Universal Credit Split Payments

Danielle Rowley Excerpts

Wednesday 10th October 2018 Westminster Hall

[Danielle Rowley (Midlothian) (Lab)]

I beg to move,

That this House has considered universal credit split payments.

It is a pleasure to serve under your chairmanship, Mr Davies. Universal credit has been slammed by charities, experts, politicians from both sides of the House, and—most importantly—people living and suffering in the system. Just today, we heard from former Prime Minister Gordon Brown about the failures of universal credit and how it pushes more people into poverty, but today I want to focus on automatic split payments.

I firmly believe that it is a matter of human rights for all women—for all people—to be entitled to financial independence. The Equality and Human Rights Commission agrees, but the Government do not seem to. This year, I met the Employment Minister, the hon. Member for Reading West (Alok Sharma), to talk about universal credit. In that meeting, I asked him about automatic split payments, but I was told they were not going to happen. I was disappointed by that response, which is why I am glad to have secured today’s debate to raise the issue and add the voices of some of the people I have been speaking to. I hope that I will get some answers from the Minister and that he will take away some of the issues that I raise.

First, as I said, I believe that this is a human rights issue. When couples work, they do not get their wages paid into a single account, so why should welfare payments be any different? It seems like an oddly backward system. Under the current system, universal credit payments for a household are paid into a single bank account or joint account. Recipients of the joint award are required to nominate who receives that payment at the outset of the claim. For much of this debate, I will refer to women being able to have financial independence, but of course the policy will affect men too. The policy is not that the man automatically receives the payment; however, it will mainly affect women, which is why most of my comments will refer to women.

A report by the Scottish charity Engender pointed out that the policy

“does not account for the fact that financial decision-making takes place within the context of gendered power dynamics. The majority of jointly awarded ‘out of work’ benefits are claimed by men and assumptions that couples own, access and control joint banks accounts on an equal basis are unfounded.”

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on securing the debate. Universal credit was rolled out in my constituency in September, so it is fresh to us. My staff went on a reminder course to learn how to do it, and one of the key issues that has come up is the very issue that the hon. Lady has brought forward. We are new to universal credit, but split payments—especially in a home where one partner might have a mental health issue—are simply a must. Does the hon. Lady agree that rather than having to apply for a legal power of attorney, we need the Minister’s Department to apply discretion in allowing split payments to be part of the system? They have to be part of the system; if not, it is unfair.

--- Later in debate ---

[Danielle Rowley]

I thank the hon. Gentleman for his comments. That issue came up at a roundtable to discuss universal credit that I held in my constituency earlier this year. It brought together charities, local groups and service users to talk about their experience. In my constituency, full service universal credit has been rolled out since March 2017. At the roundtable, the need for automatic split payments was highlighted as a clear and prominent issue that has been impacting the lives of survivors of domestic abuse. Attendees of the roundtable, as well as respected organisations and groups, have stated that a single household payment has been shown to be highly problematic for a number of reasons, the first of which is that it perpetuates and contributes to inequality. Engender stated:

“Payment…to one partner in a couple is likely to result in less equal relationships, with one individual less able to access income.”

Again, this applies especially to women, as women are more likely to be economically dependent, to hold caring roles and to be subject to financial and other abuse.

That brings me to the heart of this issue, which is that single household payments facilitate economic abuse, where a person is deprived of financial independence. I pay tribute to the work of the Work and Pensions Committee on this issue. Evidence submitted by Scottish Women’s Aid and Engender to that Committee’s investigation into universal credit and domestic abuse stated:

“The single household payment is a gift to perpetrators of domestic abuse as it rapidly facilitates and legitimises what may previously have taken months or years of coercive control to achieve.”

That is disgraceful. It is shocking and deeply concerning that Government policy can be making it easier for abusers. What makes it worse is that single payments can then act as a barrier to survivors leaving abusive relationships.

[Louise Haigh (Sheffield, Heeley) (Lab)]

My hon. Friend is making such a powerful speech. For those who are watching this debate, and for Members with concerns on both sides of the House, it is baffling that the Government are continuing with a policy that will encourage further economic abuse and encourage victims of domestic abuse to stay with their partner. I congratulate my hon. Friend on securing such an important debate.

[Danielle Rowley]

My hon. Friend is absolutely right: being financially dependent can make it very difficult to leave a relationship, even just on the basic levels of affording transport and accommodation. A local case—one of the first cases I dealt with when I was elected—was that of a woman who was trying to leave an abusive partner. She had three children, one of them very young, and she came to me and said, “I don’t know what to do. My welfare payments are paid into my partner’s account, and I can’t leave. I’m now faced with a choice between staying, and subjecting not just myself but my children to this abuse, or leaving, making myself and my children homeless and unable to afford accommodation.” It cannot be Government policy to force people into that terrible position.

[Chris Stephens (Glasgow South West) (SNP)]

The hon. Lady is making an excellent speech. As someone who sits on the Work and Pensions Committee, know that the—evidence we received was shocking. Is the hon. Lady as disappointed as I am that the Select Committee’s eighth recommendation—that

“where claimants have dependent children, the entire UC payment should be made to the main carer by default”—

appears to be getting rejected in the Government’s response?

[Danielle Rowley]

I thank the hon. Gentleman for his intervention. I absolutely agree with him, and I will give some of my own thoughts on the Government’s response to that as well.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

My hon. Friend is making a powerful speech. I am sure the Minister will respond by saying that people can apply to have split payments, but Women’s Aid has said that this is not enough—that the Government are not, for example, monitoring how many people are applying and how many people are being refused. The record of what is being provided for in terms of alternative payments gives a very skewed and false picture, and we must have a default split payment soon.

[Danielle Rowley]

I absolutely agree.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Will the hon. Lady give way?

[Danielle Rowley]

I will make some progress, if that is okay.

As I said earlier, I met the Employment Minister and talked about this issue, and he assured me that one can request a split payment. He even boasted that the system is designed so that a person will not be informed that their partner has made a request for a split payment, but I imagine most people will notice if an amount of money is missing from their bank account when the payment comes in. That just shows that the policy has not been designed with any thought to those in abusive relationships, and that the Government do not understand what life may be like for someone in such a relationship.

[Dr Whitford]

The Women’s Aid survey showed that 85% of abuse survivors would not dare apply. That is why having it as the default is so important. Long before women reach the point of leaving a home, they have no money in their purse to go for coffee with friends or to go out with family, and they become isolated. Nobody is around them to offer a bed or advice. That is the start of it.

[Danielle Rowley]

I thank the hon. Lady for her comment. Absolutely—there is a whole host of reasons a woman might not be able to request it, and the Government seem unable to grasp that.

Under the system, survivors of domestic abuse are required to request split payments—a process that might put them at greater risk of further abuse, which is clearly preventing requests. Women, often accompanied to appointments by abusive partners, will fear repercussions when the abuser notices a change in the payment amount. The Department has said to the Select Committee that it recognises the risk that requesting split payments poses to those experiencing domestic abuse, but it has made no significant moves to rectify the problem.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

I thank my hon. Friend for the powerful speech she is making. Does she agree that the Government are being derelict in their duty to keep women safe if they put any hurdles in the way that could put women at greater risk? This is one such hurdle, and the Government must get rid of it.

[Danielle Rowley]

I absolutely agree, and I hope that the Government listen to that important point.

Although clearly detached from reality, it was somewhat unsurprising that, when I spoke to him, the Employment Minister believed that there was no problem with having to request split payments. That is because the Department has not been collecting the data needed to identify the issues surrounding domestic abuse and universal credit. It has only recently finally started publishing statistics on the number of households that request split payments, although it still does not require any information on why people request them.

When I asked for statistics on the number of people experiencing domestic abuse who are on universal credit, I was informed that that information is not available. Without the relevant data, the Department cannot ensure that people are effectively supported. The Work and Pensions Committee report states:

“the lack of data on split payment requests and abuse disclosure means there is no systematic way of understanding, identifying or disproving any relationship between financial abuse and UC.”

How can we help people when we do not have the data to work on?

The Government response to that report, which I believe is being published today, states support for the recommendation to prioritise gathering and publishing data on abuse and split payments, including the reasons for requests for split payments, so they seem to agree with it. Yet the Government also state later in the document that

“providing data on the reasons for split payments is not something the Department is currently considering as we need to consider sensitivities and protecting our claimants as a priority”.

That just sounds like an excuse for not collecting the data, as there are many ways of collecting it in an appropriate and sensitive manner that ensure that the claimant’s data is protected.

Of course, as a Scottish MP, I have to talk about the situation in Scotland. The case for automatic split payments is so compelling that earlier this year we won the argument on the need for split payments in Scotland. Thanks to the hard work of Scottish Labour, all parties, including the Scottish Conservatives, supported my colleague Mark Griffin’s amendment to the Social Security (Scotland) Act 2018, securing a change in the law. As such, the Scottish Government have committed to use their powers to split payments automatically. Given that the Scottish Tories supported automatic split payments in Holyrood, Conservative party policy appears to be confused. The Scottish Tories have seemingly failed to influence their party on this harmful policy. That is disappointing and weak, and it shows how little power they hold.

Looking at the practicalities, now that the Scottish Government have committed to automatic splitting of universal credit payments, the Department, which retains the practical responsibility to implement split payments through its automised digital payment system, must work with the Scottish Government, as well as relevant civil society organisations, to ensure that the decision is appropriately implemented. It needs to do that quickly and positively, scoping out and agreeing different forms of trial and of splitting the payment.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

My hon. Friend is making an incredibly powerful speech on the compelling case for split payments. As she says, the system being rolled out in Scotland defaults to split payments. If that infrastructure is available, surely it would make absolute economic and financial sense to scale it up to a UK level.

[Danielle Rowley]

I thank my hon. Friend for his point.

I welcome the Government’s support for the Select Committee’s recommendation that they view the introduction of split payments in Scotland as an opportunity to learn about carrying out such a system. However, there is very little detail in the Government’s response about how they plan to do so. There is no mention of carrying out the evaluation recommended by the Select Committee report. The Government’s response states that they will implement the policy on the Scottish Government’s behalf

“when it is feasible to do so”,

but sets out no detail of the current plans and timelines.

I would like the Minster to answer the following questions. What is the Department’s timetable? Have the Scottish Government proposed a possible split formula? Have they told the Department that they are preparing prospective regulations, and has it been consulted on them?

For the sake of women across the UK, the Government need to follow Scotland’s example and agree to adopt automatic split payments UK-wide. The recommendation is to view the introduction of split payments in Scotland as an opportunity to further consider whether, on the basis of evidence, there is a case for splitting payments by default in the rest of the UK. I suspect that, if such an evaluation is undertaken, the evidence in support of split payments will be, as it was in Scotland, overwhelming. However, it could be a lengthy process and, for many women, it would be just too long.

In the meantime, given figures released last month that showed that just 15 out of 880,000 households benefit from split payments—I was shocked when I heard that figure—what is the Department doing to better promote the option of split payments and to reduce the associated risks of opting for it? The Government have taken an important step recently, acknowledging economic abuse as significant by proposing to include it in a statutory definition of domestic abuse for the first time, but how does that fit with the wider Department’s policy on split payments, which supports economic and wider domestic abuse? Is the policy in contravention of the Government’s own position on domestic abuse? Can the Minister also please tell me, in the light of the draft Domestic Abuse Bill, what discussions have been had on split payments?

Automatic split payments will not prevent abuse altogether in households claiming universal credit. Some abusers will find a way to control their partners regardless, but automatic split payments are a significant step to ensuring that the state is not implementing a policy that plays into the hands of abusers, strengthening their hand and giving them more power than they already have over victims and survivors of domestic abuse.

Currently, universal credit is paid as a single household payment. It poses a risk to women’s financial independence, autonomy and security, and generally stands in the way of a person’s right to financial independence. The Department and the Government have a duty to ensure that they are providing the right support to survivors of abuse, and currently they are failing in that duty. The availability of the option of split payments is clearly not sufficient. To avoid supporting domestic abuse, split payments need to be a default—an automatic way to prevent abuse.