Statutory Sick Pay and Protection for Workers
Chi Onwurah Excerpts(4 years, 8 months ago)
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Margaret Greenwood
The hon. Lady makes a really excellent point, and I thank her for it. Many workers on low pay are unlikely to have savings to fall back on either. In a recent YouGov survey, 48% of workers said that they would not be able to cover their rent or mortgage and other living expenses if they had to take two weeks off work at the current statutory sick pay rates. The European Committee of Social Rights found in January 2018 that statutory sick pay and social protections for the unemployed, sick and self-employed people in the UK were “manifestly inadequate”.
A worker in the UK on the national minimum wage who has to self-isolate will receive less than a third of what they would in Germany and less than half of what they would in Sweden or the Netherlands. The level of statutory sick pay is also set lower than the national living wage, which the Government said in the Budget that they want to increase. Will the Government therefore raise statutory sick pay to at least the level of the real living wage so that people are not pushed into poverty by doing the right thing?
The Government’s approach has been to say that people on low income who are not eligible for statutory sick pay can claim universal credit or new-style ESA. That is not the answer. Universal credit acts as a vehicle for cuts and the level of support is simply too low.
The four-year benefits freeze will only come to an end in April, and, as a result, families living in poverty have been left £560 a year worse off on average, so will the Government raise the level of social security payments in order to build resilience in people facing the virus? The five-week wait for the payment of universal credit means that there will remain a risk that people will go on working when unwell. The Government say that people can request an advance, but advances are loans that have to be paid back, often on top of other debts built up during that period, so will the Government commit to ending the five-week wait, and will they change their loan into a non-repayable advance?
The truth is that people often have to rely on food banks to survive as well as on advances during the first five weeks, and often after that, as deductions are made from the universal credit when it finally does arrive. However, there are reports that panic buying by the public is leading to food banks running short. People using food banks cannot afford to stock up and so are disadvantaged still further.
The Government should be taking measures to protect people in poverty in the current situation. Will the Government immediately suspend deductions from social security for anyone who becomes ill or is forced to self-isolate, and consider suspending them for all other claimants? Will the Government suspend work search requirements for anyone directly affected by the virus, and will the Government suspend all sanctions?
In the Budget, the Chancellor also suggested that some people who become ill but do not qualify for statutory sick pay could claim new-style ESA. That is £73.10 a week, even lower than statutory sick pay. Someone who is ill as a result of the coronavirus or for any other reason should not also be pushed into poverty and left worrying about how they will cope financially, so will the Government raise the level of new-style ESA payments? Even to get that, someone has to have built a contribution record over the past two years, which people in insecure work in particular may find difficult to do.
The Government announced that they were temporarily suspending face-to-face assessments for sickness and disability benefits. That is welcome as far as it goes, and Opposition Members have been highlighting the major problems with how assessments are carried out for a long time, but the Government have said that this approach would be replaced by telephone or paper-based assessments. That could risk increasing pressure on GPs at a time when they are already overrun, so can the Government tell us clearly how assessments will be carried out during the outbreak?
Media reporting of the virus highlighted that the most at risk had underlying health conditions, so what is the Government’s response to Mind’s call for all reassessments to be suspended to give people security of income at this time? What action will the Secretary of State take to protect people who care for a loved one who was already ill or disabled before the crisis began? Neither person may be directly affected by the virus, but attending a jobcentre could leave the carer at greater risk of contracting the virus.
The truth is that social security changes aimed solely at people who are self-isolating or ill will not be enough. Other people will be affected by the crisis. The Government have said that they will suspend the minimum income floor in universal credit for self-employed people directly affected. Will they also suspend the minimum income floor for all workers, given that many will be affected as a result of the crisis and the impact on the economy?
The demands on the DWP will be considerable, and its own staff may be forced to self-isolate or take time off because of illness as a result of the outbreak. What will the Government do to ensure that the service can continue? We are calling on them to do all that they can to introduce a form of robust, generous and comprehensive income protection for those whose hours may be cut or who may be asked to take unpaid leave because of the impact of the crisis. In some cases that will be because of a fall in the number of customers, but if schools have to close at some point, there will also be parents who are not ill and do not have to self-isolate, but who are unable to go on working, at least full-time. The Danish Government have just announced a scheme that would involve their paying 75% of people’s wages in those circumstances, and businesses paying the remaining 25%. A similar scheme successfully limited redundancies in Germany during the financial crisis.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
My hon. Friend is making some excellent comments. I understand that a major international fast food chain has told its employees that if a branch has to close because of infection, business being quiet or Government action, the employees will receive only statutory sick pay, and those on zero-hours contracts will get nothing. Does my hon. Friend agree that that will make it harder for employees to do the right thing, and that it constitutes exploitative behaviour on the part of the employers which must be condemned and stopped?
Justin Tomlinson
I absolutely understand the point that the hon. Member makes. These are extraordinary times, and collectively we are all trying to identify the right levels of support as quickly as possible. In pure cash terms, the fiscal support that we have already provided at this stage of the curve is almost the highest around the world, but this is not complete. As events progress, we have to do more and we can expect more announcements. I understand that in an ideal world we could announce everything straight away, but we have to make sure that it is right, we have to react as things come forward, and we have to communicate as quickly and clearly as possible. We do understand that.
Justin Tomlinson
Let me make a little progress, because I think I am about to cover some of the things being asked about. I promise that I will take more interventions.
Extraordinary times call for extraordinary measures, which is why we have extended statutory sick pay to those who are self-isolating in line with the latest Government health guidance. The guidance is available online on gov.uk and ensures that eligible individuals, whether they are sick or self-isolating, will be entitled to statutory sick pay if they are unable to work because they are following Government advice.
The upcoming emergency Bill will mean that for people affected by coronavirus, statutory sick pay will be payable from day one, instead of day four, and currently it will be backdated to 13 March. We removed those waiting days to get support to people as quickly as possible. These are crucial measures to ensure that employees do not attend work when they should stay at home to help to keep themselves and others safe. The circumstances are exceptional and we urge employers to do the right thing, use their discretion and respect the medical need to self-isolate.
Statutory sick pay is a legal minimum, and employers can offer more. Where possible, employers should support their employees to work from home to help to slow the spread of the virus. If employers do feel the need to require evidence, people who are advised to self-isolate for coronavirus will soon be able to obtain an alternative to the fit note by contacting NHS 111 rather than visiting a doctor. We are all aware of the need to protect GP surgeries so that they can concentrate on key areas of work.
Accordingly, the Government will ensure that businesses are supported to deal with the temporary economic impact of the outbreak of coronavirus. Small and medium-sized enterprises are at the heart of our economy, symbolising the hard work and enterprising spirit of our nation. To support such employers with the increased costs of sick pay, the emergency Bill will provide that employers with fewer than 250 employees can reclaim up to two weeks’ statutory sick pay for sickness absences related to coronavirus. That includes those who are required to self-isolate in line with Government guidance. The measure could provide more than £2 billion of support for up to 2 million businesses, and will be crucial to ensure that our economy keeps running.
The measure on statutory sick pay is in addition to others to support businesses that were outlined by the Chancellor yesterday: £330 billion of Government-backed and guaranteed loans; additional cash grants of up to £25,000 for businesses in the retail, hospitality and leisure sectors with a rateable value of less than £51,000; and cash grants of £10,000 to 700,000 of our smaller businesses. The Government will do whatever it takes to support our economy.
Of course, not everyone is eligible for statutory sick pay, which is paid by employers. Gig workers and those on zero-hours contracts may be entitled to sick pay, and should check with their employer, but millions of hard-working people who are self-employed or in the gig economy will need our help, too. That is why we are making it easier to access benefits during this period.
The shadow Secretary of State talked about disability benefits and the announcement that we made earlier this week. The first decision was to remove face-to-face assessments, because we recognise that a significant proportion of those who could be claiming disability benefits are vulnerable. We want to avoid them needing to travel unnecessarily and to sit in busy waiting rooms, so we decided to stop face-to-face assessments. However, we do not want to stop new people gaining access to the support that they are entitled to, so we are seeking to continue to do paper-based and telephone reviews, but prioritising those who are new claimants, and looking at the workforce on a daily basis.
Justin Tomlinson
I absolutely understand that point, and the right hon. Member and I discussed it when we first made the announcement. The absolute priority has to be new claimants who are seeking to get support through the disability benefit system, so we are looking on a daily basis at what we can do. I do not envisage that we will be able to do much beyond that, but I want to make sure that new claimants can get support. That was why, at the beginning of my speech, I paid tribute to the fantastic work of those who are working on the frontline, who—like all people—are anxious about events, but are still, when they can, coming in to make sure that the vulnerable people in society can access the support that they are entitled to.
Chi Onwurah
I thank the Secretary of State for giving way. He talks about statutory sick pay as part of the safety net. As such, he recognises that, as a safety net, it is a benefit of last resort, and he talks about the way in which companies can offer more. Does he therefore recognise that in this unprecedented situation, when so many people are likely to find themselves—either by choosing to self-isolate or being obliged to—in the position of claiming statutory sick pay, the level is not appropriate to drive the right behaviours or support people? It is no longer a question of last resort, but of supporting significant proportions of our population, so sick pay needs to be at a higher level.
Justin Tomlinson
I am not the Secretary of State—it is very kind of the hon. Member to elevate me to such a lofty position, but that does not apply. The broader point is that the Chancellor has made it very clear that we will continue, on a daily basis, to look at what additional support there can be. The Government will do what we need to do to protect the vulnerable in society and keep our economy going. Many Members will raise very important points in the debate but, as a broad principle, the safety net is wider welfare support, looking at an individual’s personal circumstances, and tailoring the level of support to them so that we can target help to the most vulnerable in society.
Those not eligible for sick pay, including the self-employed, are able to make a claim for universal credit or contributory employment and support allowance. Last week, we laid regulations to ensure that the contributory ESA is now payable from day one, removing the seven-day waiting period for people who are self-isolating on Government guidance or who are ill with coronavirus. Claims can also be made over the phone without the need for people to contact their doctor for a fit note. Those in self-isolation or sick with coronavirus who make a claim for universal credit can receive up to a month’s advance up front without physically attending a jobcentre. Everything can be done by phone or online, and that is a welcome position.
Oral Answers to Questions
Chi Onwurah Excerpts(4 years, 10 months ago)
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Dr Coffey
I suggest that the hon. Lady lets the Minister for Disabled People, Health and Work, my hon. Friend the Member for North Swindon (Justin Tomlinson), know directly about her constituent’s particular circumstances so that he can follow up on that individually. I know that he believed that he had let hon. Members know about this matter. We take the issue seriously, and we will check after Question Time what happened regarding the communication.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Greggs in Newcastle has, as we know, given its workers a £300 bonus to share in its success as a company. Does the Secretary of State agree that that is the right thing for employers to do? Does she see why so many of the employees who are on universal credit will lose so much of that bonus because it is treated as a monthly income rather than an annual income, which is what it is?
Will Quince
It is a one-off payment, so, in effect, it is treated as income as it would be for tax purposes. Over the course of a year it would of course balance out. It is important to stress that under the legacy benefits system it would have attracted a marginal tax rate of 91% maximum as opposed to only 75% under universal credit.
Oral Answers to Questions
Chi Onwurah Excerpts(5 years, 1 month ago)
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Justin Tomlinson
We work all year round with claimants, stakeholders and charities—organisations with real-life experience—to help to improve not only the training but the understanding of all areas of disability and health conditions. We back that with genuine financial support. The Government now spend £55 billion a year, 2.5% of all Government spending and 6% of GDP—a record high, at £9 billion in real terms, to support people with disabilities.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
It is a priority for this Government to provide swift access to support those who need it, while protecting those same people from potentially fraudulent behaviour. If a claimant does not have the documentary evidence we need, we can verify by using: biographical tests and checks, and information held on the Department’s systems; confirmation of third-party organisations; and two members of jobcentre staff knowing and recognising the claimant as part of their work.
Chi Onwurah
This is not what is happening in practice. Constituents are coming to me who have had their claims denied or who have just been turned away and told, “Go and find the documentation.” Newcastle citizens advice bureau also reflects that. Will the Minister guarantee that no vulnerable claimant will be turned away because of not having the right documentation? Will she write to me with the number of those who have had their claims denied because of a lack of documentation, so we can see the size of the problem?
Mims Davies
I thank the hon. Lady for her question. I know she is passionate about her constituency. It is absolutely right that there is a balance, but to get a universal credit claim right we need to ensure we verify the identities of all vulnerable people. We heard earlier about the challenge if a claim is made fraudulently. We must be able to understand when there is a particular need to intervene. As we heard earlier, home visits are possible in relation to Help to Claim. If she would like to give me the details, I am very happy to look into this matter further.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
State Pension Age: Women
Chi Onwurah Excerpts(5 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I congratulate the hon. Member for Gower (Tonia Antoniazzi) on securing the debate. It is an opportunity for me to address some of the points that she raised, as far as I can, given that a judicial review is ongoing. There are obviously a number of key drivers behind the decision to make these changes by successive Governments, dating back well over 25 years. It is important to briefly restate them before I turn to her points.
This change was part of a wider trend towards gender equality. The decision was taken partly as a result of European and equality legal cases in the early 1990s relating to occupational pension provision. Life expectancy and state spending were also key factors in the changes to state pension age. Following the passing of the Pensions Act 1995, the actual and projected growth in the pensioner population continued faster than anticipated as a result of increasing longevity. As a result, it was clear that a state pension age fixed at 65 was no longer affordable, fair or sustainable.
The Labour Government between 1997 and 2010, and the hon. Lady’s predecessor who was the Member of Parliament at the time, took action in the form of the Pensions Act 2007, which introduced an increase in state pension age to 66, 67 and 68 for men and women. Further changes were brought in under the Pensions Act 2011, which accelerated the equalisation of women’s state pension age and brought forward the increase in men and women’s state pension age to 66 to complete by 2020.
The Pensions Act 2014 brought forward by eight years the increase in state pension age to 67 to complete by 2028, and introduced regular, independent reviews of the state pension age—the first of which was published by John Cridland in 2017—to ensure that the system remains fair, sustainable and affordable for taxpayers. It cannot be overstated how much life expectancy was one of the key drivers of the decisions of the Labour Government between 1997 and 2010, the coalition Government between 2010 and 2015, and the Conservative Government since then.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I thank the Minister for giving way. I recognise the point he is making with regard to the equalisation of pensions between genders and increasing life expectancy, and we are all grateful to be living longer. But does he recognise that these mainly working-class women did manual and physically oppressive work, often starting at the age of 15, and they are not sharing in the benefits of longer life expectancy because of health inequalities? Does he recognise that inherent unfairness?
Guy Opperman
There are a number of points to be made, and I will try to address them. There are two key issues to look at: life expectancy as a nation, as assessed by the Office for National Statistics or reviewed independently by John Cridland, and healthy life expectancy. In terms of general life expectancy, after the second world war, a girl born was expected to live to 81 years and a boy to 77 years. By 2019, those figures had increased by more than 10 years for newly born girls and by more than 12 years for boys, to 92 and 89 years respectively. The hon. Lady made a point about healthy life expectancy.
Guy Opperman
I accept those points. That was specifically reviewed by John Cridland on an independent basis, as ordered by Parliament, in 2017. His report, a copy of which is in the Library, addresses those points.
I will make a couple of points on Cridland’s report before I come to the issue of period life expectancy. Cridland sets out the figures on the first page of his report. In 1917 only 24 people reached their 100th birthday. In 2016 6,000 did. The expectation is that by 2015 56,000 people will reach this milestone. He estimates that by approximately 2047 life expectancy could be 98 for women and 95 for men. Given that when the state pension was introduced in 1908 it had a retirement age of 70, only one in four people were expected to reach that age and life expectancy thereafter was nine years, there has been a dramatic improvement in life expectancy.
Oral Answers to Questions
Chi Onwurah Excerpts(6 years, 8 months ago)
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Ms McVey
My hon. Friend is correct, and I want to thank him for going to meet people at his Jobcentre Plus and for speaking to the dedicated work coaches who are working tirelessly to help people to get into work. These are the tales that I am hearing. Universal credit is an in-work and out-of-work benefit. We are about getting people into a job and then helping them with progression, so that they can get into a job and have a career and also have job progression. That is why we have over 3 million more people in work.
Mr Speaker
This question is not dissimilar to that tabled by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), and she should have her opportunity now, because we will probably not reach her question later.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Ms McVey
We have had this debate before, and this has been corrected many times. Actually, 50,000 more children are going to have free school meals. These scaremongering stories are not true at all. Let us look at what is happening. We now have 1 million fewer people in absolute poverty—a record low. We now have 300,000 fewer children in absolute poverty—a new record low. There are also 500,000 fewer working-age adults in absolute poverty—a record low. This Government are about helping people to get into work, which is the first step they can take towards taking control of their life. From there, they can have career progression.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Kit Malthouse
The hon. Lady raises what sounds like quite a complicated case in terms of entitlement. If she would like, I am more than happy to arrange for a meeting in the Department to make sure that her constituent is getting the help and support that she needs.
Personal Independence Payment
Chi Onwurah Excerpts(6 years, 10 months ago)
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Ms McVey
As I said to my hon. Friend the Member for Cheadle (Mary Robinson), this is about tailor-made and flexible support. We are putting in place more training so that people understand mental health conditions, and we are giving our work coaches and mental health assistants as much support as possible. As I say, this is about tailor-made and flexible support.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State talks about the unnecessary vilification of her policies, but her Government were responsible for the vilification of so many mentally disabled people by presenting them as applying for benefits to which they were not entitled. I have seen the misery that such decisions caused many of my constituents, including those suffering from post-traumatic stress disorder as a consequence of sexual abuse. Will the Secretary of State now confirm the maximum amount of time that they will have to wait to have their cases reviewed?
Ms McVey
It is unfortunate when Opposition Members try to ratchet up the level of emotion in the Chamber, especially when the situation is as emotional as it is. Nobody has ever sought to vilify anyone, and we should get it on the record now that this is not about vilifying anybody—it is about the giving the right support to those who need it. Surely all of us want to focus resources and money on the most disabled people and on the disabled people who need that money. I hope that I can end on that note. The facts speak for themselves: we have spent more than Labour ever did.
Universal Credit Roll-out
Chi Onwurah Excerpts(7 years, 1 month ago)
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Debbie Abrahams
There may be many and varied reasons why the claimant count is down, not least the system of punitive sanctions the Government also introduced in 2012.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Newcastle was also a pathfinder constituency. As the local MP, I have seen at first hand the absolute misery and destitution that this system has forced many of my constituents into. Our Newcastle food bank was already the largest in the country, and now it regularly runs out of food as a direct consequence of this system. Does my hon. Friend agree that the Prime Minister’s attitude at questions earlier today showed a total lack of understanding of the impact and of the destitution and suffering of so many of her citizens?
Debbie Abrahams
This is a real test for the Government; if there is a genuine desire to make life better for everybody across the country, UC is a key way in which we can respond. I am so sorry to hear about the issues in Newcastle as a consequence of the introduction of UC.
Universal Credit
Chi Onwurah Excerpts(7 years, 7 months ago)
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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.
Oral Answers to Questions
Chi Onwurah Excerpts(7 years, 8 months ago)
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Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State for Work and Pensions (Damian Green)
I would like to draw the attention of the House to the more generous universal credit taper rate coming into effect over the Easter recess, on 10 April. It demonstrates our commitment to helping people to gain independence in their own lives by getting on and progressing in work. The new taper rate of 63% will boost the incomes of about 3 million families by £700 million a year; a couple with two children could benefit by as much as £425 a year. When combined with the introduction of the national living wage and increases in the personal tax allowance, those changes equate to the biggest pay rise for the lowest earners in a generation.
Chi Onwurah
Newcastle has paid a high price for being the first city to go full service with universal credit, with claims routinely lost, delayed or repeatedly deleted. However, the six-week wait period is doing the most to drive so many into destitution and cause people to lose their home. With 80% of Newcastle council house tenants on universal credit now in rent arrears, will the Minister end the wait period, or will he explain how they are supposed to keep a roof over their head with no money?
Damian Green
I have two points for the hon. Lady. First, the National Federation of ALMOs—social housing providers—calculates that some 75% of tenants are in arrears under the legacy benefits, so she is not right in her suggestion.
Oral Answers to Questions
Chi Onwurah Excerpts(7 years, 9 months ago)
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Damian Green
I am happy to join my hon. Friend in welcoming the work of the Dorset Young Chamber. I have seen the great work that my local chamber of commerce, Kent Invicta, does in schools. My hon. Friend chairs the all-party parliamentary group for youth employment, so he will be pleased to know that the youth claimant count in his constituency has gone down by 74% since 2010 and by 7% in the past year alone.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
More young people are claiming benefits in Newcastle Central this year than they were last year, and the north-east has the overall highest unemployment rate in the country. Too many of our young people have to leave the region to find good jobs, so when will the Secretary of State make the northern powerhouse a reality for the north-east?
Damian Green
We are determined to make the northern powerhouse a reality. As the hon. Lady says, youth unemployment is higher in certain areas than it is in others, but I hope she recognises that youth unemployment as a whole has come down markedly in recent years in her region, as in all others. Some 86% of 16 to 24-year-olds are now in full-time study or work, which is a record high, and the employment rate for 16 to 24-year-olds who have left full-time education is up by 0.4 percentage points in the past year.