Universal Credit and Debt

Debate between Ellie Reeves and Ruth George

Wednesday 5th June 2019 Westminster Hall

[Ellie Reeves (Lewisham West and Penge) (Lab)]

rose—

[Ruth George]

I will go across the House first.

[Ruth George]

The hon. Gentleman has pre-empted part of my speech. The five-week wait for payments is doing a tremendous amount of damage, putting people into debt right at the start of their claim.

That is not to say that universal credit has not improved—I am sure we will hear a lot about that from the Minister. I pay credit to the Department for listening, and especially to the current Secretary of State, who has made changes beyond those forced on her by High Court cases. However, there is still an enormous amount to do to help people to get by and feel secure with universal credit.

[Ellie Reeves]

A number of my constituents are living below the poverty line, because that is what their universal credit calculation assesses them as being entitled to. It is not surprising that three quarters of those who are in rent arrears are on universal credit, while only one quarter are not. Does my hon. Friend agree that the way we calculate welfare payments to the most vulnerable must be looked at again?

[Ruth George]

Absolutely. As I will come on to discuss, the problem is not only welfare payments, but the deductions made from those welfare payments. People who are already in poverty are having huge deductions taken from their incomes with almost no recourse to justice.

Financial Guidance and Claims Bill [Lords]

Debate between Ellie Reeves and Ruth George

3rd reading: House of Commons & Report: 3rd sitting: House of Commons
Tuesday 24th April 2018 Commons Chamber

[Ellie Reeves (Lewisham West and Penge) (Lab)]

I want to speak to amendments 8 and 9, which, unlike new clause 4, would lead to an outright ban on cold calling by claims management companies.

Claims management companies make and send around 51 million personal injury-related calls and texts each year. Such calls are not only a nuisance; they exploit vulnerable people. It is worth reiterating that solicitors are already banned from cold calling in personal injury claims, but the fact that claims management companies are not risks bringing the sector into disrepute. Cold calling can generate the false perception that obtaining compensation is easy, even where there is no injury. It can put pressure on people to pursue unmeritorious or, at the worst, fraudulent claims, which they otherwise may not do. It may never have been someone’s intention to make a claim, but if they receive a text promising them thousands of pounds, it might seem very tempting.

There is an important context. The Government are proposing to reform compensation rules for whiplash claims and to increase the small claims limit in road traffic accidents from £1,000 to £5,000, and in public liability and employers’ liability claims from £1,000 to £2,000. The Government say that that is to cut down on fraudulent claims and to bring down insurance premiums. However, many, including myself, are concerned that that will have a significant impact on access to justice, with people not being able to access proper legal advice in such claims.

[Ruth George]

Does my hon. Friend agree that a total ban on cold calling, including from claims management companies, would be a much more proportionate response to insurance industry claims of fraud within claims management, and that that should be looked at before any action that will impact on innocent victims of road traffic accidents and employer injuries?

[Ellie Reeves]

I absolutely agree. Surely a better solution to this issue is to have an outright ban on cold calling in personal injury claims by claims management companies, which is exactly what amendments 8 and 9 would do.

New clause 4 gives the single financial guidance body the ability to advise the Government if it considers a ban on cold calling by CMCs to be necessary. If the Government receive such advice, the Bill gives the Secretary of State the power to impose such a ban. However, the Bill does not compel the single financial guidance body to give such advice in relation to cold calling; nor are the Government required to act if they receive advice.

Although the Government have promised decisive action from the outset, I am concerned that the Bill is filled with ifs, buts and maybes and still falls far short of a ban on cold calling. Amendment 8 would commit the single financial guidance body to advise on how best to implement a ban within 12 months of the Bill being passed, and amendment 9 would require the Government to act outright and impose the ban. A ban on cold calling commands support from over two thirds of the population. We must respond to that and strengthen the Bill by agreeing to amendments 8 and 9, to see through a complete and necessary ban on cold calling.