work and Pensions Committee to reopen its inquiry into the impact of universal credit. The Chair of the Committee, my right hon. Friend the Member for Birkenhead (Frank Field), commented:

“Despite a growing body of evidence about the very real hardship the rollout of Universal Credit is creating for some, often the most vulnerable, claimants—and the struggles it is creating for local authorities trying to fulfil their responsibilities—it is flabbergasting that the Government continues to keep its head in the sand.”

I agree.

On behalf of my constituents, of people in other areas in which universal credit has been fully rolled out, and of people in the rest of the country who will still have to endure this process, I strongly urge the Minister to take his head out of the sand and start addressing the very real issues that the roll-out of universal credit—the Government’s flagship policy—is causing. We must ask ourselves: how many times, from how many people and organisations across how many parts of the country must the Minister hear that universal credit is not working before he finally accepts that it is time to act?

[Geraint Davies (in the Chair)]

I will call the Front Benchers at 3.42 pm, half an hour before the end of the debate at 4.12 pm. I ask hon. Members to speak for between five and six minutes, so that everyone gets an equal share.

--- Later in debate ---

[Damian Hinds]

If the right hon. Gentleman will forgive me, I will not, or I will run out of time.

Let me assure the House that I recognise what a complex and important issue housing arrears are. Many different factors are at play. As colleagues know, UC pays housing costs directly to the claimants and they pay rent to their landlord. That mirrors the world of work, which is an important part of the fundamental culture change I mentioned. That of course has been the case for some time, since the Labour Government rolled out the local housing allowance in the private rented sector in April 2008.

[Catherine McKinnell]

Will the Minister give way?

[Damian Hinds]

I will give way to the hon. Lady, because it is her debate, but I am also conscious that I am running out of time and will not be able to cover everything.

[Catherine McKinnell]

The Minister made reference to housing payments mirroring the world of work, but I am aware of no workplace in which the employee is expected to wait six weeks or more for payment.

[Damian Hinds]

I am grateful to the hon. Lady for making the important point about the timing of payments to individuals. No one should wait more than 45 days for their first UC payments, unless they are exempt from waiting days, which the hon. Member for Strangford (Jim Shannon) mentioned. Various exemptions include those for prison leavers and for people coming across from other benefits, such as income-related JSA or ESA. For those exempt from the waiting days, the wait is no more than 38 days. A claimant who cannot wait that long, however, may apply for an advance of up to 50% of the total award to provide support through to the UC payment being made. That is an important facility, and we continue to work on raising awareness of its availability.

There have been some delays in the payment of the UC housing element, largely because of, for example, mismatches between what claimants tell us and what landlords tell us is the rent due. We continue to work on process improvements around that. The pre-existing system was itself far from perfect, and we believe the processing times for the UC housing element are about the same as those for local authorities paying housing benefit. According to research by the national organisation for ALMOs—arm’s length management organisations—three quarters of tenants on universal credit were already in arrears before coming on to UC. Nevertheless, we continue to address those issues and we recognise that further improvements can still be made. That includes a dedicated team to handle the processing of rental information for both claimants and landlords.

In Newcastle upon Tyne North, the claimant count has come down by 36% since 2010, but of course we have to continue to support more and more people into work as they fulfil their potential and ambitions. Colleagues will know that implicit consent has been restored to MPs. There are particular sensitivities and difficulties about the breadth with which implicit consent can be granted, given the depth of personal and sensitive information within universal credit to which the individual claimant holds the key, but claimants are able to give explicit consent to advice agencies and so on as appropriate.

I fear that I am out of time. I conclude by saying that we must continue to work together to resolve issues as they arise and ensure a successful roll-out. We are standing on the cusp of historic change in our welfare state—a dynamic and fundamental change that is already transforming lives for the better and will improve many more. This is welfare reform in action—changing the dynamics in the system, making things simpler and ensuring that work always pays, to the benefit of millions.

[Catherine McKinnell]

I am sorry to say that I am not reassured by the Minister’s response to the significant issues with the current system. We are not talking about the principles or the aims of universal credit; we are talking about the serious reality on the ground for people trying to access the support that they are entitled to. The Minister appears still to have his head in the sand. I hope that that is simply because he has not had time properly to address the issues that several hon. Members outlined and he will go away and look at them. These are not just glitches in the system. The consequences are disastrous for the individuals concerned. The Minister did not address the issue of embedding debt in the system and has not taken seriously the impact of the issues that people are experiencing. I am also not convinced about his commitment not to reduce jobcentre staff, given that two of the jobcentres in Newcastle are set to close. This debate will continue.

Motion lapsed (Standing Order No. 10(6)).

Personal Independence Payment: Regulations

Catherine McKinnell Excerpts

Wednesday 29th March 2017 Commons Chamber

[Debbie Abrahams]

I will come on to that in a moment, because I think Members have unfortunately been hoodwinked, and I will absolutely expose what the Government have said.

This move undermines and subverts not just our democracy, but independent tribunal judgments. It is unprecedented, and we should be concerned about future actions that the Government may take in relation to court cases that they lose. It is also highly unusual for such a fundamental change to be introduced by a statutory instrument under the negative procedure, bypassing debate and scrutiny in this House.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

It is clear to me, from the huge number of cases that I have dealt with, that the entire PIP system is fundamentally flawed. It results in the most appalling decisions and causes distress to thousands of disabled people and their families. Does my hon. Friend agree that there should be an independent review of how PIP assessments are carried out, given the obvious failings in the system?

[Debbie Abrahams]

My hon. Friend is absolutely right. There are long-term issues with the PIP assessment process as a whole. I will address that later. It is interesting that the Government let out yesterday that they will make an announcement, following a recent review, tomorrow, just as we rise for recess.

On Monday, the other place debated and passed a regret motion tabled by my noble Friend Baroness Sherlock, asking the Government to reconsider the regulations urgently, but the elected House of Commons has been denied that opportunity during the vital praying-against period. As I have said, that is very worrying behaviour by the Government.

The Minister for Disabled People, Health and Work claims that the changes restore PIP to its original policy intentions, but that does not hold water. During the PIP consultation in 2012, Ministers were quoted on numerous occasions saying that mental health conditions would be given parity with physical health conditions as part of the PIP assessment. For example, Esther McVey said that the PIP

“assessment is being designed to consider…physical, sensory, mental, intellectual and cognitive impairments.”—[Official Report, 26 November 2012; Vol. 554, c. 147W.]