Universal Credit Deductions

Claudia Webbe Excerpts

Wednesday 19th July 2023 Westminster Hall

[Claudia Webbe (Leicester East) (Ind)]

Thank you, Dame Maria, for allowing me to speak. It is a pleasure to serve under your chairship. I want to congratulate my friend, the hon. Member for Glasgow South West (Chris Stephens), on securing this very important debate.

The UK is a country shamed by the poverty of millions of its people, yet this Government sadly seem endlessly able to find ways to penalise and humiliate people for being poor. There are 14.5 million people in this country living in poverty, with many of them claiming universal credit, and in the middle of a cost of living crisis, the DWP is making deductions from a staggering 45% of claimants. My constituents in Leicester East face deductions significantly above the national average. As we have heard, around half of the deductions imposed on claimants are for advanced payments, which they are forced to request because the universal credit system is constructed to deprive claimants—already in need—of support for at least the first five weeks following their claim.

A survey by the TUC found that 86% of universal credit claimants had been put into financial difficultly because of the mandatory waiting period. Those are figures from 2020, before the current cost of living crisis. Financial difficulty has caused “immense misery”, resulting in

“many being forced into debt, relying on food banks or going without food. Many said it had impacted their mental health through stress and anxiety and that they had felt degraded by the process.”

Claimants in need are then forced to pay back advance payments at a rate of up to a quarter of the already meagre support that they receive through universal credit, prolonging and intensifying their hardship. I thank the hon. Member for Glasgow South West for tabling his important written question. In his answer, the Minister claimed that the payments are “not a debt”. The deduction at source from a paltry benefit—just £747 a month on average based on the figures provided by the Minister—certainly makes it look like a debt, handled in just the same way as debts to other bodies.

The Government appear to have decided to structure the benefit in that way with the help and for the convenience of the DWP, simply because they can, putting people into hardship. That is an act of class warfare and a clear abuse of power. Advance payment deductions amount to about half the total monthly deductions from universal credit payments, exposing the fundamental, structural unfairness and harshness of the universal credit system.

To make a bleak picture even worse, the data provided by the Minister in his 4 July response to the written question asked on 29 June 2023 by the hon. Member for Glasgow South West shows that the amounts deducted do not include sanctions under the draconian conditionality regime. In the same period as the one covered by the Minister’s response, the latest official statistics report that 6.18% of claimants were under sanction, with 44,000 new adverse sanction decisions in a single month and a year-on-year increase of 2.5%.

As well as the directly inflicted hardship of applied sanctions, just under a third of claimants are in conditionality regimes and under the threat of sanctions. The regime means that tens of thousands of people, already struggling, are facing unbearable hardship and the abject terror that they could suddenly become penniless. However, last year, the Government blocked the release of data from an academic study to find out whether such deductions were linked to ill health, poor mental health, suicide or attempted suicide, despite having previously promised to provide it.

The evils of the current system are clear and beyond any reasonable dispute. This is class war; it is neoliberalism writ large. The aim is to punish and control working-class families, targeting the most vulnerable through increased social and material losses. To coin the term of Friedrich Engels, it is actually “social murder”. Advance payments that have to be repaid—which are a debt, whether or not the Minister chooses to term them as such—must urgently be replaced for those in dire need and in destitution by a system of non-repayable grants, to alleviate at least some of the onerous burden that the Government have placed for too long on the shoulders of those least able to bear it.

--- Later in debate ---

[Claudia Webbe]

Will the Minister give way?

[Guy Opperman]

No, I will not; I am so sorry. I do not think I want to dignify the hon. Lady with any further comment in this debate.

The practical reality of the situation is that we believe very strongly that individual claimants have the ability to receive support. I could go on about various points in respect of advances and the five-week wait. During their first assessment period, a new claimant can receive a payment up to the expected amount of their UC award, which can then be repaid over 24 months. It is not possible to make a payment as soon as a claim is made, and colleagues should understand that. The assessment period must run its course before the award of UC can be calculated. It would not be possible to accurately determine what a claimant’s entitlement will be in the month ahead. The process ensures that claimants are paid their correct entitlement, which is something we all wish to see, and prevents significant overpayments from occurring.

I welcome today’s debate, and I understand and share the concern of the hon. Member for Glasgow South West that we should ensure that we support the most vulnerable in society. I want to finish on a couple of key points. Much criticism is made of the situation in respect of long-standing poverty, but it is a long-standing principle of the Government that the most effective and sustainable way to tackle poverty is by supporting people into work and to progress. In 2021-22, working-age adults living in families in which all adults were working were seven times less likely than working-age adults in workless families to be in absolute poverty after housing costs, and we have made progress. In 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than in 2009-10, including 400,000 fewer children, with 1 million fewer workless households than in 2010.

Support exists on an ongoing basis and, as I say, there has never been a larger sum spent on those who are most vulnerable. The cost of living support continues into 2024, and I commend the Government’s approach to these issues.