Universal Credit Roll-out

Debbie Abrahams Excerpts

Tuesday 24th October 2017 Commons Chamber

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

I beg to move,

That this House has considered the Government’s response to the decision of the House on pausing the Universal Credit full service roll-out.

Once again, Mr Speaker, I thank you for granting this emergency debate, which is so important to the people we represent. It is very important that we have this opportunity to return to the roll-out of universal credit, following last week’s Opposition day debate. Just to refresh everyone’s memory, the motion calling for a pause to the programme was unanimously approved by 299 votes to zero. Since then, we have heard nothing from the Government about what they intend to do, in response to the concerns raised last week, to fix universal credit. I always welcome the Minister for Employment to his place, but why is the Secretary of State not here to answer? Obviously I understand that emergencies do happen, but I did not get a satisfactory response from his office when I rang earlier, and apparently Downing Street is none the wiser either.

The press has reported that the Government are considering reducing the six-week wait for the first payment after making a claim. Will the Minister confirm whether that is correct and, if so, when will it happen? Will he also explain why his Government deem it acceptable to brief the media but not to make a statement to this House? Does he recognise the constitutional implications of his Government’s inaction to date?

[Chris Bryant (Rhondda) (Lab)]

Did my hon. Friend notice that virtually every Conservative, or Conservative representative of the Government, who spoke on this matter over the weekend seemed to suggest that the problems with universal credit were to do not with the policy but just its implementation? However, the six-week delay is actually a policy decision that was in place from the very beginning, and that is what is causing the poverty and the problems.

[Debbie Abrahams]

My hon. Friend is absolutely right. To be fair, some Conservative Members, and indeed a Conservative Assembly Member, have recognised the real problems with the structural design of universal credit, even saying that it is “indefensible”.

As it stands, there is overwhelming evidence of the harmful impacts of universal credit, including rising debt, rent arrears and even evictions. The Government must take action or face serious constitutional questions. They have had three sitting days to respond to the legislature but have failed to do so, keeping this House and the country waiting, along with the 7 million people who are expected to be using this programme.

[Ruth George (High Peak) (Lab)]

The Government’s figures indicate that 90,000 families will be transitioned on to universal credit full service over the next 90 days. Does my hon. Friend therefore agree that while the Government delay making a decision, about 1,000 more families each day, on average, will have to wait six weeks and get further into debt?

[Debbie Abrahams]

My hon. Friend is absolutely right, and that is why this debate is so urgent—we cannot wait. Although, yes, this is still a small proportion of the full number of people who will have universal credit rolled out to them, this amounts to a 63% increase in the number of people who will be on full service over the next six months.

[Lucy Frazer (South East Cambridgeshire) (Con)]

Does the hon. Lady accept that 50% of people who have received universal credit have actually received it early and applied for an advance payment?

[Hon. Members]

It is a loan!

[Debbie Abrahams]

As my hon. Friends are saying, it is a loan. I will return to that, but I want to make that important point.

[Simon Hoare (North Dorset) (Con)]

The hon. Lady nailed it in a remark that she made a moment or so ago. There have been just three sitting days since the Opposition day debate. Were we to presuppose that Her Majesty’s Government would seek to respond to that debate—let us not presume that—would it be fair, in all honesty, to expect them to do so within three sitting days?

[Debbie Abrahams]

I will come on to that in a moment. The precedent was, unfortunately, set by the current Government.

As I said, the Government have had three sitting days to respond to the legislature. It might be useful to quote the right hon. Member for Ashford (Damian Green), who is now First Secretary of State. At the last such defeat for a Government, in 2009, he raised an immediate point of order, in which he asked the then Deputy Speaker:

“In the wake of that devastating vote for the Government, have you had any indication that Ministers intend to come to the House and make an immediate statement about how they propose to change their policy, as the House has now spoken clearly?”—[Official Report, 29 April 2009; Vol. 491, c. 931.]

Within three and a half hours, the then Government made a statement.

The right hon. Gentleman had changed his tune a bit by last Thursday, when he said that all

“governments have to abide by the rules of parliament. We’re a parliamentary democracy,”

but that

“as the Speaker said last night, motions like that are non-binding motions, so they don’t engage government activity particularly.”

He cannot have it both ways.

These events have raised a more fundamental constitutional question, given reports that the Government no longer intend to require Conservative Members to vote against Opposition day motions.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Lady said earlier that the up-front payment is, in her words, a loan. If it was not a loan, it would increase the overall quantum of benefit paid to recipients. Is that what she is proposing?

[Debbie Abrahams]

I will say exactly what I am proposing very shortly.

If the Government’s position is that Opposition day debate motions should have no binding effect on the actions of the Government, it fundamentally alters the relationship and balance of power between the Executive and Parliament. It would mean that apart from votes on legislation and matters of confidence, the Government could ignore the decisions and will of Parliament. This is very dangerous ground, and the situation needs to be seen in the context of the blatant power grab by the Executive that we witnessed on Second Reading of the European Union (Withdrawal) Bill last month.

[Jeremy Quin (Horsham) (Con)]

For the hon. Lady to accuse the Government in such a way is to suggest that there has been a change from precedent, but votes on Supply days have never been binding on the Government. That is a clear precedent going back many years, and the position was entrenched by the Fixed-term Parliaments Act 2011.

[Debbie Abrahams]

The point is that we need an urgent response to this really important issue. We are calling for a clear set of proposals from the Government that will reflect the will of the House and pause universal credit roll-out while the issues that I raised—and many more that I did not have time to raise—are fixed.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I thank my hon. Friend for securing this debate. Is she as surprised as I am by Conservative Members’ denial of the seriousness of these issues? Their comments will give no succour to my constituents, such as the mother of three who is currently sleeping on her cousin’s floor after she was evicted from her home because of non-payment of rent that resulted from delays in universal credit. This is not about the Opposition versus the Government; it is about real people—our constituents—suffering.

[Debbie Abrahams]

My hon. Friend raises an important case. It is absolutely shocking that in 2017, in the fifth richest economy in the world, such cases are brought to our surgeries day in, day out. Things are only going to get worse, and that is absolutely unacceptable.

[Heidi Allen (South Cambridgeshire) (Con)]

The moment for pausing universal credit—this is determined by statutory instrument, as the hon. Lady knows—has passed, but there will be another opportunity to do so in January, when another one-month pause is built into the system. If we could find a compromise with the Government and make significant changes to the policy, such as reducing the six-week wait to four weeks, would that be acceptable to the Opposition?

[Debbie Abrahams]

Something needs to happen urgently. As the hon. Lady knows, full service is being rolled out to 55 areas this month. The cold months are upon us, and Christmas is just around the corner. We need an urgent response now.

[Mr Jim Cunningham (Coventry South) (Lab)]

A number of cases have been brought to me. Last Christmas, one constituent waited for two months without any money to get redress. On the constitutional question, democracy can only work if everybody gets involved. It is no good the Government boycotting Parliament.

[Debbie Abrahams]

I totally agree with my hon. Friend. We must have a responsive Government who listen to the will of the House and the people we represent. It is not good enough just to say that a motion is not binding—we need action.

[Ms Angela Eagle (Wallasey) (Lab)]

Does my hon. Friend agree that there is an urgent need for a pause? In Wallasey, the roll-out will begin halfway through November. Six weeks later, it will be Christmas. The Department for Work and Pensions will not be open on Christmas day, which means that many of my constituents will have to wait until the new year for assistance. That is why our local food bank is looking to collect 15 tonnes of extra food to deal with demand. Does she agree that it is time that the Government listened to Parliament and acted to alleviate such obviously avoidable hardship?

[Debbie Abrahams]

My hon. Friend makes an important point. Food banks are running out of food as the scheme is being rolled out. What will happen to families who desperately need financial support?

[Paula Sherriff (Dewsbury) (Lab)]

One of my constituents who has severe mental health problems has been signed off as sick until December. We go on to universal credit in November, and he has been advised that if he does not prove that he is looking for work, he will be sanctioned and his benefits will be stopped. Does my hon. Friend agree that it is dangerous to have assessors overriding the views of registered doctors?

[Debbie Abrahams]

My hon. Friend makes an important point about the impact of in-work conditionality. There are about 1 million people on zero-hours contracts who may not know from one week to the next whether they will be able to work 35 hours each week, and we know how much harm universal credit will do to them. Those people are doing the right thing, but they may be sanctioned if they are deemed not to be working enough hours.

[Ms Karen Buck (Westminster North) (Lab)]

My hon. Friend is being generous with her time. During last week’s debate, I raised the reluctance of private sector landlords to rent properties to people who are on universal credit. Is she aware that social landlords frequently issue a notice indicating that they will seek possession of a property if the tenant is in arrears for only a week? Is it not scandalous that an ever-increasing number of people will approach the Christmas period with such a threat hanging over them?

[Debbie Abrahams]

Absolutely. Surely what is happening is not right, so we must stop this.

I will now make some progress, although I will take more interventions later. People might not have kept up with the hundreds of stories that we have heard from colleagues on both sides of the House, but we must make sure that the Government’s flagship programme is amended to take account of the real hardship that people are experiencing. We have heard about that hardship not just from claimants, but from charities that deal with claimants, as well as many other organisations.

There are three key issues with universal credit: the programme’s design flaws, which have been there from the outset, as I mentioned last week; the cuts that were introduced in 2015; and various implementation failures. First, I will talk about the programme’s flaws. The six-week wait before new claimants receive any payment is particularly draconian, and it is having real impacts. Four weeks of the waiting period are to provide that universal credit can be backdated, but an additional week’s wait was added as policy, and claimants must wait a further week for their payment to arrive. That is believed to be one of the primary drivers of the rise in debt and arrears.

[Kevin Hollinrake]

The hon. Lady talks about a six-week delay before any payments are received, but she will be aware that up-front payments are made available at the initial stage, so does she accept that that is not quite the case?

[Debbie Abrahams]

No, I do not.

It is so important to stress that half of those in rent arrears under universal credit entered arrears after making a claim. We know that one in four is waiting more than six weeks, and one in 10 is waiting more than 10 weeks.

[Stephen Lloyd (Eastbourne) (LD)]

There are 1.5 million people on housing benefit in the private rental sector, and private landlords do not have the flexibility or even the patience of housing associations and councils. Does the hon. Lady agree that if 50% of the 1.5 million people who will ultimately be on universal credit lose their homes, it would be an absolute catastrophe?

[Debbie Abrahams]

We know the real issues involved in the housing crisis at the moment, so the hon. Gentleman makes a very fair point.

The Government claim that the purpose of making payments once a month in arrears is to mimic the world of work, but that is not the case. Data published just yesterday by the Office for National Statistics shows that a quarter of the lowest-paid—those most likely to be on universal credit—are paid every week or fortnightly. As my hon. Friend the Member for Wirral West (Margaret Greenwood) has said, given that nearly 400,000 more people are due to go on to universal credit over the winter, at this rate 80,000 people will be waiting more than six weeks for a payment, with 40,000 people waiting more than 10 weeks for their first payment.

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

Will my hon. Friend give way?

[Debbie Abrahams]

I will take one last intervention.

[Louise Haigh]

My hon. Friend makes the very important point that these policies are not accidental consequences, but something that is baked into the universal credit system. That is why it is not unreasonable to ask the Government to respond within three sitting days of last week’s Opposition day debate. Does she share my concerns that universal credit payments will be made to only one member of a household and about the consequences of that policy for victims of domestic violence, on which my hon. Friend the Member for Birmingham, Yardley (Jess Phillips) has been campaigning?

[Debbie Abrahams]

Again, my hon. Friend makes a very important point. I will come on to all the different issues. I have raised the so-called advance payment, which is in fact, as I have said, a loan—it has to be paid back within six months.

[Lucy Frazer]

Will the hon. Lady give way?

[Debbie Abrahams]

No. I am sorry, but I am not going to take any more interventions.

Other design problems I mentioned last week include: the fact that payment is made to one member of the household—predominantly men—and that the second earners, who are predominantly women, face much reduced work incentives; the fact that severe disability premium payments were not incorporated into universal credit; the fact that rent is paid to the claimant rather than the landlord; the fact that self-employed people are subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; and the fact that in-work conditionality is coming down the track, meaning that 1 million working people will have to visit jobcentres while much of the Jobcentre Plus estate is being closed, and will face financial sanctions if they fail to work the hours their job coach deems they must work. On top of that, there are the real-time information flaws, which have been mentioned by my right hon. Friend the Member for East Ham (Stephen Timms), and the fact that there is no time limit on disputes, which will lead to more delays in payments. There is also, of course, the fact that the child element of universal credit has been reduced from 20 to 19 years.

I turn to the cuts made to the programme since its introduction. Universal credit was meant to simplify the system, but it was also meant to make work pay. We have always supported those principles, and we still do, but unfortunately the 2015 summer Budget slashed the work allowances, and the rate at which support is withdrawn was dramatically increased. As the Institute for Fiscal Studies said in its response to the Budget, that meant the promise that work would always pay was lost. The cuts reduced the work allowances from £222 a month to £192 a month for a couple with two children claiming housing costs. It is estimated that that will result in an additional 340,000 people in poverty by 2020. Some families have been left as much as £2,600 a year worse off.

Families with three children face even greater difficulty, as the Government have decided that the state should play no role in supporting the life chances of the third child. A whole generation of children will be born without the support that was offered to their siblings, which is a break from the historical principle that the state should not punish children for the circumstances of their parents. Single parents have been hit particularly badly. In real terms, a single parent with two children who is working full time as a teacher will be £3,700 a year worse off.

That is even before we reach the Government’s freeze on social security rates, which the Joseph Rowntree Foundation predicts will push 500,000 more people over the poverty line. Its analysis shows that the freeze will mean that a family of four receiving universal credit will be over £800 a year worse off in 2020, and that is on top of the other cuts I have outlined. Will the Minister confirm that the Government will continue the freeze on social security payments, including universal credit, given that it was introduced when inflation was 0.3% but the rate is now 3%?

As I revealed last week, the Child Poverty Action Group’s forthcoming report estimates that these cuts will push 1 million more children into poverty, 300,000 of whom are under five. What does it say about this Government when their policies knowingly push children into poverty? The Secretary of State, the Minister for Employment and many other Conservative Members have tried to suggest that data apparently showing a 3% increase in employment outcomes under universal credit compared with the situation under the previous system is evidence that universal credit works to get people into work. However, they fail to add that the data is from 2015—before the cuts were implemented. Will the Minister now commit to updating the figures, and will he retract these particular statistics, which he has used numerous times?

It is worth pointing out that the most recent figures show an underspend—I repeat, an underspend—on tax credits of as much as 2.4% compared with the projections of the Office for Budget Responsibility. Will the Government provide an exact figure for the savings that that has created? Could not some of the underspend be put towards sorting out the problems that we are now encountering under the new programme? I will return to that point in a minute.

[Kate Green (Stretford and Urmston) (Lab)]

Will my hon. Friend give way?

[Debbie Abrahams]

I am very sorry, but I will not give way now.

I turn to the implementation failures. Leaving aside the many changes to the programme’s schedule over the past few years, the most recent roll-out has been beset by problems. I was glad that the Government listened to Labour and will replace the high-cost phone line with a free one. Will the Minister give me a timetable of when that will happen? Will he also assure me that the free phone line will be funded not by the taxpayer but by Serco, the contractor?

Other implementation issues still remain, however, including the fact that people are denied prescriptions and dental treatment because pharmacies and dental practices do not know who is eligible for free treatment. People also do not know about advance payments or alternative payment arrangements.

I have been inundated with emails and calls from people telling me their UC horror stories. For example, a self-employed Oldham woman is worried that she will lose her business and home when she goes on to universal credit. I have received so many stories from self-employed people that you would not believe it, Mr Speaker. They are really concerned about what universal credit will mean for them. A private landlord is worried that three of his tenants are thousands of pounds in rent arrears under universal credit, although they had never previously been in rent arrears. Southwark Council estimates that such arrears will be an average of £1,700 per universal credit tenant. Disabled people are isolated and alone as the support of severe disability premiums disappears, along with other disability support. As I have mentioned, food banks are running out of food. Even current and former DWP advisers are expressing their deep concerns about the programme and the fate of claimants.

I come back to my asks. First, the Government must end the six-week wait. They should bring it forward by at least one week, but if it is to be brought forward by two weeks, as has been widely reported, that will make a huge difference to people. Secondly, they must ensure that alternative payment arrangements are offered to all claimants at the time of their claim. To suggest that this already happens is more than a little disingenuous. The DWP guidance is vague to say the least. The alternative payment arrangement options include fortnightly payments, split payments and payments directly to the landlord.

[Lucy Frazer]

Will the hon. Lady give way?

[Debbie Abrahams]

I will not; I am sorry.

My third ask is that the Government reconsider closing one in 10 jobcentres at the same time as they are rolling out the programme. It is nonsensical that those closures are happening at the same time.

Finally, given the latest assessment from the OBR, which shows a projected 5% underspend in tax credits, which is equivalent to £660 million, will the Government commit to investing that money back into the programme, for example to eliminate the two-child limit? I also remind the Minister of my earlier question about lifting the social security freeze.

All this is reason for the Government to respect the will of the House—this country’s elected representatives—and pause the universal credit full service roll-out. I stand ready to work with them in the national interest to address these problems and avert the disaster that is universal credit.

--- Later in debate ---

[Debbie Abrahams]

I start by thanking everyone who has spoken in this debate. I cannot express how disappointed I am that the Government do not seem to have heard the concerns raised by our constituents, charities and so many others, including some of their own Members, and how disappointed I am that the Secretary of State for Work and Pensions did not come to the House today. What message does that send? It is profoundly disrespectful to this House and to the people we represent. I sincerely hope that we have not reached a constitutional impasse, as the Government seem to be refusing to act on the will of the House as expressed in last week’s vote.

This important constitutional debate is, however, little relief for those living in areas about to be placed under universal credit full service. They face the debt arrears and possible eviction that have occurred elsewhere. In my opening remarks, I made clear the areas on which Labour wishes to see improvement from the Government. Those areas fall under three broad headings: programme design flaws; reversing cuts to funding; and implementation failures. Our criticisms have been confirmed time and again by hon. Members throughout this emergency debate and last week.

What we have here is a rare case in which Members of all parties are agreed on the fundamental principles at stake, and we are willing to work together to ensure that universal credit is a success and supports people into work without fear of a loss of income. The Prime Minister stood on the steps of 10 Downing Street and told the nation that she would help those struggling to get by, that she would build a country for everyone. More than a year has passed now, and no conceivable action has been taken to alleviate the miserable effects of seven years of failing austerity upon those on the lowest incomes.

The House’s view is clear: the Government must act. Should they fail to do so, we will keep holding them to account. We will keep fighting on this vital issue, standing up for the 7 million people who will be affected, until change has been realised and we have built social security that is fit for purpose and is there for all of us in our time of need.

[Mr Speaker]

The Question is as on the Order Paper. I will say it again—[Interruption.] Order. Some people seem to need help. [Interruption.] Order. I do not need harrumphing from a sedentary position from a junior Whip, the hon. Member for South Derbyshire (Mrs Wheeler). It does not avail her, and it does not assist the service of the House.

Question put and agreed to.

Resolved,

That this House has considered the Government’s response to the decision of the House on pausing the Universal Credit full service roll-out.