Universal Credit Roll-out

Debbie Abrahams Excerpts

Thursday 16th November 2017 Commons Chamber

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

I congratulate the hon. Member for Banff and Buchan (David Duguid) on his maiden speech. He showed his obvious commitment to his constituency and it was kind of him to praise his predecessor. I, too, extend my good wishes to her.

There have been some outstanding contributions to what has been a fiery debate. I congratulate the Chairman of the Work and Pensions Committee, my right hon. Friend the Member for Birkenhead (Frank Field), on securing the debate and on the Select Committee’s timely report on the six-week wait for universal credit. I also congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on her excellent speech, as well as my hon. Friends the Members for Bishop Auckland (Helen Goodman), for Heywood and Middleton (Liz McInnes), for North West Durham (Laura Pidcock), for High Peak (Ruth George) and for Bermondsey and Old Southwark (Neil Coyle), along with the hon. Members for Glasgow South West (Chris Stephens) and for Lanark and Hamilton East (Angela Crawley). The hon. Member for Stirling (Stephen Kerr) took a sensitive and analytical approach to the report, and described what needs to happen in a measured way. She is not currently in her place, but the hon. Member for South Cambridgeshire (Heidi Allen) of course gave a characteristically bold speech.

This is the third debate on universal credit in the past month. Today, as in the previous two debates, the Government have been called on to reduce the six-week waiting period that applicants face. As we have heard, what some have called the “long hello” is believed to be one of the primary drivers of the rise in debt and arrears that we are now seeing. Some 49% of families who are in arrears under universal credit state that their arrears started after they made their claim and because of the waiting times to receive payments, support being delayed or stopped, or administrative errors.

On Monday the Chairman of the Backbench Business Committee, my hon. Friend the Member for Gateshead (Ian Mearns), told the House that as universal credit is being rolled out, social housing providers across the north of England are finding more and more of their tenants are going into rent arrears. The total debt of 10,500 universal credit claimants is nearly £4.2 million, with an average of just over £400 each. In Greater Manchester, where universal credit was first piloted, the average arrears for UC tenants is now £824 compared, with £451 for non-UC tenants. In London, it is even worse: councils such as Southwark are estimating average arrears of approximately £1,700 per UC tenant.

What about the private rented sector? We have heard some of the serious issues related to pre-emptive strikes in respect of tenancy agreements. A landlord contacted me because he was concerned about three of his tenants who are thousands of pounds in rent arrears. They had never previously been in arrears.

A reduction in the six-week wait would be a good start, so I look forward to hearing the Minister’s response on that. I was disappointed—as, I think, was Mr Speaker —to hear of certain revelations coming out in the media yesterday. I hope that the Minister will enlighten us as to whether the wait is going to be reduced by one or two weeks. Reducing the six-week wait would only be a start, because it will not address the significant design issues that we have seen since the start of universal credit.

Some examples of those design issues are: the monthly payment being made in arrears following a monthly assessment period, when most people in receipt of UC are paid weekly or fortnightly; the payment being made to the main earner of the household, predominantly the man; rent being paid to the claimant rather than to the landlord; self-employed people being subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; the real-time information flaws that my right hon. Friend the Member for East Ham (Stephen Timms) has mentioned previously, and for which there is no time limit to disputes, leading to more delays in payments; and, of course, the in-work conditionality coming down the track, which will mean a million working people visiting jobcentres while much of the Jobcentre Plus estate is being closed, and facing financial sanctions if they fail to work the hours their job coach deems they must.

In addition, reducing the waiting time does not tackle the chronic issues with implementation and functionality. A pregnant woman got in touch with me when a change in circumstances meant that she had to apply for universal credit because her ESA claim was closed. She could not apply online, and was given a number to call, then another one, then another one and finally, she was referred back to the original number. To say that training is needed is an understatement.

My hon. Friend the Member for Batley and Spen (Tracy Brabin) mentioned yesterday at Prime Minister’s questions the ridiculous position of one her constituents who did not have photo ID and had to have their identification verified by their doctor rather than being able to use their verified identification on the legacy benefits that they had previously been receiving. There are also issues with lost claims and so on.

The recent Social Security Advisory Committee report on in-work progression highlights those issues in its section on “Getting Delivery Right”. There is no getting away from the fact that the system is complex and more than struggling to cope, and that is not helped by the simultaneous closure of one Jobcentre Plus in 10. It must be recognised that the objective of simplicity should be for ease of access and navigation of the system by claimants. That is still not happening and must be addressed. I am pleased that the Government acceded to the need for Freephone numbers, but I would like to hear when they will be up and running—it is now three weeks since they were announced. We know that much more help is still needed.

Let me turn now to the cuts that were wielded to universal credit in the 2015 summer Budget. As the Institute for Fiscal Studies said at the time, they mean that the promise that work would always pay—a primary objective of universal credit—has been lost. Let us remind ourselves of those cuts. They include: cuts to work allowances which, for example, mean that a couple with two children claiming housing costs will receive £192 a month, down from £222 a month; cuts to nearly a million families with more than two children; and cuts to disabled people on ESA work-related activity group of £1,500 a year when they transfer on to universal credit’s limited capacity to work. There is also the freeze in the uprating of universal credit to take account of inflation.

Those cuts will see 3 million families worse off by as much as £2,600 a year. For some it is even worse. For example, in real terms, a single parent, who is working as a full-time teacher, with two children will be £3,700 a year worse off. The cumulative effect of these cuts to universal credit will see more working-age people and their children pushed into poverty. The Child Poverty Action Group has estimated that, by 2022, an additional million children will have been pushed into poverty, 300,000 of whom will be under five. They will be accompanied by 900,000 adults.

Although reducing the waiting period is a start, it will not be sufficient to prevent rising debt, arrears, and worse. That is why Labour has called for universal credit to be paused while it is fixed. As I have said before, in addition to reducing the six-week wait, we want all claimants to be able to decide whether they want fortnightly or monthly payments, whether they want payments split in the household and whether they want the housing payment to be paid directly to the landlord. Fundamentally, we want investment in universal credit to ensure that work does always pay and that our children and young people are not being pushed into poverty, left destitute or worse.

With nearly a million people set to move on to universal credit over the winter, the Budget gives the Government an opportunity to deliver on their promise

“to make the country work for everyone”.

I hope that they take it.