Universal Credit: North-West

Fiona Bruce Excerpts

Wednesday 13th January 2016 Westminster Hall

[Marie Rimmer]

It can take five weeks for people on universal credit to be paid—that is the Government’s aim. If the hon. Gentleman listened to my point, he would know that the report found that 30% of claimants had to wait even longer than the nine-week total. Those people suffer from income deprivation, which is why they are eligible for universal credit and why they are different from those in normal, well-paid work.

The report found that many claimants faced continuing difficulties in getting the right amount, even when their claim had been processed. Basic administrative problems, such as being asked repeatedly for the same documentary evidence, were cited.

[Fiona Bruce (Congleton) (Con)]

The hon. Lady talks about administrative problems, but was not the key problem when we had a Labour Government that many people were left languishing on welfare and given no help at all to find work, some for as long as 10 years? Is that not the key difference from what we now have under this Government? Hundreds of thousands of people are now being supported into work. Is that not better for them, their families and their communities, and for the income that their households earn?

[Marie Rimmer]

No, I do not agree. People knew what was coming and knew that the funds were available. There are 155,000 people on universal credit now, and I am talking about the problems that they are experiencing now. For most people, not getting paid on time will cause at least some level of difficulty. For people on universal credit, not getting paid can be a catastrophe that makes it impossible to manage everyday living and responsibilities such as heating their home, eating, or clothing their children. Increased numbers of people are in rent arrears.

In my experience, there have been other cases of people facing great hardship through the incompetence of the programme so far. Basic work with different agencies has not taken place. For example, one of my constituents was previously in receipt of jobseeker’s allowance and was subsequently moved on to universal credit. Upon going to the dentist he required treatment, which was free under the NHS. When he was filling in the usual form, he was advised to tick the box marked “income-based jobseeker’s allowance”, as there was no box for universal credit. Subsequently, he was billed and pursued by the NHS Business Services Authority and threatened with county court action for a false declaration. If that is the level of co-operation between different agencies at this stage, what hope is there for the future?

I must highlight the DWP’s use of sanctions in the case of universal credit. It has thus far been largely concentrated on those who are on jobseeker’s allowance or employment and support allowance. We have all heard of the cases of people who have had their benefits stopped, often for absurdly spurious reasons such as selling poppies or not searching hard enough for jobs on Christmas day—that is true. We have come across many tragic cases of constituents who are literally starving and unable to turn on their heating because they have no money. Sanctions are sometimes imposed for the crime of arriving only a few minutes late for a jobcentre appointment following a hospital appointment.

There is no confidence in the current sanctions regime. It is both incompetent and brutal. There needs to be a full and independent review to restore some kind of confidence in the whole system. It is therefore completely irresponsible to expand the use of sanctions under universal credit to claimants in work.

Conditionality of benefits is being trialled for some of the in-work elements of universal credit. The New Policy Institute published a report into sanctions last year, which said:

“The expansion of conditionality under Universal Credit could see a substantial increase in sanctions: if sanctioning occurred at the same rate as for JSA claimants, then the number could almost double, with an additional 600,000 sanctions.”

It is surely inconceivable that people in work could be left in such a situation because of a Government policy that is supposed to support them for doing the right thing, but that is what will happen unless the Government think again.

To say the least, there has not been a smooth transition to universal credit for people in the north-west region. I do not have enough time to outline the range of problems that we have faced as a result of being the guinea-pig region for the Secretary of State for Work and Pensions.

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[Graham Evans]

I absolutely agree with my hon. Friend; he hits the nail on the head. This change is about enabling people to stand on their own two feet and to get away from the welfare culture that grew under the 13 years of the previous Labour Administration. When Labour introduced tax credits, they were going to cost £4 billion; the figure is now £30 billion. That is simply unaffordable. As a nation, do we pay money to people for not working or do we encourage them to stand on their own two feet and get a job? And as I say, the tax incentive means that people can earn about £1,000 a month before paying tax, because Conservatives believe that people should keep more of their earnings.

[Fiona Bruce]

Perhaps it is also good to remember that this Government are going to double the amount of free childcare to 30 hours a week, which for working parents of three and four-year-olds is worth about £5,000 a year per child. More than that, even for those on universal credit there is help. Universal credit currently covers up to 70% of eligible childcare costs, but from April that will increase to 85%. That is a huge difference, worth £1,368 per year for every child.

[Graham Evans]

I am most grateful for that intervention; my hon. Friend makes a very powerful point. As I have said, jobcentre staff say that the changes that the Government have introduced to simplify welfare and benefits, and the incentive to work, enable those people who are unemployed to get into work quickly. And for long-term unemployed people who have been on benefits for many years, there are now clear incentives to get into work, because they will keep more of the money they earn; universal credit enables them to keep more of what they earn.

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[Yvonne Fovargue]

I do not disagree, but in the meantime people should not be penalised by having to seek help to claim the universal credit benefit because it is digital by default. If they want help to claim, there are agencies that can help, but there is often a delay in receiving an appointment for that. People should not be penalised because they have to wait to claim universal credit simply because they do not have access to a computer. That is another issue to look at.

When claims are refused, people are sometimes confused about why. Again, a helpline number—an 0800 number—would be extremely helpful for those people. When it gets complicated, there should be a named person to help them. I do not think anyone would disagree with the idea that we want to make the system as simple as possible. We know that people’s lives are complicated and that they move in and out of work, particularly those in low-paid work. Anything that makes the transition more simple should be looked at carefully.

[Fiona Bruce]

The hon. Lady has made a number of valid points, and I have great respect for her. We worked together as councillors on Warrington Borough Council and I know that she has in-depth knowledge of the subject, beyond that of many Members, but as I understand it, as part of universal credit a named personal contact is now being offered to help individuals to seek work, as well as to ensure that they access the right benefits.

[Yvonne Fovargue]

Although there is someone available to help them to seek work, I am looking for someone to help when things go wrong—someone with a detailed understanding of the universal credit system, not someone who perhaps has more knowledge of the work environment. People need someone to talk to about the complexities of the universal credit system and how it relates to council tax benefits and local authorities—all the major issues—rather than simply a work adviser.

Trying to make things simpler with universal credit is a laudable aim. We need to look at what has happened in the pilots and how the system can be made to work. I cannot finish without also saying that we need to look at how universal credit can incentivise people to work, which is certainly not done by cutting the work allowance and giving people less incentive to find work.

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[Fiona Bruce]

The hon. Gentleman has reeled off reams of statistics during his speech, but the key statistic is the legacy of the previous Labour Government: nearly one in five households in our country had no one working at all. That in no way brought dignity to those households, those families or their communities. Should we not be addressing that statistic as a priority?

[Neil Gray]

Where people are capable of working, it is right that we should encourage them to do so. However, the problem with the changes that the Government are implementing through universal credit is that they are removing the work allowance, which is the only incentive to work in universal credit. It underpins the incentive to get into work and to remain there. Taking that away removes the premise that work should pay, which is a sad situation.

The DWP has said that universal credit will be simpler for claimants and will be treated like a wage for individuals, readying them for work. In reality, there are complex problems that will ultimately see less money in people’s pockets and more difficulties accessing adequate financial support. Analysis of the autumn statement by the IFS found that the benefit system is still much less generous in the long run, pointing out that universal credit now represents an additional cut on top of other changes, including the cut to benefit entitlement, of £3.7 billion a year in the long run. Some 4.5 million working families will be affected by the introduction of universal credit, and 2.6 million will lose an average of £1,600 a year.

This is where I must disagree with the hon. Member for Weaver Vale (Graham Evans) and where he missed the point in his contribution. People are being encouraged into work, which is right for those who can work, but removing the work allowance aspect of universal credit takes away the only incentive to work. He also made the point that the social security system needs to be fair for those who pay for it, but he perhaps forgets that those in receipt of the universal credit work allowance are in work.

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[The Minister for Employment (Priti Patel)]

It is a pleasure to serve under your chairmanship this morning, Mr Nuttall.

I congratulate the hon. Member for St Helens South and Whiston (Marie Rimmer) on securing the debate and on her contribution. I thank all Members present for their good, strong and wide-ranging contributions, including my hon. Friends the Members for Weaver Vale (Graham Evans), for Congleton (Fiona Bruce), for Cheadle (Mary Robinson), for Bolton West (Chris Green) and for Ribble Valley (Mr Evans) and the hon. Members for Stalybridge and Hyde (Jonathan Reynolds) and for Makerfield (Yvonne Fovargue), to name but a few. I hope to cover many of the points they raised.

The debate has been interesting because of its content and the nature and variety of the issues raised. My opening remarks, however, will focus on what the hon. Member for Torfaen (Nick Thomas-Symonds) said. I, too, welcome him to his new role. He rightly highlighted language and its use, which are incredibly important when discussing people, welfare, benefits and access to welfare. However, I do not accept his assessment that the Government use divisive language. I do not see the Government’s focus of ensuring that work always pays and that Britain moves from being a low-wage, high-welfare and high-tax society to being a higher-wage, lower-welfare and lower-tax society as divisive. Nor do I see as divisive the language used by the Prime Minister this week when he announced our life chances strategy, which is to do with this very issue of welfare and transforming people’s lives.

This Government and the Conservative party are focused on helping people with multiple barriers to their life chances, or with difficulties in life, so that they can get back into work or secure their routes to employment, which the debate has touched on. Importantly, we are securing the right kind of opportunities for all individuals. That is the right thing to do and is what all hon. Members seek to do when they are elected as Members of Parliament to represent their constituents.

[Fiona Bruce]

I am sorry to interrupt the Minister when she is in full flow, as she often is. Will she clarify one point that arose earlier in the debate when the hon. Member for Makerfield (Yvonne Fovargue) spoke about a “named contact”? I confirmed that, under universal credit, as I understood it, a named personal contact will not only act as a work coach, but also, according to the Under-Secretary of State for Disabled People in a debate on 6 January,

“help them to deal with their individual case when they are navigating complicated benefit systems”.—[Official Report, 6 January 2016; Vol. 604, c. 302.]

Will the Minister confirm that the named contact will supply the support necessary for people both to access their benefits and to get into work?

[Priti Patel]

My hon. Friend is absolutely right. Claimants have access to personalised and dedicated support via a named work coach. Indeed, I have been to many of our jobcentres and sat in on universal credit interviews with claimants and work coaches. There is additional support available for claimants who require help with housing and other benefits, arrears payments or even budgeting.

It is therefore worth highlighting how much our welfare system has moved on, compared with the complex and distorted system that existed previously. Many years ago we had a number of benefits but, fundamentally, universal credit has rolled six benefits into one to streamline our system and to make it less complicated. The more complex a benefits system is, as we saw in the past, the more difficult it becomes to support individuals—they spend more time navigating the system than looking for or being supported into work.

All that goes back to some of the fundamental principles of the universal credit: it can support individuals and families not only in having a job, but in their journey to employment. Once they are in work and achieve sustained employment, they get support to secure long-term employment or to work more hours, which removes the barriers that existed under the previous system.

As we have said, universal credit supports individuals to make progress into work in particular. Yes, people are supported by the wages that they earn and benefits they receive at the same time, but, unlike in previous systems, we do not have the barrier of a 16-hour work requirement that may have caused people to restrict their working in order to avoid losing benefits. That is part of the changes brought in by universal credit, which stays with the claimants when they move into work and gradually reduces as their earnings increase. Therefore, people—in particular those on low incomes—do not lose their benefits all at once.