Private Sector Pensions

Debbie Abrahams Excerpts

Monday 22nd January 2018 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the Government’s plans to stop private sector pension abuse.

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

The vast majority of employers do the right thing by their pension schemes, and members can expect to receive the pension benefits they have paid for throughout their working lives. The Pensions Regulator and the Pension Protection Fund were set up in 2004 to provide pension scheme members with a safety net to ensure pension benefits receive some protection when things go wrong—it is a fact that some businesses will fail. The PPF approach has been supported on a cross-party basis since 2004.

To prevent irresponsible employers from off-loading pension liabilities on to the PPF, the regulator was given a range of powers, including the ability to recover significant assets where employers failed to take account of the scheme. There are about 6,000 defined benefit schemes, however, and such cases are very few and far between. It is the responsibility of the regulator to strike a balance between protecting members and PPF levy payers, and minimising any adverse effects on the sustainability of employers and businesses when it comes to the regulation of defined benefit funding.

The regulator does not have the power to stop businesses paying out bonuses to executives or dividends to shareholders, but if it believes that a scheme is not being treated fairly, it will investigate to see whether the use of its powers is appropriate. The Government are clear, however, that where sponsoring employers can meet their pension promises, they should and must do so. That is why we have suggested ways of strengthening the current scheme to enable the regulator to be more proactive. In fact last February we published our Green Paper, “Security and Sustainability in Defined Benefit Pension Schemes”, which included suggested measures that could strengthen the powers of the Pensions Regulator by introducing punitive fines for actions that harm a pension scheme. We also set out powers to enhance the regulator’s ability to demand information to ensure effective governance and spot issues before damage is done.

Our manifesto in June 2017 reaffirmed this intent by proposing to give the regulator the power to impose punitive fines alongside contribution notices so that pension scheme members are fully protected. The details of the fine would be worked through with all the relevant stakeholders, but it would represent a significant strengthening of the deterrent. We also intend to make certain corporate transactions subject to mandatory clearance by the Pensions Regulator, but we must take care to ensure that these measures do not have an adverse effect on legitimate business activity and the wider economy.

I should tell colleagues that we have received 800 responses to the Green Paper, and they are being reviewed by the Department. The White Paper is in progress and will be published in the spring. Effective regulation is dependent on a prompt flow of information between the parties concerned, and on compliance with rules and processes. Following the publication of the White Paper, we will introduce new regulation to ensure that the regulator gets the information it requires to conduct investigations and casework effectively and efficiently. It remains the case that the Government support free markets, enterprise and businesses, but this has to be conducted responsibly.

[Debbie Abrahams]

Yesterday, the Prime Minister chose to announce via the media, in part in response to the collapse of Carillion, that the Government planned to introduce tough new rules to stop private sector pension abuse. Carillion had 13 defined benefit schemes in the UK, with 28,500 members and a combined pensions deficit of £587 million. Between the end of 2015 and last year’s interim results, the difference between Carillion’s assets and liabilities almost doubled, from £317 million to £587 million. We know that profit warnings started to be issued in the summer of 2017. Given the severity of the financial problems facing Carillion, why did the Government not act then, rather than attempting to close the stable door after the horse had bolted?

We have argued for years that the Government should take better action to protect people’s pensions. The Government had the opportunity to act in 2013 and again in 2015, by supporting Labour’s amendments to pensions governance in legislation. More recently, the Work and Pensions Committee warned the Government of the need for protections and for more powers for the regulator. Although we welcome the Green Paper, the urgency has just not been there. Why did the Minister choose to ignore those warnings?

The Committee made a number of recommendations, including that the Pensions Regulator should have mandatory clearance powers for corporate activities that put pension schemes at risk, and that it should have new powers to impose fines at a level that would genuinely deter such dangerous and irresponsible behaviour. Why did the Government refuse to implement those recommendations at the time? Are the Government now ready to commit to implementing them fully? If the Government had taken action, Carillion’s massive debt accrual might have been arrested.

Given the scale of the liabilities and the concerns for other defined benefit schemes, what does this mean for the adequacy of the Pension Protection Fund? The collapse of Carillion has already led to a rise in pension scammers targeting those with pension pots. What about the defined contribution schemes that are not covered by the Pension Protection Fund? Will the Secretary of State investigate the apparent conflict involved in BlackRock being responsible for those schemes while simultaneously betting against their employer? Finally, can she advise the House what measures will be proposed in the White Paper, and when, exactly, they will be brought to the House?

[Ms McVey]

As Members on both sides of the House know, the regulator is an independent, arm’s length body. It was set up in 2004 after much discussion about how it should work and how it could best support pensioners when they needed its help. What it never did was to interfere with the running of a business; that was what was decided. We said that we needed to make sure that we could go further if we had to. That is why we have set about introducing a Green Paper—as I said, we have had 800 consultation responses—looking at where it is best to intervene, to make sure that we get the balance right. We do not want to tip the edge and unnecessarily cause harm to a business.

Profit warnings mean that a company will not get the profit that it expected—no more than that. We have to make sure that the Government do not precipitate anything that could be seen as negative from business. That is why we are looking at all these 800 responses, looking carefully and considering how to protect companies’ employees, protect pensions and move forward in the most conducive and careful manner. The new White Paper will be coming forward later this year.

Financial Guidance and Claims Bill [Lords]

Debbie Abrahams Excerpts

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

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

How lovely it is to see you in your place, Mr Deputy Speaker; I extend my good wishes to you.

It was remiss of me not to welcome the Secretary of State to her place during the earlier urgent question. I congratulate her and look forward to working with her, possibly not always in the same tone as today. I think this will be a constructive debate, but there is a lot for us to discuss in the Work and Pensions portfolio.

I thank the Secretary of State for outlining the content of the Bill. I take this opportunity to thank Members of the other place who have spent many months scrutinising it. Although concessions have been made, we believe that several more are still needed. However, we recognise the importance of the Bill’s stated aims: principally, to increase the levels of financial capacity, reduce the levels of problem debt and to improve public understanding of occupational and personal pensions. As such, we will not oppose it.

As has been explained—I will rush through this bit—the Bill is in two parts. The first establishes a new arm’s length entity to provide money and pensions guidance and debt advice. This body will replace three existing publicly funded consumer bodies: the Money Advice Service, the Pensions Advisory Service and the Department for Work and Pensions’ Pension Wise service. The new single financial guidance body will also have responsibility for the strategic function of supporting and co-ordinating the development of a national strategy. To ensure that the Bill’s stated aims are met, we want the new body to be a highly visible and properly resourced organisation able to identify and support the many people who need help.

The second part of the Bill introduces a tougher and welcome regulation regime to tackle conduct issues in the claims management market. We can also support that provision.

[Gareth Thomas]

Is not one problem that risks inhibiting the success of the new single financial guidance body the fact that we do not know where the highest levels of problem debt are in this country? Might it not be sensible to take the opportunity in Committee or on Report to consider the example of an American piece of legislation, the Community Reinvestment Act, which requires all lenders to publish anonymised details of the debts taken out with them so that community organisations and debt advice bodies can know where to target their expertise and help?

[Debbie Abrahams]

My hon. Friend makes a valuable point. I am not familiar with that particular piece of American legislation, but I will look at it and see what we can do in terms of tabling amendments in Committee.

As we have heard, the FCA will regulate claims management company activity as a regulated activity, taking over responsibility from the Ministry of Justice. The Bill is a high-level framework Bill that, thanks to our colleagues in the other place, is now in much better shape. We particularly welcome the Government’s assurances that the SFGB will work closely with the FCA and the Treasury on issues of financial inclusion. Given, however, that the Work and Pensions Committee, of which I was a member at the time, raised concerns nearly three years ago about the inadequacy of Government measures to protect pension savers, and given also the difficulties that have arisen since, I am bound to ask why it has taken so long to recognise these failings.

I am also concerned that there are no specifics on delivery channels, especially given the very large number of people currently failing to access services. It is vital that the SFGB has the autonomy and resources to make itself truly visible to the public. Given the failings in other parts of the Secretary of State’s Department, and given the complex needs and limited resources of the people who will most need its services, “digital by default” is not a mantra we want to hear from the SFGB or its sponsoring Department.

[Stephen Kinnock (Aberavon) (Lab)]

The transfer of the British Steel pension scheme into a new scheme was announced in early 2017 and was very public. When it all blew up and became fertile territory for unscrupulous pensions advisers, the FCA seemed surprised it was happening. Why did it not see that coming? What steps should the Bill take to improve the early-warning system so that regulators can see these things coming down the track and be far more proactive in getting out there? After all, prevention is better than cure.

[Debbie Abrahams]

My hon. Friend makes a very valuable point that I will come to later. This is what we are seeing: we saw it with the BSPS and are now seeing it with Carillion and the pension savers there.

Last year’s statistics from the FCA make shocking reading. Of those over 55 planning to retire in the next two years, only 10% had used the Pensions Advisory Service, and only 7% had used Pension Wise. The new SFGB will have to do much better than that. Eight million people in the UK are over-indebted, according to a Money Advice Service report from last March, and less than one in five of these individuals currently seeks advice. Many are among the most vulnerable: over half the clients seen by MAS-funded debt advice projects have had a diagnosed mental health condition. It is vital that those people continue to be supported during the transition period, and that the SFGB develops strategies to identify and reach people who do not currently use any services. The impact assessment talks about “long-term…savings” once the SFGB has been established. It is difficult to see how such savings will be made if the new body is to fulfil all its objectives, particularly its objective of ensuring that information, guidance and advice are available to those who most need them. Have the Government considered what resources the SFGB will need to identify and support those who do not currently access advice or guidance? Has the Minister considered what arrangements will be put in place to ensure that people can continue to access existing services during the transition period?

The five areas on which the SFGB is expected to concentrate include provision of debt advice, and provision of information and guidance relating to occupational and personal pensions, accessing defined contribution pots and retirement planning. We welcome the Government’s decision, at the urging of our colleagues in the other place, to make it explicit in the Bill that the information, guidance and advice will be impartial, and that it will continue to be provided free to members of the public.

The SFGB will also help consumers to avoid financial fraud and scams; give information on wider money matters, and co-ordinate and influence efforts to improve financial capability; and co-ordinate non-governmental financial education programmes for children and young people. It also has a strategic function: to support and co-ordinate a national strategy. Given the appointment of a Minister with responsibility for financial inclusion, that needs to be strengthened to a “develop and deliver” function.

We welcome the focus on the provision of financial education for children and young people, but we think that the Government should be bolder, as recommended by the House of Lords Financial Exclusion Committee report “Tackling financial inclusion”. The new body will have to cope against a backdrop of rising prices and stagnant wage growth, a fall in real incomes and saving levels that have crashed. Evidence provided to the Lords Select Committee referred to fears expressed by debt agencies about the rise in queries concerning rent arrears, energy and water bills, telephone bills and council tax.

Then there is the impact of universal credit. As I have mentioned on numerous occasions inside and outside the House, we support UC’s aims of simplifying the benefit system, making transitions into work easier and, fundamentally, reducing child poverty. However, the Citizens Advice report “Universal Credit and Debt” showed that some aspects of UC risk causing or exacerbating personal debt problems. UC clients are more likely to have debt problems than those on legacy benefits. A quarter of the people that Citizens Advice helped with UC needed help with debt. UC clients are also struggling to pay off their debts. More than two in five debt clients on UC have no spare income to pay creditors.

Citizens Advice makes a number of recommendations, which are particularly pertinent in the context of the Bill. They include the need for more funding for free, impartial debt advice to meet existing increases in demand resulting from UC. In addition, Citizens Advice wants the Financial Conduct Authority actively to monitor the roll-out of UC. Has the Minister considered the impact of UC on personal debt, and its implications for the resourcing of the new SFGB? Taking up the Citizens Advice recommendations would alleviate some of the problems caused by UC. Fundamentally, as I have said, the Government must stop the roll-out of the programme and reverse the cuts to UC, which mean that it is failing to make work pay and failing the very people it is meant to help.

The SFGB will have to cope with an increasingly complex pensions sector. The growth of auto-enrolment brings more and more people within the scope of occupational pensions. The other major change has been the introduction of pension freedoms. In that context, we welcome the Government’s commitment in the other place to the delivery of the pensions dashboards. However, given the increasing issues that pension scheme members face—including those of British Steel, and now Carillion —in addition to a much tougher pension regulation framework, I want the Government to tackle the appalling abuse perpetrated by opportunistic financial scammers, who have targeted BSPS and Carillion pension members. I will say more on that later.

[Mr Leslie]

Does my hon. Friend agree that it would be useful to have a connection between the new financial guidance body and the Financial Conduct Authority? I slightly regret the fact that we are moving away from Treasury involvement in this whole issue. My hon. Friend may know that some of the products that people are investing in with asset managers and insurers, having got their pensions freedoms, are known as PRIIPs—packaged retail and insurance-based investment products. New regulations came out this month, but there is a risk of these products opening a whole new mis-selling scandal, because they are creating all sorts of wild projections about the amounts that could be earned. Does my hon. Friend agree that the guidance body needs to keep on top of this with the FCA?

[Debbie Abrahams]

My hon. Friend has made an absolutely key point. To go back to my urgent question, things are slipping through the net, and those links need to be tightened up. Again, this is something we need to explore in Committee.

As it stands, the SFGB will provide advice to the self-employed on their personal finances and debts only, and not on their business finances or debts. The Money Advice Trust, which helped more than 38,000 people last year, says that, for many self-employed people, there is simply no distinction between their personal and business finances. To exclude business finances and debts from the SFGB’s remit is a missed opportunity, particularly given the significant growth we have seen in self-employment in recent years. The self-employed as a group have also seen falling incomes since the recession. Will the Minister consider extending the SFGB’s remit to cover business finances and debts?

On the changes regarding claims management companies, we agree that the current arrangements regulating the industry are unsatisfactory. The current situation has been characterised by poor value for money, information imbalances, nuisance calls and texts, and the progression of speculative and fraudulent claims. We accept the proposition that there is a public interest in having an effective claims management market operating in the interest of consumers, as that can provide access to justice for those who are unwilling or unable to bring a claim for compensation.

Further, as the Carol Brady review asserts, a well-functioning CMC market can act as a check and balance on the conduct and the complaints-handling processes of individual businesses. We note that the Brady review considered that a move to the FCA would represent a step change. That seems the right decision, especially as 99% of turnover relates to financial services—PPI, packaged bank accounts or insurance.

Let me turn now to the content of the Bill. While we generally support the Bill, there are several aspects that we will look to strengthen, particularly in relation to clauses 4, 5, 25 and 28.

[Gareth Thomas]

I thank my hon. Friend for giving way again. I am fortunate enough to chair the Co-operative party, and one thing we are keen to encourage is the take-up of the services offered by financial co-operatives, such as credit unions. Would she be sympathetic to an amendment on Report from Co-op MPs urging the single financial guidance body actively to promote credit union services across the country?

[Debbie Abrahams]

Again, my hon. Friend makes a very interesting point, and I would look to work with him on the details of that to understand exactly what he wants to achieve.

I also want to talk about the need for a duty of care on financial service providers and a breathing space for those trying to manage their debt problems.

On clause 4, we welcome the Government’s commitment to ban cold calling, which is the leading driver of pension scams. The scope of the clause is still too narrow, and the clause is not nearly urgent enough. Every day that passes without a ban, people are being avoidably conned out of their life savings.

However, there are also scams that work against businesses. In the last four years, the Association of British Travel Agents has recorded a 520% increase in gastric illness complaints. As a result, hoteliers in the markets affected are now threatening significant price increases, and some are even considering withdrawing the all-inclusive product from UK holidaymakers entirely. ABTA has recently released shocking statistics showing that one in five people have been contacted about making a compensation claim for holiday sickness, with cold calling being the most common method of approach.

On clause 5(2), within 24 hours of the collapse of Carillion last week, adverts started to appear online encouraging people to cash in their pension pots. That reflects the experience of BSPS members. The Minister will have noted the evidence to the Work and Pensions Committee, before which the extent of pensions scamming was revealed. That involved some advisers travelling hundreds of miles in the hope of capturing high fees for each pension pot they succeeded in transferring. The Select Committee described retirement savings sharks reportedly circling around the British Steel pension scheme members, providing a “honeypot for scammers”. One steelworker is reported to have missed out on £200,000 of his pension transfer value after being advised, and as I have said, we are already seeing a similar targeting of Carillion pension members.

The law does not currently prohibit firms from acting as introducers, provided that they do not stray into providing services for which they require FCA authorisation. That applies to any non-regulated firm. Last year, the FCA received 8,612 reports of potential unauthorised activity in the United Kingdom. If the firms and/or individuals reported are within the remit of the FCA, it can investigate and take action, which ranges from publishing unauthorised firms’ and individuals’ warnings and taking down websites, to taking civil court action to stop activity and freeze assets, insolvency proceedings, and, in the most serious cases, criminal prosecution. Last year, the number of enforcement cases taken was 69. Given the current climate, it is clear that enforcement action needs to increase, but most of the funds that the FCA collects from penalties on financial services firms go directly to the Treasury. What consideration has the Minister given to removing the exemption of introducers from the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and allowing the FCA to keep the financial penalties that it receives so that it can expand its enforcement work?

Free and impartial Pension Wise guidance is essential at times like this, and it is greatly valued by those who use it, but take-up is nowhere near high enough. Far too many people are currently making vital decisions in the dark, which puts them at greater risk of suffering irrevocable financial detriment through scams or choices that are contrary to their interests, such as transferring pensions to savings accounts. Those problems will only grow as people become more reliant on income from direct contribution pensions in retirement. The existing Pension Wise promotion regime of signposting by pension providers—who have no business interest in promoting the service—and advertising has proved insufficient.

We welcome the Government’s acceptance that people should be given more encouragement to take guidance, but we believe that there should be a stronger nudge. Although clause 5(2) is welcome, we think that it can be improved through exemptions to avoid unnecessary burdens and stronger core requirements to make taking guidance a true default option. While individuals could choose not to take free and impartial guidance before accessing their pension pots, that would no longer be the consequence of passivity: as with the highly successful automatic enrolment policy, people would have to actively opt out. Default guidance would promote shopping around, better-informed decision making and protection against scams. Combined with a ban on cold calling, it would represent a step forward in consumer protection in an era of pension freedoms. Will the Minister agree to introduce new provisions in Committee to impose an immediate ban on cold calling and to introduce default guidance to assist people accessing or seeking to transfer their pension assets, with strong penalties for advisers who wilfully and detrimentally scam pension members?

Clause 25 gives the FCA the power to impose a cap on the fees that claims management companies can charge for their services, and a duty to exercise that power in respect of financial services firms. The Government have also introduced an interim cap on the fees that CMCs can charge consumers in relation to payment protection insurance claims. However, that does not go far enough to protect consumers from paying disproportionately high fees for what is often very little work. The Ministry of Justice estimates that the average amount of commission charged to consumers by CMCs is 28%, plus VAT. The FCA estimates that the average payout for PPI mis-selling is around £1,700, which means that a CMC would, on average, charge a successful claimant £476 plus VAT. Although the proposed fee cap would reduce the amount that consumers must pay CMCs, it would still mean an average charge of £340 with VAT on top. If the Government want to take meaningful action to protect consumers from high fees, they should propose a solution that would allow them to keep 100% of PPI compensation.

The Government should require firms to pay CMC costs for PPI claims, capped at 20% plus VAT, when they are at fault and when the consumer has used a CMC rather than claimed directly. This measure would apply only for the interim period until the new FCA regulations came into force or until August 2019, the deadline for making PPI claims, whichever was the sooner. This would incentivise firms still paying compensation to proactively reach out and encourage consumers to make claims directly to them, and to allow that to be done easily. It would also protect consumers from paying high charges to CMCs.

We support the strengthening of the regulation of CMCs, but we look forward to a regulatory regime that better protects consumers from high charges, poor value for money and unacceptable behaviour on the part of far too many CMCs. We also welcome the improvements made during consideration of part 2 in the other place, notably clause 28, which introduces an interim cap on the fees that CMCs and law firms can charge for claims in respect of PPI. This is an important protection for consumers in the run-up to the FCA’s claims deadline of August 2019. Customers can claim directly from their PPI provider for free, but those who choose to enlist support should not have to face the fees currently being charged by some CMCs.

However, the clauses introduced by the Government at the urging of Baroness Meacher apply only to PPI claims, even though the Ministry of Justice’s original consultation considered other bulk claims by CMCs, notably in respect of packaged bank accounts. In the vast majority of cases, the pursuit of such claims does not require a significant amount of work, but in its response to the consultation, the MOJ merely asserted that

“analysis of the evidence received”

suggested that

“PBA claims should be grouped with other financial-services claims due to additional work needed on these types of claims.”

It is far from clear that CMCs undertake significant work or add significant value in submitting PBA claims on behalf of consumers. If the CMCs’ approach to PBA claims truly differs little, if at all, from their approach to PPI claims, the Bill should cap their charges in exactly the same way. If the Government cannot provide justification or act to protect customers from millions of pounds of excess charges for PBA claims before the FCA introduces its own rules a year or more from now, we will table amendments in Committee to achieve that. We ask the Government for a better justification of their decision not to apply the interim fee cap to PBA claims.

I shall move on to the breathing space scheme. An estimated 2.4 million children live in families in problem debt in England and Wales, and the FCA estimates that half the UK population is financially vulnerable. It is shocking that an estimated 600,000 families in England and Wales are spending more on overdue bills than they spend on food. A measure that would protect such families is a breathing space scheme. Such a proposal would introduce a legal freeze on interest and charges, collections and enforcement action to give people time and space to stabilise their finances and put in place an affordable and repayment-sustainable plan. Such a scheme, which has been championed by the Children’s Society, StepChange Debt Charity and many others, was included in our manifesto and that of the Conservatives, and I am delighted to see that, following pressure in the other place, a commitment is now on the face of the Bill. Yet again, however, the timescales for implementation are too slow.

I appreciate that the consultation on the breathing space scheme has now closed, but I want it to have certain fundamental tenets. First, it should include a legal freeze on interest and charges, collections and enforcement action. Secondly, as many debts as possible need to be included, especially debts to public bodies. Thirdly, there should be no gaps in protection between the initial breathing space period and the transition to a statutory debt management plan. Finally, the breathing space scheme needs to be implemented as quickly as possible. Again, I would be grateful for the Minister’s response to those points, either at the end of the debate or in writing to me.

I would now like to focus on an idea that received a great deal of support in the other place and that has been raised by Members here today—namely, a duty of care on financial service providers. That is not currently in the Bill, but we now have an important opportunity to discuss the support that banks provide to their vulnerable customers. Research from Macmillan Cancer Support, which was mentioned earlier, shows that four out of five people with cancer are affected financially by increased costs and loss of income following their diagnosis. As the Bill recognises, ensuring that people have access to the right help and advice is essential to stopping financial problems.

[Justin Tomlinson (North Swindon) (Con)]

On that point, will the hon. Lady join me in congratulating Nationwide Building Society, which has led the way by working with Macmillan to ensure that appropriate support is made available as soon as there is a diagnosis?

[Debbie Abrahams]

I congratulate Nationwide and all organisations that recognise that they have a duty of care to their customers. We need to put that duty of care on the face of the Bill, particularly for those who find themselves in vulnerable circumstances.

As providers of mortgages and other key financial commitments, banks and building societies have a huge influence—good or bad—on the financial wellbeing of many households. When the right support is put in place, that can lead to improved outcomes for customers, as we have just heard. However, that Macmillan research shows that problems still exist and that there is a lack of consistency in the support offered to people when they seek help.

With that in mind, will the Government support a revision of legislation to incorporate the recommendation made by the Lords Financial Exclusion Committee regarding a duty of care? The Committee concluded that the Government should amend the Financial Services and Markets Act 2000 to introduce a requirement for the FCA to make rules setting out a reasonable duty of care for financial services providers. I appreciate that any change as significant as that must be subject to proper consideration, and it is therefore welcome that the FCA has committed to publishing a discussion paper. However, the Government and the FCA have said this must wait until

“after the UK’s withdrawal from the EU”

becomes clear, but I do not think that we can wait, because people cannot wait. I therefore urge the Minister to look carefully at the issue and to bring forward suitable proposals in Committee.

In conclusion, we by and large support the Bill, but a number of areas can be strengthened significantly—for instance, the duty of care needs to be addressed on the face of the Bill—so I urge the Minister to act on those areas, and I look forward to his response.

[Several hon. Members rose—]

Pension Equality for Women

Debbie Abrahams Excerpts

Thursday 14th December 2017 Commons Chamber

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

I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this important debate, and I am absolutely delighted to be able to speak in support of his motion. We have had an excellent and passionate debate with some fantastic contributions, and I would like to thank each and every one of them. On the whole, it has been completely cross-party, recognising the real injustice that women born in the 1950s have been dealt. There can be no doubt that women have borne the brunt of this Government’s cuts over the past seven years, but that applies particularly to women born in the 1950s, who have been dealt a real injustice with the accelerated increase in their state pension age.

[Lilian Greenwood]

Does my hon. Friend agree that it is absolutely no surprise that 1950s women such as my constituents Jane Yates and Glenys Daly feel robbed? They have worked hard for 45 years and they say that their bodies are giving up, yet they cannot get the pensions that they have paid for.

[Debbie Abrahams]

There are so many cases like theirs, and I shall touch on a couple of them, if I may.

Women born in the 1950s have had their state pension age quietly pushed back, many without receiving any notice. They expected to retire at 60, only to find that they had three or more years to wait. In spite of some appalling stories of the dire circumstances that some of these women are facing, the Government have still refused to provide any transitional support. During our national pensions tour, which my hon. Friend the Member for Stockton North (Alex Cunningham) and I started this summer, we have heard from many women who are not only struggling but facing destitution. I shall mention a couple of cases, all anonymous of course. The first woman states:

“I’ve been paying national insurance for 43 years, but have no private pension or anything else for that matter. I’ve supported 2 children on my own salary as a divorced, single parent. I had no notification of the 1995 Act but in Feb 2012 I was told that my retirement date was May 2019. I’ll be 65 and 4 months. I’ve worked, got extra qualifications, had good jobs, but at 63 I am unemployed and am claiming JSA which finishes soon. I’ve little savings. Have applied for over 40 jobs since Sept. I’m at my wits end”.

The second woman states:

“I don’t remember ever getting a letter saying my pension age had changed. I’m disabled and have had a lot of stressful things going on in the last few years. Incapacity Benefit changing to ESA and worrying about that, then the bedroom tax and having to downsize, then news that DLA is changing. The change in State Pension Age just sort of crept in there and came to my attention when WASPI highlighted it. I kept hearing the words that no one will wait longer than 18 months! Then I realised not only would I not get a state pension when I was 60 but also the winter fuel allowance and bus pass would be affected. I’m tired of not mattering.”

Those women deserve more than this.

As we have heard, many of these women have had to rely on the wider social security system beyond the state pension to survive. This means that if they are claiming jobseeker’s allowance or universal credit, they will be expected to undertake 35 hours a week of job search activity, or be sanctioned. I would be grateful if the Minister commented on the recommendation in the final report of John Cridland’s review of the state pension age, which suggests that older jobseekers should be required to find only part-time work. Do the Government support that recommendation?

When the plight of women born in the 1950s was first raised by Women Against State Pension Inequality and various other groups two years ago, they stated that 3.8 million women were affected by the lack of notice of the changes in the Pensions Acts of 1995 and 2011. The change in the 2011 Act affected 2.7 million women, of whom only 150,000 have reached their revised state pension age to date. By 2026, they will all have retired. Those women feel palpable and justifiable anger. As they have said, they have done the right thing. They have worked all their lives, paid into the system for decades, cared for their children and cared for their parents, only for the goalposts to be moved. Many are seeking legal redress against the Government. They need action now, not in 10 or 20 years’ time.

Labour has presented two options that the Government could take forward now. The first, which was included in our manifesto, is the extension of pension credit to those most badly affected by the accelerated increase in the state pension age, enabling them to get additional support based on the 1995 state pension age timetable. That would provide approximately half a million women on the lowest incomes with up to £159 a week. We have repeatedly called on the Government to implement those costed measures—about £800 million, as my hon. Friend the Member for Easington mentioned—but they have sadly refused to act.

Our manifesto commitment said that we would consider other options as well, and I set out an additional option at conference that would give women the opportunity to retire up to two years early, rather than as expected under the Government’s plans. Given that the Government have so far refused to set aside additional expenditure, we felt that it was imperative to present cost-neutral proposals, so that there was no excuse to rule it out. Under the second option, women born in the 1950s would see a small reduction of 6% in their weekly state pension entitlement for each year that they retired early. Based on the state pension today, a woman retiring a year early would receive £149.98 a week instead of £159.55. That option would be available to all those waiting to retire—around 2.6 million women. However, as I said then and want to reiterate now, that proposal is a starter. It is to complement additional action on transitional protections. These women need action now, and the Government could introduce these options now, which also do not preclude compensation. We want to continue working with women to right the wrong that they have been done.

Labour’s options were developed after listening to women and men as part of the national state pension tour to discuss the future of our state pension system. We also met the various 1950s women lobby groups, and something that struck us profoundly was the urgency for many women. They need something now and cannot wait six months, let alone three, four or five years. As we all know, most 1950s-born women will retire in the next few years, so something needs to happen now, but this Government have ignored their pleas for help and have ignored the tangible measures that could be taken. Their approach is not only morally bankrupt and shows that they have no commitment to tackling burning injustices, but, given the prospect of a lengthy and costly court battle as women seek compensation for the years that they have lost, it is also extremely foolhardy.

Last week, my hon. Friend the Member for Stockton North challenged the Government on their contingency planning in the event of the courts awarding compensation to the affected women. The Minister said the Government believed that they were on firm ground, but history is littered with court and other decisions when injustice has been proved and Governments have had to pay up. It is clear that this Government have even less support in the House for their position on 1950s women than they do for a meaningful vote on the negotiated settlement with the EU, so I ask the Minister to work with us and with these women on a comprehensive set of bridging arrangements now.

--- Later in debate ---

[Guy Opperman]

The hon. Gentleman and I both voted for the 2011 Act to increase the state pension age, with the circumstances that apply, after much consideration of the variety of options that had been proposed. He and I, and certainly the Scottish National party and the Scottish Government, have differing views on taxation, such as on whether it should support Trident, but, with respect, the tax reduction he proposes would reduce the job-creating power of the businesses upon which we rely for the jobs and public services we all wish to support.

[Debbie Abrahams]

Will the Minister acknowledge that, two days before John Cridland’s report was released, data showed that life expectancy at 60 is actually going down and life expectancy at birth is flat-lining? This is the only developed country where that is happening.

[Guy Opperman]

I am grateful to the hon. Lady for raising that specific point, because I genuinely believe she is scaremongering—[Interruption.] Oh, yes. On the issue of life expectancy, there are two fundamental sources. The first is the ONS, which has repeatedly made it clear that life expectancy is rising across the board. We cannot get away from the fact that the ONS reported only this month that life expectancy continues to rise.

The Labour party manifesto sought an independent review of all aspects of the state pension age. Well, the Government did that with the Cridland report, which makes it critically clear that life expectancy has increased. Life expectancy at birth in 2016, for example, was 91 years for females and 89 years for males. In 50 years’ time, by 2066, life expectancy at birth in the UK is projected to rise to 98 years.

Healthy life expectancy has also been increasing in recent decades. Healthy life expectancy at 65, as a proportion of total life expectancy, has been relatively stable since 2000. Healthy life expectancy at 65, according to the latest ONS statistics, has been increasing in Scotland in recent years, as has disability-free life expectancy.

Universal Credit Project Assessment Reviews

Debbie Abrahams Excerpts

Tuesday 5th December 2017 Commons Chamber

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

I beg to move,

That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that the five project assessment reviews, carried out into universal credit between 2012 and 2015 by the Government’s Major Projects Authority now known as the Infrastructure and Projects Authority, and any subsequent project assessment reviews carried out into universal credit by the Infrastructure and Projects Authority between 1 January 2016 and 30 November 2017 that have been provided to Her Majesty’s Ministers at the Department for Work and Pensions, be provided by the Secretary of State for Work and Pensions to the Work and Pensions Committee.

The purpose of today’s debate on universal credit, the fourth in nearly eight weeks, is to seek the release of the project assessment review reports on universal credit to enable this House to scrutinise the Government’s flagship social security programme.

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

The hon. Lady has just said that this is the fourth debate in eight weeks. Can she clarify whether she asked for the documents in any of those four debates, or indeed on any other occasion in this House? [Interruption.]

[Debbie Abrahams]

As some of my colleagues are saying, we are asking for the documents now. We are pleased the Government finally acknowledged that their universal credit programme is not fit for purpose, and now we need to understand the extent to which it is not fit for purpose through the publication of these reports.

I wish to start by giving some context to today’s debate and then set out why it is so important that we have access to these project assessment reviews. For many months now, Labour has been calling on the Government to pause and fix universal credit. This is a direct response to the mounting evidence that the full service programme is driving hardship in the areas where it has been rolled out. I am sure hon. Members from across the House will now be aware of the figures, but the realities of the misery being caused by this programme bear repeating: half of those in rent arrears under UC report that their arrears started after they made their claim; 79% of those in debt are recognised as having priority debts by Citizens Advice, putting them at higher risk of bailiffs and evictions; and two in five have no money to pay creditors at the end of the month.

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

Is my hon. Friend aware of research published today by the Residential Landlords Association on this point, which found that 73% of landlords remain reluctant to let properties to people on UC? That is vital context. We need to understand what the Government know about the pressure on landlords in the context of UC.

[Debbie Abrahams]

Absolutely. My hon. Friend makes such a pertinent point. I was going on to say that demand for emergency food parcels in areas where UC has been rolled out is up 30%. Disabled people, single parents and families with children have been particularly affected. Initially, the Government’s impact assessments said that UC would reduce child poverty by 350,000, but then it was to be by 150,000. Now, the Child Poverty Action Group has estimated that by 2022 an additional 1 million children will have been pushed into poverty by as a direct result of cuts to UC. We have identified three drivers for these widespread problems: policy design issues; implementation flaws; and funding cuts.

As I have mentioned, at the recent Budget the Chancellor was forced to respond to Labour’s concerns about UC, as well as concerns from across the House—I acknowledge everybody’s work on this. As I said in my response to the Secretary of State’s statement on this, the measures in the Budget are welcome, not least in finally acknowledging that UC was not fit for purpose. But they are not nearly urgent enough, as they do not come into effect until next year; they do not address key issues, such as the assessment and payment periods or the single household payment; and fundamentally they do not redress the cuts and restore work incentives. Only £1 in every £10 that has been cut has been restored. Though he refused to pause the programme, as we had demanded, the roll-out of UC has been slowed considerably, meaning that the roll-out to all jobcentres will now not be completed until December 2018.

That brings us to the project assessment review reports and today’s motion. Five reviews on UC were carried out by the then Major Projects Authority between 2012 and 2015. As Members know, such reviews are independent ones that provide assurance to major projects. They contain in-depth analysis of the implementation of the project, including detailed assessment of the risks faced and the progress that has been achieved against the Government’s objective: to deliver their flagship social security programme, universal credit. Although these review reports have never been made public, the National Audit Office’s report on UC in 2013 stated that

“the Major Projects Authority’s project assessment review expressed serious concerns about the Department having no detailed ‘blueprint’ and transition plan for Universal Credit. In response to these concerns, the head of the Major Projects Authority was asked to conduct a 13-week ‘reset’ between February and May 2013”

In other words, it was clear that all was not well even then. The announcement of a “reset” was buried in the MPA annual report of that year, accompanied by a single sentence of explanation. This is how UC has limped on ever since.

To try to uncover the extent of the issues, freedom of information requests were submitted to the Government to access these project assessment reviews; but they were refused. The doughty campaigners appealed to the Information Commissioner, and on 30 August this year, the Information Commissioner’s Office ruled that this information must be disclosed by the Department in full, with the exception of the names of the civil servants named in the reports. The ICO’s judgment is important and worth reflecting on here.

[Jo Platt (Leigh) (Lab/Co-op)]

My local authority, Wigan Council, was part of the pilot for UC, which subsequently caused rent arrears, payment delays and increasing financial pressures on the local authority. Does my hon. Friend agree that if these project assessment reviews had been released when the Information Commissioner ruled, the Government could have paused the flawed UC system, thus preventing undue hardship for my constituents?

[Debbie Abrahams]

Absolutely. My hon. Friend makes such as a good point. This is what we have been calling for all along. We need to have an in-depth understanding of what the real issues are. We have outlined a number of those, but it is clear that the programme contains deep flaws. If we are serious about resolving these problems—I believe the Secretary of State is genuine in his offer to do so—we must understand exactly what the extent of the problems are.

[Lucy Frazer]

The hon. Lady referred to the decision of the Information Commissioner, rightly saying that there was a limitation in that the names of non-senior officials were not disclosed. However, there were two other things in that decision. First, there was an acceptance that it was reasonable to argue that routine disclosure of PAR reports would reduce their effectiveness. Secondly, and more importantly, it was stated that they were disclosed because six months had passed since the reports had been put together and therefore officials could feel that they had been able to give free and frank advice. But six months has not passed since the date of the reports that the hon. Lady has requested in this motion.

[Debbie Abrahams]

I do not think that gets away from the ultimate ruling, which was that these things should be published. I understand exactly what the hon. and learned Lady is saying, but at the end of the day the ICO ruled that these PAR reports must be published.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I make no apologies for raising this point repeatedly in this place. In a rural and remote constituency such as mine, the lack of ability for people to link up online is surely impeding any roll-out of UC. I am sure the hon. Lady recognises that, and the issue has to be taken on by Her Majesty’s Government. Meanwhile, it is of great concern in my constituency.

[Debbie Abrahams]

The hon. Gentleman makes a fair point. Again, we need to know the extent of the issues. I am sure the information system is one of those concerns. The Information Commissioner described the PARs as giving

“a much greater insight than any information already available about the Universal Credit Programme.”

[James Cartlidge (South Suffolk) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am going to finish this point. The ICO describes the programme as having

“been subject to a number of high-profile failings”.

In its judgment, the ICO weighed the public interest carefully and determined that the balance supports disclosure of these five reports, not least because UC could affect up to 11 million people, by the estimation of the ICO, with nearly 7 million relying on the programme once it is fully rolled out. The commissioner noted that the Department for Work and Pensions had not complied with the law in its handling of the original request for information and gave it 35 days to release this information into the public domain, with a failure to comply resulting in a written certification to the High Court. So we cannot underestimate the importance of this ruling.

[Heidi Allen (South Cambridgeshire) (Con)]

Nobody is more interested than I am in universal credit and in its being a success. Does the hon. Lady acknowledge that even if we do get the reports, because the roll-out has been very slow—I am glad it has—some of them are really old and the system has been significantly improved since then? They might give us a window into the past, but I sense that they will not give the opportunity that she is hoping for to identify flaws in the system, because I think we have fixed a lot of them.

[Debbie Abrahams]

But we do not know, do we? I recognise the hon. Lady’s commitment and drive—

[James Cartlidge]

Will the hon. Lady give way?

[Debbie Abrahams]

May I just finish responding to the intervention?

We need to understand what is in the reports. I absolutely understand the commitment of the hon. Member for South Cambridgeshire (Heidi Allen) on this issue, but we do not know until we have seen them.

[James Cartlidge]

This is all fine, but the key stats are in the public domain. The purpose of universal credit is to help people into work. We have record employment and record low unemployment. Those are the stats that matter. Does the hon. Lady celebrate them?

[Debbie Abrahams]

Well, where to start with that? First, unless the hon. Gentleman has a crystal ball and has been able to read the reports, I do not think he is in a position to say that they will reveal nothing else. Secondly, on the stats he mentioned, I think there is enough on the record to refute those points.

[Stephen Timms (East Ham) (Lab)]

Does my hon. Friend agree that the Government’s insistence on cloaking this project in secrecy, right from the start, has been one reason why it has gone so badly wrong?

[Debbie Abrahams]

My right hon. Friend hits the nail on the head. We must have greater openness and transparency about this and other Government schemes. For universal credit especially, the effect it is having on people now means that we must do the right thing. As I said, the ruling must be complied with.

[Justin Tomlinson (North Swindon) (Con)]

rose—

[Debbie Abrahams]

I shall give way in a moment.

As the ICO ruled, any failure to publish the reports would result in a High Court judgment.

[Wendy Morton (Aldridge-Brownhills) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am going to carry on making these points, if I may.

I understand that, regrettably, the Government have appealed the ruling and are awaiting the outcome of a first tribunal hearing. This is the second time—

[Alex Burghart (Brentwood and Ongar) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am just going to carry on for a moment, if that is all right.

This is the second time in two years that I have brought to the House’s attention Information Commissioner rulings concerning the DWP that the Government have tried to thwart. The first time was when the Government refused to publish data on the number of people who had died after being found fit for work. Those data were shocking and vindicated those who had pushed for their release for several years. They gave cold comfort for the families and friends of those who had died and to those who were still going through the assessment process.

I appreciate that neither universal credit nor the project assessment review reports were initiated under the tenure of the current Secretary of State, but I do urge him to rethink and publish the reports forthwith. Taxpayers’ money must not be used to hide the Government’s embarrassment.

[Ruth George (High Peak) (Lab)]

When the only impact assessment of universal credit we have seen was published five years ago this month, it committed to a post-implementation review within five years and said:

“A comprehensive evaluation programme is being developed for Universal Credit”

to inform and evaluate long-term policy. Are we not now trying to get some crumbs of the evidence the Government committed to providing five years ago and should have provided?

[Debbie Abrahams]

My hon. Friend makes absolutely the right point. I commend her for her work on the Work and Pensions Committee to expose how important it is to get this right.

[Justin Tomlinson]

The hon. Lady is being generous in taking interventions. On the point about transparency, each and every single one of us can at any time visit jobcentres and talk to staff and claimants. I have done that three times and brought a Minister with me to visit, too. The overwhelming response I have had is that universal credit is positive and is making a genuine difference.

[Debbie Abrahams]

I thoroughly agree with the hon. Gentleman that our seeking the publication of these reports does not detract from the valuable work that jobcentre staff are doing under difficult circumstances.

The Information Commissioner’s Office found that

“the withheld information would provide valuable insight into the management of the UCP”—

universal credit programme—

“and allow for greater understanding of what the UCP did to identify and tackle the issues that it encountered.”

It found that the reports we are discussing

“provide a distinct insight into the governance of the UCP and allow for even greater transparency.”

That is in addition to the findings in National Audit Office, Select Committee and Office for Budget Responsibility reports.

The Government’s Budget announcements were a welcome step in the right direction, but not nearly enough. They still need to pause the roll-out of universal credit, not just slow it down, and they need to release the project assessment reviews so that we can fix the multitude of issues that still exist. The reports will help us to understand what needs fixing and how.

[Wendy Morton]

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry, but I am going to continue.

If the Government are so sure that a slow-down will suffice, that they can continue to ignore work incentives, that no changes are necessary before Christmas and that a five-week wait is sufficient, why will they not publish their own workings, as the Information Commissioner has instructed? It is a clear matter of public interest that the Government abide by the ruling of the Information Commissioner and publish these five assessment reviews, and any others in the subsequent period. That will allow the House the proper scrutiny it deserves and shine a light on the implementation failures of the universal credit programme, which have caused so much hardship for so many. I call on the Government to abide by that ruling now.

Universal Credit

Debbie Abrahams Excerpts

Thursday 23rd November 2017 Commons Chamber

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

I thank the Secretary of State for giving me early sight of his statement. There was little surprise when the Government announced reforms to their embattled universal credit programme in the Budget yesterday following months of Labour campaigning, a unanimous defeat on the Opposition-day motion and discontent across the whole House about the rising debt, arrears and even evictions that the social security reforms are causing to so many constituents. We of course welcome any steps to improve the programme, not least the small reduction in the so-called long hello, meaning that those on the lowest incomes will now only be expected to wait five weeks for support to arrive, compared with six under the current design.

Before I address the detail of today’s announcement, let us step back and look at the big picture. The Government introduced universal credit with three promises: to reduce child poverty by 350,000; to simplify the social security system; and to ensure that work always pays. As the mounting evidence has shown, universal credit is not living up to those ambitions. Now it is our task see whether the Chancellor’s announcements meet the Government’s own tests. First, the most immediate matter: the reforms announced today will not be introduced until next year and will do nothing for the tens of thousands who are stuck in the six-week waiting period over Christmas. Anyone who has tried to claim universal credit since Tuesday 14 November will not get their first payment until after Christmas day. That will mean tens of thousands of families going without over the festive period.

Secondly, we are concerned that the Government have decided to remove only a single week from the waiting period, taking it down to five weeks. Under existing Department for Work and Pensions guidance on alternative payment arrangements, claimants should be offered the option of being paid every two weeks, reflecting their previous employment patterns. A report published by the Resolution Foundation has found that 58% of those moving on to UC from work were paid more regularly than monthly. Can the Secretary of State tell us whether there is capacity in the system to offer claimants more regular payments if the Government do not change the payment period to fortnightly as opposed to monthly?

There is no change to the monthly assessment period that is particularly affecting the self-employed, and I want to press the Secretary of State on why that is the case when the current arrangements are clearly so punitive. In relation to the advance payment, we have concerns over the details of the extended repayment period. What additional debt does the Secretary of State expect the average claimant to incur? What does his Department predict will be the average monthly repayment amount deducted from a claimant’s income? Our position remains the same: the social security system should prevent people from getting into debt, rather than making matters worse. It is contrary to the ambitions of universal credit that instead of alleviating poverty, it is going to cause it. It is also an insult to ask people who are unable to make ends meet under the Government’s punitive reforms to bear even more risk, stress and concern.

The Government’s housing benefit proposals are not due to be introduced until April next year, nearly six months after the Budget. Support for rent will be available for the first two weeks of the five-week period before claimants receive their first payment. That will leave a three-week gap, which is still too long for many people to cope with. It will lead to arrears and even evictions, as we have said already seen from the programme.

Finally, this announcement did nothing to restore the key ambition that work will always pay. The swingeing cuts to UC have not been addressed, condemning more disabled people, children and their families to poverty. Taken together, these announcements equate to putting in £1 for every £10 that the former Chancellor cut. In a further nonsensical approach, he has downgraded planned increases to the national living wage, leaving a full-time worker on the minimum wage £900 a year worse off by 2020. Why have the Government failed to give our workers the pay rise they deserve? The Government seem content to leave us with 17 years of pay stagnation.

In summary, these measures for UC are not enough. They must be brought forward, amended and added to. We stand ready to work with the Government to make the necessary changes. Failing that, they should stand aside and let a Labour Government get on with the job.

[Mr Gauke]

Where to start? Let me begin with the point about people having to wait five weeks. People do not have to wait five weeks; they can get a payment within five days. As for the dismissal of an interest-free advance as immaterial, that is just completely unreasonable and wrong. An advance enables people to have control over when they receive their payments. We are making it more generous and giving people a longer period over which to repay it, but we are also making it more flexible by enabling people to get a larger advance if that is what they want and need.

The hon. Lady suggests that we should move towards paying fortnightly, saying that the system should reflect how people’s previous employment packages worked, but only 3% of people in employment are paid fortnightly. If we are to have a system that has the flexibility to cope with people who are out of work moving into work, a monthly approach is absolutely sensible, but we need flexibility in the first assessment period, so that people can get access to money earlier. That is exactly what we are delivering.

The approach of the Opposition Front-Bench team is not one of constructive engagement. They are a roadblock to welfare reform. They have sought to stand in the way of delivering universal credit—[Interruption.] They have just asked for a pause. I am unsure whether we heard a request for a pause from the hon. Lady today, but I would be fascinated to know what they mean by a pause. Do they mean not rolling universal credit out to any new jobcentres, or do they mean stopping any new claimants going on to universal credit at all? I am not quite sure which it is.

[Debbie Abrahams]

I am happy to talk afterwards.

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.

Oral Answers to Questions

Debbie Abrahams Excerpts

Monday 13th November 2017 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right. This is why we are recruiting work coaches up and down the United Kingdom to provide the personalised support that people need to help them get into work. I come back to my experience of meeting work coaches in jobcentres up and down the country. They believe that they have a system in place that is helping them to do more to transform lives, and that is hugely important.

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

One of the original objectives of universal credit was to reduce child poverty. In 2010, the Government said that UC would reduce child poverty by 350,000. That figure was revised to 150,000 in 2013, but last year, Ministers failed to produce a figure in answer to a question from my hon. Friend the Member for West Ham (Lyn Brown). What is the Government’s current estimate of how many children will be lifted out of poverty as a result of universal credit?

[Mr Gauke]

Universal credit gives people a better opportunity to work, and it gives parents, including single parents, greater support with childcare. I come back to the example I gave the House a moment ago. Someone who had previously been on income support and unable to get help with childcare can now get that help and get on to the employment ladder, thanks to universal credit. That is what universal credit is delivering.

[Debbie Abrahams]

That was a really disappointing answer. As we have already heard, the Child Poverty Action Group published data last week predicting that 1 million more children will be pushed into poverty as a result of universal credit cuts, 300,000 of whom will be under the age of five. Another objective of universal credit was always to make work pay. Given that four out of 10 people on UC are in work and will be on average £2,600 a year worse off, when will the Government admit that UC is not fit for purpose or fit to meet the challenges of a new labour market and stop its roll-out?

Supported Housing

Debbie Abrahams Excerpts

Wednesday 25th October 2017 Commons Chamber

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

This has been a comprehensive debate with many good contributions from all parts of the House, if probably more so from the Opposition. There has been a cautious welcome for the Prime Minister’s announcement that there will not be a cap in relation to supported housing and LHA—an issue of real concern.

Among the 25 speakers were my hon. Friend the Member for Sheffield South East (Mr Betts)—the Chair of the Select Committee on Communities and Local Government —and my hon. Friend the Member for City of Durham (Dr Blackman-Woods). A lot of people identified that it was completely inappropriate in the first place to propose that supported housing should be based on an LHA rate, given that it meets very different needs. Several key themes emerged. On the need for sustainability around the funding, my hon. Friend the Member for Oxford East (Anneliese Dodds) mentioned the importance of ring-fencing it, and the need for greater co-operation between Departments. The hon. Member for Waveney (Peter Aldous), who organised the Westminster Hall debate on this issue a few weeks ago, has probably contributed to the position that we are in now.

Many Members wanted to thank local providers and charities. My hon. Friend the Member for High Peak (Ruth George) said that what providers do is more of a vocation—that they do it out of love for it. However, we cannot take advantage of that, and we must recognise it in the support that we give them.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Welcome as the Government’s U-turn is, does my hon. Friend agree that their change of mind barely scratches the surface of the overall crisis in the provision of supported and affordable housing?

[Debbie Abrahams]

I will come on to that. Obviously, we look forward to seeing the detail next Tuesday, but yes, we must not underestimate what is happening.

My hon. Friend the Member for Birmingham, Yardley (Jess Phillips) always makes very pertinent points, but I would like to pick out her comments about Government policy contributing to potentially driving people into refuges because they have no financial support through the single householder.

It is so important that we have had this debate on supported housing after years of uncertainty from this Government hanging over the heads of some of our most vulnerable tenants. The Government’s announcement earlier today is therefore welcome. I want to reaffirm a point that others have made in the course of the debate. The term “supported housing” covers accommodation for a number of different groups in our society, but one thing that binds them all is the degree of vulnerability of these tenants. This form of housing supports older people in sheltered accommodation, disabled people and those with learning disabilities, people at high risk of homelessness, and survivors of domestic violence and their children, as well as armed service veterans, care leavers, and ex-offenders. The importance of what is provided through supported housing cannot therefore be overestimated.

The Government have asked those groups to wait for nearly two years to find out whether their accommodation is secure. Although, as I say, we welcome the Prime Minister’s announcement today indicating that LHA will not be extended to the social or supported housing sectors, my right hon. Friend the Member for Wentworth and Dearne (John Healey) was exactly right to say that the devil is in the detail. He cautioned that whatever comes out of next week’s statement, it must recognise not just that there has been a two-year hiatus for the supported housing sector, but that cuts of half a billion pounds are coming down the line in 2021. We need to have the detail about those proposals, which were in the Red Book and autumn statement last year.

We wait with bated breath, alongside the 700,000 people currently using housing support, to see the adequacy of the supported housing deal. The new deal must recognise that the uncertainty has had an impact on the sector’s capacity by undermining providers’ ability to build. Government inaction has resulted in an 85% reduction in supported housing development, at a time when there is already a shortfall of nearly 17,000 supported housing units. That means that those who one day might need such provision will not have it. I recently visited a refuge that looks after women and children fleeing domestic abuse. As my hon. Friend the Member for Birmingham, Yardley has said, people are being turned away. It is important that we recognise the inadequacy of current provision.

When the Government finally publish their statement on the new approach to supported housing next week, I hope that they will recognise the design flaws in universal credit, which make it totally incompatible with the needs of people who are reliant on supported housing. I am pleased that the Government are bringing to an end the uncertainty about supported housing. I hope that they will also think again about the many other universal credit issues and agree to pause it while we work to fix it.

Over a year ago, the Prime Minister stood on the steps of Downing Street and promised to help the worst-off among us, but there has not been a single achievement. In many cases, including this one, progress has stalled. We could point to the Government’s slashing of funding for affordable homes, the withdrawal of housing benefit from young people or the reductions in local housing allowance for private tenants, which are making sections of the country into places where low-income families simply cannot live. All those measures are short-term attempts to balance the books on the back of the most vulnerable. None of them addresses the root cause of the problem, which is the Government’s total failure to build enough affordable and social homes to meet people’s needs. That problem was recognised by the Secretary of State for Communities and Local Government, although seemingly not by his Chancellor.

I am pleased that today’s statement suggests that the Government are considering the recommendations made jointly by the Communities and Local Government Committee and the Work and Pensions Committee on the future of supported housing. I add my congratulations to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the hon. Member for Gloucester (Richard Graham) on their contribution to that work.

After all, the independent Committees’ report, which was drafted and agreed by Members from all parties, found that supported housing delivered excellent value for money and significant cost savings to the wider public sector, while maximising quality of life. They agreed with us that the Government must introduce a long-term and sustainable funding settlement, but raised concerns about previous proposals to extend the LHA. The Committees jointly suggested that the local housing allowance rate is not an appropriate place to start when determining the funding settlement. There is no correlation, as we have heard, between the cost of providing supported housing and local housing allowances.

Labour supports the Committees’ calls to introduce a new supported housing allowance set at a rate higher than the current cap. Alongside that, we need a separate funding system to safeguard short-term and emergency accommodation, including women’s refuges, and we must ensure that any new funding model does not threaten future supply of supported housing. We will hold the Government to account on their delivery of a new funding model. The next steps are laid out before the Government, and I hope that in their statement next week, they will commit to taking those steps. They should end this two-year impasse now, or stand aside and allow a Labour Government to get on with the job.

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.

Universal Credit Roll-out

Debbie Abrahams Excerpts

Wednesday 18th October 2017 Commons Chamber

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

I beg to move,

That this House calls on the Government to pause the roll-out of Universal Credit full service.

I am delighted that we have secured this vital debate on universal credit, given the concerns across the country and among Members on both sides of the House. I am aware that some 90 people have put in to speak, so I will take only a few interventions from both sides of the House. I will try to get through my key points as quickly as I can.

Our motion calls on the Government to pause the roll-out of universal credit while the issues associated with this key social security programme are fixed. I genuinely offer to work with the Secretary of State for Work and Pensions to fix the many and varied issues associated with universal credit. To understand what needs fixing, we need to understand how we got here. When universal credit was first introduced in 2012, it had the underpinning principles that it would simplify the social security system, bringing together six payments for working-age people in and out of work, and that it would make work pay.

[Nick Thomas-Symonds (Torfaen) (Lab)]

My hon. Friend talks about the underpinning principles. Surely, one of those should be that our social security system should not drive people into debt, yet that is precisely what is happening to my constituents who are waiting months for payments.

[Debbie Abrahams]

Absolutely, and I will go on to make those points in a moment.

Getting back to the principles, we supported those then and we support them now. The Government wanted to pilot the implementation of UC, so they introduced a number of pathfinder areas, including my Oldham constituency, and planned a phased roll-out between 2013 and 2017.

[Mark Pawsey (Rugby) (Con)]

My constituency was also a pathfinder, and since the introduction of UC in 2012, the claimant count in my constituency has halved. Does the hon. Lady think the two issues are connected?

[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.

[Ms Angela Eagle (Wallasey) (Lab)]

I can report to my hon. Friend that I have had exactly the same experience in my constituency, where people are being driven into destitution by the waits for UC. The local food bank, alongside the citizens advice bureau, has estimated that if this full roll-out goes ahead just six weeks before Christmas, leaving everybody destitute for Christmas day, it will have to collect 15 tonnes of extra food to deal with the demand that will be generated by these changes.

[Debbie Abrahams]

This is the reality that people are facing; this is happening in the areas my colleagues have mentioned, and our concern is that, as this is rolled out to 55 areas this month, the situation will get even worse.

[Simon Hoare (North Dorset) (Con)]

rose—

[Debbie Abrahams]

I will give way one last time.

[Simon Hoare]

I am most grateful to the hon. Lady, who is being enormously kind with her time. The motion calls for a pause in the roll-out. Is she going to tell us what the Labour party would do during that pause period?

[Debbie Abrahams]

The hon. Gentleman is pre-empting my speech, but I will happily propose exactly what we would like to do in conjunction with the current Government, whose programme this is.

From the start, there were a number of serious design flaws, which the Work and Pensions Committee, of which I was a member, raised in 2012. They included, first, the fact that UC applications would be “digital by default”; in other words, applications could only be made online. There are still several issues with that, not least the assumption that everyone is computer-literate or has ready access to getting online. We all remember the scene in “I, Daniel Blake” where somebody who had not used a computer before was trying to do so, and we saw the real stress and difficulties he found.

[Helen Goodman (Bishop Auckland) (Lab)]

rose—

[Debbie Abrahams]

I am sorry but I am not going to give way again, as I must try to press on.

Secondly, there were concerns that UC payments would be made monthly, in arrears, and paid only to the main earner of each household, so women, as second earners, are automatically discriminated against in this process; it was also quite a radical change, with rental payments going directly to the household and not the landlord. Thirdly, there were considerable doubts about the use of so-called real-time information, which was meant to ensure that information from employers to Her Majesty’s Revenue and Customs would allow the Department for Work and Pensions to calculate quickly what people in low-paid employment would be entitled to from UC. The reliability and validity of this data exchange was another key concern. I believe there is a DWP RTI issues group, so there are clearly still problems. Finally, the Government said that disabled people would not be financially worse off under UC, but because the severe disability premium payment has not been incorporated into UC, it is an effective loss of up to £62.45 a week for a single person—more than £3,200 a year.

All that was in 2012, but a number of other issues emerged in the following couple of years—universal jobmatch, ballooning costs and of course several delays. One of the most worrying issues revealed in the January 2015 UC regulations was that people in low-paid work on UC will now be subject to in-work conditionality. So, for example, someone who is one of 1 million or so people working on a low-paid, zero hours contract, with different hours from one week to the next, will have to demonstrate to their Jobcentre Plus adviser that they are trying to work 35 hours a week and if they fail to do that to that person’s satisfaction, they can and will be sanctioned. For Members who are unfamiliar with this concept, those people will have their social security payments stopped for a minimum of a month.

Fast forwarding to the 2015 summer Budget, the then Chancellor announced that cuts would be made to the so-called universal credit work allowances, which are how much someone can earn before UC support starts to be reduced. For example, a couple with two children claiming housing costs had their work allowances cut from £222 a month to £192 a month. In addition, approximately 900,000 families with more than two children could not receive support for third or subsequent children.

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

rose—

[Debbie Abrahams]

I am not going to give way again, as 90 people have put in to speak.

The UC equivalent of the family element in tax credits was also abolished. The Government’s equality analysis showed that women and people from black, Asian and minority ethnic communities will be most adversely affected by these work allowances cuts. Let us recall what the principles of UC were and then consider that the Institute for Fiscal Studies stated at the time that the cuts to work allowances meant the principle of making sure work always pays was lost. The Government’s claim that UC is leading to more people getting into work is misleading, as it is based on 2015 data, before the work allowance cuts came into effect.

The current Chancellor’s attempt to redress some of the damage of these cuts by reducing the UC taper rate in last year’s autumn statement has had a marginal effect. Members may recall that he reduced the rate from 65% to 63%, so that for every £1 earned over the work allowance, 63p of UC support is withdrawn. That is a far cry from the 55p rate envisaged when UC was first being developed. On that basis, the Resolution Foundation estimated that some families will lose £2,600 a year because of these cuts.

[Alex Burghart (Brentwood and Ongar) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry but I am not going to give way again, as I need to make progress, with 90 people having put in to speak.

This summer, the Library analysis that I commissioned showed the real-terms impacts on different family structures and for different income groups. It found that a single parent with two children working as a full-time teacher will be about £3,700 a year worse off in 2018-19 compared with 2011-12.

So where are we are up to now? The most recent statistics show that there are currently about 600,000 people claiming UC, over a third of whom are receiving support via the full service. The roll-out of UC over the next six months will see the overall case load rise to just under 1 million, which is a 63% increase. On average, 63,000 people a month may start a new UC claim before January 2018, and by 2022 we expect about 7 million people to be seeking support from the programme. We are at a turning point in the Government’s flagship programme, the roll-out of which is currently being ramped up dramatically.

On top of the design flaws and cuts that I have just mentioned, several other issues have emerged. Perhaps the most pressing is the Government’s decision to make new claimants wait six weeks before they receive any support. Four weeks of that is to allow universal credit to be backdated, plus there is an additional week, as policy, and then a further week waiting for payment to arrive. This “long hello”, as some have called it, is believed to be one of the primary drivers of the rising debt and arrears we are now seeing. Citizens Advice reports that 79% of indebted claimants

“have priority debts such a rent or council tax, putting them at greater risk of eviction, visits from bailiffs, being cut off from energy supplies and even prison”.

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

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry, but I will not.

Half those in rent arrears under universal credit report that they entered into arrears after they made their claim. What is worse is that many claimants do not even receive support within the Government’s lengthy six-week deadline: one in four are waiting for longer than six weeks and one in 10 are waiting for more than 10 weeks. The Government’s so-called advance payment, which is meant to be available to those in need, is in fact a loan that has to be paid back within six months out of future social security payments. I recognise and welcome the Secretary of State’s announcement about speeding that up, but I will explain later in my speech exactly what we might need to tweak.

As we have heard, the measures I have outlined are pushing people into debt, rent arrears and even homelessness. Last year, the National Housing Federation warned that approximately 80% of tenants on universal credit were in rent arrears, with the six-week delay being attributed as the key cause. A few weeks ago, a nurse came into my surgery. She was a single mum who had transferred from tax credits to universal credit. She had the six-week wait, and as a result the arrears racked up. When she came to see me, she had just been served an eviction notice. As universal credit is rolled out, such stories will become more and more common.

The Mayor of Greater Manchester has warned that rough sleeping will double over the winter if the universal credit roll-out continues without its fundamental flaws being addressed. This is not scaremongering; it is based on estimates by local authorities in which universal credit has already been rolled out. Throughout Greater Manchester, the average arrears for people on UC in social housing is £824, compared with £451 for non-UC tenants. It is already having an impact on rising evictions and homelessness—and that is without even going into what is happening in the private rented sector. In addition, the increase in rent arrears for social housing landlords means that less money is available for investment in housing-stock maintenance or the building of new social housing, thereby adding to the existing housing crisis.

The increase in food bank use is another consequence of universal credit delays. Earlier this year, the Trussell Trust reported that referrals for emergency food parcels were significantly higher in a UC area, at nearly 17%, compared with the national average of just under 7%. The trust’s report also highlighted the impacts on the mental health of people on UC, who were described as stressed, anxious or depressed, as they worried about being unable to pay bills and falling into debt.

Who is most likely to be affected and why? Single parents are particularly vulnerable under universal credit. There are now 65,000 single parents on UC. Gingerbread has described how, through

“error in administration and the structure of the system itself, single parents have been threatened with eviction and jobs have been put at risk”.

Gingerbread told me about Laura, who lives with her two sons, one of whom is severely disabled. Laura had to apply for universal credit when her temporary contract at work ended. She had to wait eight weeks for support, and visited a food bank to feed her children. She was not told about advance payments and was struggling with rent arrears. Reflecting on her experience, Laura said:

“it’s very stressful, single parents quite often have enough stress and worry about money; and other things, bringing up your children to start with and it’s exacerbated by this very unfair, very unjust system”.

With child poverty among single parents forecast to increase sharply to 63% by the end of the Parliament, it is vital that we fix the social security system to ensure that it is working. In a forthcoming Child Poverty Action Group report analysing the cumulative effects of social security changes on child poverty since 2010, the section on universal credit highlights its design issues and, in particular, the detrimental impact on single parents. It states:

“Universal credit was designed to be more generous to couples than single people, with lone parents in particular expected to lose out compared with tax credits. This was a deliberate reaction to the decision, within tax credits, to boost support for lone parents in comparison with couples because of their higher risk of poverty and the greater difficulty of increasing earnings from work if you are a lone parent.”

The report goes on to say:

“Since its initial design, universal credit has been subject to a succession of changes and cuts which have substantially reduced its adequacy overall… As a result, it is now less generous than the system it is replacing, and no longer offers the promise of reducing poverty.”

Universal credit is not just affecting single parents; young families and families with more than two children will also fare much worse under UC. Young families going on to universal credit will be affected by the decision to introduce a lower under-25 rate of the standard allowance in universal credit, even for parents with children. As a result, young families will be at increasing risk of poverty, especially if they have a single earner or a second earner working part time. Of course, among other cuts, limiting the child element of support to only two children leaves families with more than three children worse off as well. The report reiterates that as well as being less generous and actually cutting family income, UC fails to incentivise people into work or to progress in work, which are fundamental principles of UC. Shockingly, it has been calculated that, because of the cuts, universal credit will push a million more children into poverty by 2020, with 300,000 of them under five.

[Mr Bob Seely (Isle of Wight) (Con)]

On a point of order, Mr Speaker. The last time that the Leader of the Opposition spoke on this issue, he made a series of entirely unsubstantiated factual claims about housing in Gloucester. Are these further unsubstantiated claims?

[Mr Speaker]

Order. That is not a point of order and it is an abuse of our proceedings. I strongly counsel the hon. Gentleman not to make the same foolish mistake again.

[Debbie Abrahams]

I wonder how that intervention will be seen by those people affected by these issues. Some 900,000 working-age adults will be pushed into poverty, while 900,000 children and 800,000 adults will be living in severe poverty.

Earlier, I mentioned the design issues that are affecting disabled people. This week, I heard from someone who has lost nearly £80 a week—a week—because of their transfer to universal credit after they moved house, ending their ESA claim. When UC was first launched, the Government said they wanted to

“simplify the current complex rules which have been prone to error and complex and confusing for disabled people”

and to replace

“seven different premiums with a simpler, two-tier system that focuses support on the most severely disabled people who are least able to work”.

However, subsequent social security changes, particularly the abolition of the UC limited-capability-for-work element from April 2017, have meant that, instead of a net gain, it is likely that there will be a net reduction of support for people with health conditions and disabilities.

Under this Government, we are seeing unprecedented cuts in support to disabled people, with the consequence that more and more disabled people are living in poverty. The number currently stands at more than 4.2 million; this cannot go on. This is exactly what the UN Committee on the Rights of Persons with Disabilities said is causing a “human catastrophe”.

[Helen Whately (Faversham and Mid Kent) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry, but I will not. As I have said, I am conscious that 90 people wish to speak.

The self-employed are another group who are adversely affected by the Government’s changes to universal credit. We have seen a dramatic increase in self-employed people in recent years: they now make up 15% of the workforce—5 million in total—and account for 80% of the increase in employment since 2008. But 45% of them pay themselves less than the living wage.

As I have said many times, it is absolutely right that we try to design a social security system that can properly support self-employed people and that recognises the fluctuating nature of the labour market for those workers. Sadly, universal credit no longer does so, after the introduction of the minimum income floor, which is an assumed income for self-employed people, found by multiplying the minimum wage on the assumption that self-employed people are working 35 hours a week. One self-employed recipient who contacted me said:

“This system does not allow for the fluctuations in income that are experienced by the self-employed. Surely an assessment made on a year’s profits would be much fairer.”

They went on to say that universal credit will close down enterprise as a route to employment.

Importantly, the Department for Work and Pensions does not average incomes over a year, which leads to issues around holidays, such as Christmas, when the self-employed may take time off. They will be punished for doing so under the Government’s universal credit system. The Federation of Small Businesses has also expressed concerns, saying that it expects major problems for low-income self-employed people to set in at Christmas.

We need to build a social security system fit for the 21st century and to make sure that all workers, employed or self-employed, are afforded dignity and security as work demands fluctuate. We cannot allow the devastating impacts of universal credit roll-out to happen. I reiterate my genuine offer to work with the Government to address the very real concerns about universal credit, particularly its design flaws, the administrative issues and the cuts.

I welcome the Government’s announcement this morning that the so-called helpline will now be a Freephone line. Given Serco’s appalling performance over the past few years and the profit that it has made from the Government contract, it should be paying for the Freephone lines. It is unacceptable that people on the lowest incomes have been paying money that they do not have on phone calls to find out about their claims.

Action must be taken to improve call handler capacity and competence, so that people making inquiries on their claim are not kept on hold or passed from pillar to post. Another key ask is for alternative payment arrangements to be offered to all claimants at the time of their claims. That includes ending the one-week wait and enabling people to have fortnightly, instead of monthly, payments where appropriate with the option of the housing element to go directly to the landlord. Alternative arrangements have already been made available in Northern Ireland and will be introduced in Scotland, so there is no reason why they also should not be available to people in England and Wales.

We need to look at the advanced payments and make them more manageable. A repayment over six months is still creating huge issues for people on the lowest income.

[David Morris (Morecambe and Lunesdale) (Con)]

rose—

[Debbie Abrahams]

I am sorry, but I will not give way.

These are relatively straightforward suggestions. I recognise that reinstating the original level of work allowances and reducing taper rates are less so, but if the Government and the Prime Minister are sincere about tackling injustice in this country and making sure that work pays, they must act. Once again, I commit to working with them on this. We must address the poverty and discrimination that universal credit is causing women, children, disabled people and black, Asian and minority ethnic communities now. This will only get worse as universal credit is rolled out.

This country is at a crossroads. Brexit must not blind this Government to other obligations to their citizens. We must all work together in the national interest to avert the disaster that is about to unfold if universal credit is rolled out without fixings its failings. I urge all MPs to vote with their conscience, stand with us and their constituents and pause and fix universal credit.

--- Later in debate ---

That this House calls on the Government to pause the roll-out of Universal Credit full service.

[Debbie Abrahams]

On a point of order, Mr Speaker. This is a major defeat for the Government on their flagship social security programme. Conservative Whips and the Prime Minister have spent the day strong-arming Conservative MPs to vote against a pause in the roll-out of universal credit, while the Secretary of State has retreated on various aspects of his universal credit policy in a panicked attempt to appease Tory MPs who know that the policy is not fit for purpose.

Yet again, the Prime Minister and the Tories cannot command a majority in the House of Commons. The Prime Minister is in office but not in power. Mr Speaker, have you had an indication from the Prime Minister or the Secretary of State that they intend to come to the House and clarify how they will ensure that the Government implement the clearly expressed will of the House to pause the roll-out of universal credit?

[Mr Speaker]

I am grateful to the hon. Lady for her point of order. The short answer is that I have received no indication as yet that any Minister intends to come to the House to make a statement on that matter, although it is of course open to colleagues to request such.

I should say the following in these relatively unusual—not unprecedented, but relatively unusual—circumstances. There is nothing disorderly about a recorded vote of the House in which there are no Members recorded as voting no. Members who shout “No” when the question is first put must not vote aye, but they are not and cannot be obliged to vote no. As Standing Order No. 39 states:

“A Member is not obliged to vote.”

A Division requires two Tellers on either side and that was the case.

I should add as follows. A resolution of the House of Commons is just that: an expression of the view of the nation’s elected representatives in the House of Commons. This is important and Members need to hear this part of what I have to say. Constitutionally, from my own experience but based also on procedural advice, and as clearly as what I said a few moments ago, the House cannot direct Ministers. It is for Ministers in the Government to decide how to respond to the clearly expressed view of the House. I feel confident that they will do so, bearing in mind the mood of the House expressed in the urgent debate, which I allowed just two weeks ago, on the need for Government respect for the proceedings of the House.