Labour Market Activity

Geraint Davies Excerpts

Tuesday 28th February 2023 Commons Chamber

[Jonathan Ashworth]

My hon. Friend makes an important point. I also see that phenomenon every day in my Leicester constituency. There are people who want to work, and who could work if given the right help and support with the English language—particularly women from Bangladeshi and Pakistani-heritage communities—but, because of the cuts that have made ESOL more difficult to access, they are not being given that support and help.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Is my right hon. Friend aware of the study by the Office for National Statistics showing that there could be a significant increase in the overall levels of employment and productivity if there were greater encouragement to work from home, particularly for women who are having to choose between caring and working? They face a cliff edge, but they want to do both. Why are the Government not doing something about that?

[Jonathan Ashworth]

My hon. Friend, typically, anticipates a point I will be making later, but it is clear that certain members of the population could be encouraged to return to work if the correct flexible option was in place, along with appropriate help with childcare or indeed social care. Many people are caring for loved ones—parents and so on.

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[Mel Stride]

The hon. Lady points to an issue that is a focus within the Department. We have taken on more staff, and we are in the process of taking on still more staff. We are also looking at processes and, in the longer term, examining processes that will increase the rapidity of supply of that particular set of support.

I will now turn to where the motion is clearly so wrong.

[Geraint Davies]

A moment ago, the Secretary of State claimed that 500,000 more people are in payroll employment than before the pandemic. Am I not right in saying that the Office for National Statistics says that 400,000 fewer people are in overall employment, because the payroll does not include the massive reduction in self-employment that he has so briskly avoided noticing? Will he now set the record straight: 400,000 fewer people are now in work overall than before the pandemic?

[Mel Stride]

I think it is the hon. Gentleman who has misunderstood what has been said here. There is a distinction between payroll employment, which is clearly those who are on PAYE employed by an employer, and somebody who is self-employed, which is a totally different matter. The statistic, or the fact that I presented, was simply that the level of payroll employment is currently at a record high in this country.

Underpayment of Benefits: Compensation

Geraint Davies Excerpts

Thursday 13th January 2022 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Minister will know that the UK was found to be in breach of the human rights of people with disabilities by the United Nations special rapporteur on extreme poverty and human rights. He will know that some 7 million people live in food insecurity and food poverty in Britain. In Wales, we earn only 70% of the UK average, so thousands of vulnerable people in Swansea have been hit by this. Will he ensure not just that those people are paid, but that payments are made to charities for disabilities, and that we look again at universal credit uplift and perhaps a universal basic income so that the poorest do not continually fall through the net during the cost-of-living crisis?

[David Rutley]

I think I have highlighted what we are going to do in response to this particular situation. The hon. Gentleman makes some other points about what we are doing on food security and for those vulnerable people. As he knows, we have created an additional support fund—in England, it is called the household support fund—of £500 million across the UK. A chunk of that money—around £21 million, from memory; it is over £20 million anyway—has gone to Wales, and the Welsh Government are using it to help vulnerable people. We recognise that there are people who need further support.

On universal basic income, people who have tried that out—ask the Finnish Government—said that it is not the way forward; it is untargeted and does not provide a work incentive. I do not think it is the way forward. Of course, we can always improve our welfare approaches, but that is not the approach that would help.

Oral Answers to Questions

Geraint Davies Excerpts

Monday 17th May 2021 Commons Chamber

[Mr Speaker]

Order. Let us go to Geraint Davies.

[Geraint Davies (Swansea West) (Lab/Co-op) [V]]

Every day, 7.6 million people go without sufficient nutritious food, according to the Environment, Food and Rural Affairs Committee, so will the Secretary of State look carefully at the Welsh Government’s pilot for a universal basic income, and will she provide an estimate for the cost of a UK roll-out of a universal basic income?

[Dr Coffey]

Ah, my favourite question on UBI. The answer is no. If the Welsh Government wish to use the extra money they receive through the Barnett formula to undertake other aspects, the question is whether it is within their legal powers to do so. I am conscious that we all want to make sure that food insecurity comes to an end, and that is why we are working across Government to tackle it.

Oral Answers to Questions

Geraint Davies Excerpts

Monday 29th June 2020 Commons Chamber

[Justin Tomlinson]

I thank my hon. Friend for raising this. I know that he has campaigned hard on the matter. We are reviewing all areas. The key three themes are: the six months and not having the status quo; improving consistency; and raising awareness to ensure that all those who will benefit from the special rules know what is available.

[Geraint Davies (Swansea West) (Lab/Co-op)]

If she will hold discussions with the Secretary of State for Environment, Food and Rural Affairs on trends in the level of food insecurity among the poorest communities since the start of the covid-19 outbreak.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

I regularly engage with my counterpart in DEFRA, the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Banbury (Victoria Prentis), on this issue and participate in the food and essential supplies to the vulnerable ministerial taskforce. In addition to welfare changes worth more than £6.5 billion, Departments have worked together throughout this period to ensure support for the most vulnerable. Funding of up to £16 million, including the £3.5 million food charities grant fund, is available so that charities can continue to provide food for those in need.

[Geraint Davies [V]]

The Food Foundation has found that 5 million adults and 2 million children suffer from food insecurity, which the United Nations defines as insufficient nutritious food each day to avoid hunger. The 2019 national food strategy was shelved because of coronavirus. What plans has the Minister to introduce more money for those most in need so that we do not have growing numbers of people relying on food banks and to prevent millions more from being plunged into hunger in the event of a second wave of coronavirus and a bad or no deal Brexit?

[Will Quince]

Over and above the £6.5 billion we have pumped into our welfare system, there is the more than £16 million for food redistribution charities, the £3.5 million for the food charities fund, which offers grants of up to £100,000 to support those charities, the £63 million local welfare assistance fund through local authorities that the Prime Minister announced two weeks ago and, of course, the free school meals voucher scheme. However, the hon. Gentleman raises a good point. We want to better understand food insecurity in this country. That is why we commissioned extra questions for the family resources survey. I look forward to looking at the results of that in great detail.

Disability Support

Geraint Davies Excerpts

Wednesday 19th December 2018 Commons Chamber

[Helen Goodman]

My hon. Friend expresses it very well. I did not know the statistics relating to Wales. Wales and Durham are obviously having a very similar experience, which is perhaps not surprising as Wales is another area where people are coping with a heavy industry legacy.

[Geraint Davies (Swansea West) (Lab/Co-op)]

In Swansea, some of the most vulnerable people are going through the most dreadful anguish and anxiety. They are chronically ill, yet they think they will not end up with benefits. Is that not part of a wider strategy to squeeze the poorest and most vulnerable to pay for the bankers’ greed, which led to the 2008 financial crisis?

[Helen Goodman]

It is extraordinary that the Government have been able to find the money to cut inheritance tax for the richest, but they cannot find money for people with disabilities and mental health problems.

As my hon. Friends have said, the stress and distress caused, particularly to people with mental health problems, are a serious problem. People are put into a situation of tension because they do not know when or whether they are going to be reassessed. I have constituents who are concerned for their family members’ wellbeing, because they get so anxious and cannot face the work capability assessments.

Let me now turn to the problem of ESA. The hon. Member for Ayr, Carrick and Cumnock talked about how we need to encourage and support people back into work. That is indeed true, but the fact is that, from the point of view of an employer, employing people with disabilities means higher employee liability insurance, it very often means adjustments at work and there is simply no incentive for people—[Interruption.] The Minister is saying, “Rubbish” from a sedentary position. Would he like to come to the Dispatch Box and tell me why that is rubbish?

Universal Credit

Geraint Davies Excerpts

Wednesday 17th October 2018 Commons Chamber

[Neil Parish (Tiverton and Honiton) (Con)]

We all believe in universal credit, but we also realise that it deals with some of the people in society who are most challenged with their income. It is about ensuring that we get the money to them quickly and listen to what is happening. I believe that we are, but we need to carry on listening to what is happening.

[Geraint Davies (Swansea West) (Lab/Co-op)]

On a point of order, Madam Deputy Speaker. The Member who just spoke has only just come in. There is very limited time—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We are not wasting time on spurious points of order, because I want to try to get as many people in as possible. I call Richard Graham.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

Previously we had a sophisticated social security system that targeted benefits at those in need. I appreciate that there were issues, but the problems of tapering could have been sorted out within the system.

Universal credit combines three massive computer systems—the Inland Revenue system, the jobcentre system and local council systems—and, inevitably, it will not work. We know the history of public sector computer systems going wrong at the Passport Office, with child benefits and within the national health service. Pushing three computer systems together simply will not work. The whole system is a way of cutting corners and cutting benefits for the most vulnerable.

Universal credit should be scrapped, because it simply will not work. In Swansea and elsewhere it has led to sleepless nights, empty stomachs and shivering families. It is leading to poverty and despair. I believe it is simply a Trojan horse for further cuts. There are already 4 million children in poverty, and another 1 million will be in poverty by 2020. The number of claimants in Swansea has increased by 50%, year on year, to nearly 2,000.

The idea that we have all these jobs, and the like, is not true. In fact, the Government have created part-time jobs or zero-hours jobs from full-time jobs. There are 400,000 fewer people earning over £20,000 than in 2010. The idea that everything is working is not true, and the most impoverished are taking brutal cuts to pay for the bankers’ greed and irresponsibility.

Universal credit is completely wrong. It should be scrapped, and we should go back to a more sensible system.

Pensions Auto-enrolment

Geraint Davies Excerpts

Wednesday 28th February 2018 Westminster Hall

[Several hon. Members rose—]

[Geraint Davies (in the Chair)]

Order. As four Members wish to speak, you each have about five minutes. I call Nigel Mills.

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[Jeremy Quin (Horsham) (Con)]

I am grateful for the opportunity to speak, Mr Davies. I am most grateful to my hon. Friend the Member for Chippenham (Michelle Donelan) for calling this debate. Too often, we come to the Chamber to have a good moan about things, but I sincerely hope that we have cross-party agreement today. Auto-enrolment should be warmly praised on both sides of the House, because it has been a great success. Some 19 million people are now enrolled in qualifying workplace pensions, 9 million of whom came through auto-enrolment. That means that we have increased by a quarter the percentage of the population who are in qualifying schemes. That is a success on any terms.

In addition to the policy being a success, its execution has been a success. My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) was too modest to refer to his role in that, but a succession of Secretaries of State, both Conservative and Labour, oversaw the successful introduction of a good policy. For 1 million employers to be part of the scheme—including, I am proud to say, 1,860 in my constituency—and for opt-out rates to be as low as they are is a success.

I will dwell on that success for just a second longer while I talk about the long-term implications of what we have done. It is estimated that by 2019-20 an extra £20 billion a year will be being saved in pensions, which will ensure that people have a more comfortable retirement than would otherwise have been the case. There is more success in the small print: the biggest increase in participation has been among those on lower incomes and those working for smaller employers.

Unfortunately, as we are all aware, that is not the end of the story. We have had such positive buy-in from employers that, like other Members, I am nervous about the increase in the contribution rate to 3% in April 2019, but that is clearly a risk we have to take. If we cannot take that risk and push that envelope at a time when we have record rates of employment, there will never be a time for it. Even from there, as has been alluded to by my hon. Friend the Member for Chippenham and by my right hon. Friend the Member for Preseli Pembrokeshire, a savings rate of 8% will still leave 12 million individuals undersaving for their retirement.

We all know the huge power of inertia. There is a real risk that if people are told that is what they have got to save, they believe that is what they need to save, but we in this House know that that is not the case. The evidence from Australia and elsewhere is that higher rates will be required. I welcome the scheduled review of contribution rates. It may be difficult and painful, but it is necessary. I also welcome some of the other proposed reforms over the next few years that have been alluded to, such as lowering the relevant age from 22 to 18, bringing an extra 900,000 workers into the scheme, and removing the lower earnings limit, which will add nearly £3 billion a year to benefit in particular lower earnings workers, those with a part-time job and those with a number of part-time jobs.

My hon. Friend the Member for Chippenham eloquently described the issues faced by the self-employed. I agree that a participation rate in that growing sector of 19% is far too low. That is rightly a matter of concern. She produced some interesting ideas, and I look forward to the ministerial response. She and I would agree that there needs to be a structure in place for the self-employed. Again, it comes back to default and inertia: as long as there is no structure in place, they will not feel a need to go in, participate and make the provision for retirements that they require.

Many good things are coming out of the review. Of course, I have extra questions to ask my hon. Friend the Minister. Has the Department made an estimate of the number of individuals with earnings below the trigger rate of £10,000 per annum who are opting into the scheme? That would be good to know, to work through whether the scheme can be usefully extended below that rate. Opt-out rates are particularly low, but less so for small and micro-employers. Is that a matter of concern for the Department? What is it doing to address that?

My hon. Friend the Member for Amber Valley (Nigel Mills) referred to the need to understand the position and what can be done about it. I would love to hear more from the Minister about the pensions dashboard, which he referred to in his intervention, which I want to see extended to cover not just pensions but more assets. I also want to hear more about the mid-life review. My hon. Friend the Minister is a mere spring chicken, so he may not be under any personal time pressure to implement a mid-life review, but an MOT, as recommended by John Cridland, would be an excellent way to help people, as the Minister said, understand where they stand.

[Geraint Davies (in the Chair)]

I call Paul Masterton— I think you have got time for your pension.

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[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Chippenham (Michelle Donelan) on initiating this debate and on a thoughtful and challenging contribution, with some ideas in it that I shall come to later.

Forgive me if I say that the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) was right: auto-enrolment is a testament to what the last Labour Government did in initiating the Turner review and putting the wheels in motion for auto-enrolment to be implemented. As I have often said to the Minister, it is deeply welcome that there has been continuity of policy. He said only yesterday in his address to the TUC that, on issues such as pensions, continuity wherever possible is absolutely critical.

I was personally involved in some of the discussions with successive Secretaries of State and with Adair Turner, and the basis that was laid and the point we have reached now are both very welcome indeed. It has led to a better workplace pension landscape than before, with an additional 10 million workers estimated to be newly saving or saving more as a result of auto-enrolment. It has led to an additional £17 billion of pension savings being put away, mostly by low-income workers. We welcome the move by the Government to reduce the age of eligibility for auto-enrolment to 18, as that should lead to more people becoming aware of the importance of pensions at a younger age. The sooner that is introduced, the better.

However, for all the welcome progress that has been made, it is not a perfect system and there are issues that need to be addressed at the next stages to make the pension landscape better. First, the threshold over which workers are automatically enrolled is too high. According to the latest statistics from the Department for Work and Pensions, 37% of female workers, 33% of workers with a disability and 28% of black and minority ethnic workers are not eligible for master trust saving through auto-enrolment.

Secondly, auto-enrolment does not cover the self-employed or workers in the gig economy. The impact is felt in particular by female workers, workers with disabilities and black and minority ethnic workers, who are over-represented among low earners, the self-employed, those with multiple jobs and carers. That is why it is absolutely necessary, as the Taylor report recommended, to redefine workers in the gig economy as employees, meaning that they would be eligible for auto-enrolment. As Matthew Taylor said, if it looks like employment and smells like employment, it should be employment.

Having said that, the statistics outlined in various contributions today are stark. Self-employment, and in particular bogus self-employment, are becoming increasingly prominent in the modern economy. Figures released last year suggest that the number of self-employed workers in the UK rose by 23% between 2007 and 2017, from 3.8 million to 4.7 million. That represents a dramatic shift in the nature of the world of work and the way in which the British economy works.

Self-employed people now represent around 15% of the workforce, and 91% of businesses say that they hire contractors. The latest figures from the Office for National Statistics show that only 19% of the self-employed are saving into a personal pension. That is a worrying trend, and more needs to be done, not least because those concerned face decreased security in their current working practices and in their retirement. That is why the hon. Member for Chippenham was absolutely right—dare I say it?—to bang on about this and to call for a detailed review at the next stages. I would strongly support that. That issue needs to be tackled because of the changing nature of the workplace.

Thirdly, as stated earlier, the advent of auto-enrolment has increased the number of workers saving for retirement, with more active savers now in defined contribution pension schemes rather than defined benefit schemes. While the overall trend toward a greater number of savers is positive, we do not want to see a growing threat posed to DB schemes. It was never intended that auto-enrolment should become a bolthole for employers seeking to move away from historic DB schemes. Indeed, I thought what the Minister said yesterday to the TUC conference was absolutely right—he said that DB is working well notwithstanding a whole number of problems, and that where employers can, they should continue with their responsibilities. I strongly agree with him.

Fourthly, the rise in the number of pension savers is a step in the right direction, but DC plans must continue to evolve in order to provide savers with an adequate pension. A report by the Pensions Policy Institute in 2016 found that the median saving of DC scheme members could yield only £3,000 per year as an annuity, which is not a lot of money. That therefore demands action at the next stages and on a whole number of fronts: more work, for example, needs to be done to improve the adequacy of returns on DC savings, including looking in greater depth at costs and charges. On the 8% target, it is clear that, for the current proposed automatic contributions—I stress again that they are a welcome step in the right direction—8% should not be the summit of our ambition as we look ahead over the years to come. I take the point from the hon. Member for Chippenham that we should get the balance right so that we do not impose unreasonable burdens as we progressively move forward. However, I stress again that 8% should not be the summit of our ambitions.

On how one might have the best possible DC arrangements, there is an interesting debate going on around collective defined contribution pension schemes and what is being proposed by both Royal Mail and the Communication Workers Union. We have been engaged in constructive discussions with the Government on opening the door for such arrangements to be introduced at the next stages. However welcome it is, I stress again that 8% is not enough, and we therefore need to look at several things, including transparency, costs and all those things that would make a difference.

More workers having access to a pension pot is welcome, but I refer to what my hon. Friend the Member for Weaver Vale (Mike Amesbury) said earlier: it is vital that there is greater knowledge about pensions. To that end, the Government have the opportunity, through the Financial Guidance and Claims Bill, which is welcome, to increase the provision for financial education.

[Geraint Davies (in the Chair)]

I was hoping to allow the Minister about 10 minutes in which to speak.

[Jack Dromey]

In which case I will finish in about 90 seconds. Financial education is at the heart of that Bill, which is welcome. The role of the new single financial guidance body will also be important.

Auto-enrolment has been positive for the workplace pensions landscape in this country. It needs extending and improving—of that there is no doubt—to give workers greater security in retirement, but it is a strong and welcome step in the right direction, and it is deeply welcome that there is cross-party consensus.

Pension Equality for Women

Geraint Davies Excerpts

Thursday 14th December 2017 Commons Chamber

[Grahame Morris]

The fundamental point, which has also been made by Government Members, is the lack of notice about the 1995 changes, and in some cases, the failure to give any notice at all. There is an issue of communication. A number of groups are campaigning on this issue, and there is a general acceptance of the need to equalise state retirement pension age—I do not think there is dispute about that and we are in agreement on it. The issue is the phasing, and the acceleration of that phasing in of the original changes in 1995.

[Geraint Davies (Swansea West) (Lab/Co-op)]

My hon. Friend is making a marvellous speech and I do not want to disagree with him. Does he agree, however, that the equalisation of the pension age for this group of women is not fair? In the era in which they worked, many were responsible for the children and had to undermine their career; they had lower wages and did not make allowances for their pensions. Some have since suffered divorce or a break up, and many of those who come to me in Swansea are becoming impoverished because of this change. It is all very well imagining a future utopian world where there is equal opportunity that justifies an equal pension age, but that is not what has happened to these women. It is quite wrong to say that this issue is just about how they were told about the changes.

[Grahame Morris]

Absolutely. These women are falling off the edge of a cliff owing to the lack of transitional relief. There are many examples of women who made plans to retire at 60 to care for elderly relatives, and of women who worked in arduous, physically demanding employment who really cannot work beyond 60. This huge injustice affects 3.8 million women in this country, and it really needs to be addressed.

Oral Answers to Questions

Geraint Davies Excerpts

Monday 13th November 2017 Commons Chamber

[Sarah Newton]

My hon. Friend is quite right to point out the unfair discrimination against people with disabilities in this country who really want to make a contribution to society and who really do want to work. We are doing everything we can, including working with employers through the Disability Confident campaign and providing people seeking employment with the tailor-made support that they need to play their full part in society.

[Geraint Davies (Swansea West) (Lab/Co-op)]

8. What steps his Department is taking to respond to and implement the recommendations in the concluding observations of the UN Committee on the Rights of Persons with Disabilities, published on 3 October 2017.

[The Minister for Disabled People, Health and Work (Sarah Newton)]

The UK continues to be a global leader in disability rights, and we are committed to further improving and progressively implementing the convention. We are considering the committee’s recommendations and will provide an update on the progress that we are making in the next year, as requested by the UN.

[Geraint Davies]

The UN found that UK cuts disproportionately hit people with disabilities and fundamentally, systematically and gravely undermine their human rights, so will the Minister ensure today that personal independence payment, employment and support allowance and universal credit are all brought into line with the UN conventions on fundamental human rights, so that people are treated fairly and with dignity, instead of with discrimination and cruelty?

[Sarah Newton]

This country has a proud record of treating people fairly, and we will continue to uphold those proud principles. Of course we are considering the report, and as I have said, we will publish our findings. To put this in context, of the G7 only Germany spends more money supporting people with disabilities and long-term conditions. We spend 2.5% of GDP, which is 6% of all Government spending. That is £50 billion a year.

Universal Credit

Geraint Davies Excerpts

Wednesday 19th April 2017 Westminster Hall

[Catherine McKinnell]

I take on board the hon. Gentleman’s serious concerns and, indeed, implore the Government to get this process right before they roll it out across the country.

There are also some fundamental flaws in the system. The fact that payments are made monthly and in arrears effectively embeds debt into the system—as landlords awaiting receipt of the housing benefit element of universal credit know all too well—and requires repeated applications for advance payments from DWP and/or budgeting skills, which many people sadly do not have. Indeed, the Joseph Rowntree Foundation recently commented:

“People risk debt, destitution and eviction while they wait…to receive their first UC payment”—

a description that surely belongs in the world of Charles Dickens, rather than in the modern, fit-for-purpose and efficient social welfare system that we should have in 21st-century Britain.

So what was the DWP’s initial response to the increasing number of complaints about universal credit claims? In a letter dated 20 January 2017 and addressed to

“Colleagues working in the welfare advice sector”,

MPs in full service universal credit areas were informed that they could not receive any information about a constituent’s case unless the constituent in question had provided online explicit consent directly to the DWP. The letter stated that such consent

“must be given freely, unambiguously and in an informed way. The claimant must be clear on the information that they want to be disclosed and who the information can be disclosed to…Consent does not last indefinitely, but covers a particular query or piece of business.”

Even when I had been sent an email by a constituent that provided me with all the details of their case and that specifically asked me to intervene on their behalf—usually because they had reached the end of their tether —that was not deemed sufficient proof for the DWP to provide me with information about the case. I am, of course, pleased that that ridiculous situation has now been reviewed, after complaints by many hon. Members and an intervention by the Leader of the House, but I must emphasise that it caused weeks of additional challenge for my constituents and for my caseworkers in Newcastle, who were deluged with universal credit cases but could not receive any sensible information about them.

The Minister need not take my word for the problems that people face in Newcastle. He can come and visit the Newcastle citizens advice bureau, for which the DWP’s explicit consent edict remains in place. He can hear about the 85 universal credit clients from Newcastle upon Tyne North alone that the bureau has supported in the last year, who have faced severely delayed payments and, in the bureau’s words,

“unnecessary hardship through no fault of their own”.

They face that hardship because of difficulties in finding or accessing a computer, failure of jobcentre staff to provide information about advance payments, incorrect information held on claimants’ records, incorrect advice being provided by jobcentre staff, and incorrect payments being made.

Alternatively, the Minister can come and meet staff from Your Homes Newcastle, the arm’s length management organisation responsible for managing Newcastle’s council housing stock, to discuss the significant level of support that they are having to provide to tenants through the universal credit process. Indeed, Your Homes Newcastle has highlighted that it and Newcastle City Council have so far provided support to 506 people,

“specifically to help those who may be unable to manage monthly payments or don’t understand UC and need explanations at the very start of their claims. The time taken to support customers in personal budgeting varies between 2 and 15 hours of support, although there are some exceptional cases where this can take considerably longer. The average time per case is currently 3.5 hours and this is carried out by staff co-located at Jobcentres. The cost of placing three staff in Newcastle Jobcentres to provide this service is £93,651 annually.”

That support is above and beyond the 25 minutes to two hours that it can take Your Homes Newcastle staff to assist tenants through the initial universal credit claim process. Some of the more complex cases can take significantly longer. Indeed, Your Homes Newcastle staff have highlighted the case of one tenant whose universal credit application has taken them approximately 100 hours to progress. Throughout that time, the woman has seen a significant decline in her health and wellbeing, as well as real financial hardship because of the severe delays and mistakes on the DWP’s part. If this represents a simplification and streamlining of the benefits system, I dread to think what a more complicated system would look like.

Of particular concern to Your Homes Newcastle is the significant impact on rent arrears of the roll-out of universal credit and the associated delays. I know that the Minister has repeatedly claimed—no doubt he will do so again this afternoon—that a large number of cases that enter universal credit have existing rent arrears. However, Your Homes Newcastle has made it clear to me that its current income collection rate is 93.9% of the rent due from tenants who are on universal credit, compared with 99.8% of the rent owed by other tenants. As a result, there was a reduced income collection of £220,000 for customers on universal credit at the end of the financial year. Your Homes Newcastle went on to state that tenants on universal credit owe a total of £784,000 in rent arrears, of which some £381,000—just under 50%—are solely as a result of universal credit. As Newcastle City Council has informed the Select Committee on Work and Pensions, of the 1,380 Your Homes Newcastle tenants claiming universal credit on 10 March, some 1,186—more than 85%—were in rent arrears. The average level of those rent arrears was £686, more than double the average of £300 for YHN tenants in rent arrears. Clearly the situation is completely unsustainable.

Housing-related concerns about universal credit are shared by the homelessness charity Crisis, which clearly states that, as it currently operates, universal credit

“is causing rent arrears, threats of eviction and homelessness for our clients”.

Meanwhile, the Residential Landlords Association has raised concerns that

“as it currently operates, Universal Credit is causing rent arrears problems for a considerable number of tenants. Changes are needed to provide tenants and landlords with greater confidence that rent can be paid on time and in full.”

All three organisations—Your Homes Newcastle, Crisis and the RLA—are pressing the Government to make alternative payment arrangements much easier to set up.

It is clear to me and to many other hon. Members that the roll-out of universal credit is having a significant detrimental impact on far too many of our constituents. These issues are not unique to Newcastle; they are being replicated across the country, as other parliamentary debates—including one recently secured by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—have made all too clear. Indeed, some of the concerns that I have highlighted this afternoon recently caused the Work and Pensions Committee to reopen its inquiry into the impact of universal credit. The Chair of the Committee, my right hon. Friend the Member for Birkenhead (Frank Field), commented:

“Despite a growing body of evidence about the very real hardship the rollout of Universal Credit is creating for some, often the most vulnerable, claimants—and the struggles it is creating for local authorities trying to fulfil their responsibilities—it is flabbergasting that the Government continues to keep its head in the sand.”

I agree.

On behalf of my constituents, of people in other areas in which universal credit has been fully rolled out, and of people in the rest of the country who will still have to endure this process, I strongly urge the Minister to take his head out of the sand and start addressing the very real issues that the roll-out of universal credit—the Government’s flagship policy—is causing. We must ask ourselves: how many times, from how many people and organisations across how many parts of the country must the Minister hear that universal credit is not working before he finally accepts that it is time to act?

[Geraint Davies (in the Chair)]

I will call the Front Benchers at 3.42 pm, half an hour before the end of the debate at 4.12 pm. I ask hon. Members to speak for between five and six minutes, so that everyone gets an equal share.

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[Rosie Cooper (West Lancashire) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate, as the daily lives of our constituents are being adversely affected by the operation of the universal credit system. I want to highlight for the Minister a couple of examples of West Lancashire constituents who are in receipt of universal credit and what their experience is. The system is far from improving work incentives and tackling poverty among low-incomes families and far from developing a particularly effective new administrative system. Families are not paying only the financial cost of the system failures; there is an emotional cost as well.

As for improving work incentives, a young person in West Lancashire was offered four days’ work. In accepting, he had to get the jobcentre adviser to sign a form confirming that he was in receipt of universal credit. If the forms were not completed by the deadline set by the employer, the job offer was to be withdrawn. Two days before the deadline, he was told that the form would need to be sent to the DWP’s Wolverhampton office to be signed, which was ridiculous. Only through my intervention and the good sense of a senior jobcentre official was the matter resolved in the end.

It strikes me that there is an organisational culture in the DWP in which process trumps outcomes. I have dealt with the case of a single parent with one child going out to work. Their problem was caused by the unintelligent and inflexible assessment system that universal credit operates. Those of us who are paid monthly know there are occasions when our payday is earlier owing to the standard payday falling on a weekend or a bank holiday. In some instances, universal credit assesses a person as having two sets of income in the one month and therefore they do not get any payment. In the case of my constituent, they lost out on £350 for their childcare costs. The following month, the payday was also brought forward.

I suspect that the Minister will say that, in the round, the payments will equalise out, but that fundamentally ignores how household budgets operate and the family’s need for the payments they receive to be consistent and regular. For families whose day-to-day existence is financially balanced, that leads to them asking whether they are really better off in work, if that is the result. A change in one month’s payment can have a ripple effect that lasts considerably longer than one month for a family’s financial position to recover.

Another West Lancashire family, a working couple in receipt of universal credit, experienced problems receiving payments in four consecutive months, which included their claim being incorrectly closed after the information that the claimant provided was not entered in the system. Having not received their payment, they called the Department to seek an explanation and asked for a call back. Owing to the request being processed incorrectly, there was no call back. In months three and four, payments were again not paid. What did the DWP do? It sent a letter apologising for the repeated failures, which it said were due to an “oversight” on the part of the Department for Work and Pensions. Well, that’s okay, then—I think not. Anybody with an ounce of compassion for the people they deal with would not even put such words on a piece of paper.

For their trouble, the family received a £25 consolatory payment, although the DWP could not say when that would be paid because it takes weeks to process. I am sure that, for the Minister and the people operating the universal credit system, such failures seem to be minor administrative mistakes. I raise them in the desperate, perhaps forlorn, hope that the Minister will begin to understand that such mistakes have monumental and disproportionate consequences for the people on the receiving end. It is not only about the financial costs; there is a lasting emotional cost.

I look forward to hearing the Minister’s reply, but I remind him that he will be judged by his actions in making the system better for families, rather than contributing to their daily struggles. He has that responsibility.

[Geraint Davies (in the Chair)]

I have been advised that, as names have rolled over from the previous time, unfortunately I have to restrict the time limit to four minutes. I apologise for that, but there are many people with an interest in such an important subject.

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On resuming—

[Geraint Davies (in the Chair)]

The debate will go on until 4.22 pm. I call Dr Whiteford.

[Dr Whiteford]

Usually people have exhausted their savings or redundancy money before they claim benefits, but if someone starts a new job, it is normal to be paid at the end of the week or month in which they start. The Government have said consistently that they want universal credit to mimic the world of work, but in that respect it really does not, and they need to look urgently at waiting times.

We all understand that processing a claim will take some days, but the monthly payment and discounted first seven days slows down the process unnecessarily and leaves people in considerable hardship. In reality, many claimants are having to wait a lot longer than six weeks. Eight to 12 weeks is more typical in some full service areas, and often longer. That is just not okay, and we have heard today about how those problems are not just abstract. I know from previous discussions on the subject that people have lost their homes. Many people on universal credit will be in work already so may have some other source of income, but a significant minority of new claimants will be sick and disabled people, assessed as unfit for work, and people who have just lost a job. The advance payments available are simply inadequate and are driving people into food banks, into debt and into trouble with their landlords. The bottom line is that the system is failing. It is in chaos.

Rent arrears are possibly the most far-reaching adverse impact of the full service roll-out. The Highland Council alone has seen rent arrears soar by £1 million, which is entirely and solely attributable to the roll-out of universal credit. My concern is that that is just the tip of the iceberg. We can get accurate figures of the scale and extent of the problem from local authorities, but the impact on other social landlords is likely to be profound. I know that housing associations in Scotland have warned that increases in arrears damage their financial stability, hitting their ability to invest in existing properties and build new ones. Private sector tenants and landlords face significant problems too, given that landlords may be servicing mortgages and may not have the level of solvency needed to wait several months for unpaid rent. We are already witnessing evictions. Just as worrying, we are already seeing evidence that some landlords are simply refusing to consider universal credit tenants.

Evictions and homelessness cause untold upheaval and misery for all involved and have a huge impact on other public services. The homelessness charity Crisis reports that 89% of English local authorities fear that the roll-out of universal credit will exacerbate homelessness. That situation is avoidable. We do not need to go down that road. The Government need to get a grip.

The Government have offered the excuse that the sharp increase we have seen in arrears appears to fall over time, several months down the line, but, frankly, that obfuscates the scale and extent of the increase in arrears. It also obscures the debt and hardship that those tenants, on desperately low incomes, are enduring in order to pay off a level of arrears that they would never have incurred under the previous system. It is yet another way in which the universal credit system fails to mimic the world of work, where most landlords require rent to be paid upfront a month in advance and, certainly in the private sector, expect sizeable deposits. Once again, the systemic pressures of the new system are being borne by people on marginal incomes—those with the fewest assets and means, working in the lowest paid jobs, recently unemployed or unable to work because of ill health or disability.

The other major breakdown in the system is in relation to the online accounts and problems with call handling on the telephone helpline. In many parts of rural Scotland, digital connectivity is well behind that in urban areas, notwithstanding significant recent progress. In my own constituency, 25% of people do not have access to the internet. It also remains substantially more expensive than in urban areas, and because of that, there are significant numbers of people with limited digital skills and experience who rely heavily on public access terminals.

My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) highlighted the high costs and time involved in travelling from rural areas to a diminishing number of jobcentres. I do not think a 200-mile round trip is acceptable. To put that trip in perspective, it would be like asking somebody here in central London to travel to Nottingham or Stoke-on-Trent for a DWP appointment. I do not think that is realistic.

My hon. Friend also highlighted a litany of problems with the telephone helpline. If someone calling from a mobile phone has to wait half an hour on the line, they could spend as much as a third of their weekly income on food, heating and essentials. Twenty quid may not sound like a king’s ransom to higher rate taxpayers, but for someone on a very low income, it is an enormous amount of money. Even if the Government’s assertion that waiting times are only eight or nine minutes was backed up by the documented experience from MPs’ offices and citizens advice bureaux, that is still a fiver. Proportionately, that is a lot of money for someone in receipt of £73 a week who is struggling to pay rent, heat their home and buy food.

Universal credit should have been quite easy to roll out in the highlands, in that there is a relatively buoyant labour market and universal credit should, in theory, be better suited to managing patterns of seasonal employment, which is widespread in the region. But it is proving to be a disaster, not just there but, as we have heard today, across the UK.

My last point is this: leaving aside the catalogue of incompetence that has dogged universal credit from the start, the new benefit is turning the screws on low-income working families and is now unrecognisable from its original design. According to the Child Poverty Action Group, by 2020 families with children will be, on average, £960 pounds a year worse off than they would have been under the previous system. The effects are magnified for families where one parent is working full time and the other is working part time or is at home with the bairns. Parents of severely disabled children are losing out. Those who will be most disadvantaged are single parents working full time in low paid jobs, who will be, on average, £2,380 pounds worse off. That is almost £200 a month.

The idea that work always pays under universal credit is just nonsense. It is a massive cut in household income and it punishes people who are already working full time, doing everything they can to make ends meet. For some of those people, work will no longer pay, and they would be better off if they cut their hours. That is exactly the opposite of what universal credit was designed to do. The policy has been so filleted by successive austerity cuts that it is no longer able to deliver the improvements it promised. Instead, it is set to drive up child poverty.

As we have heard today, the full service roll-out of universal credit is proving to be a disaster. It is causing chaos for landlords, housing associations and local authorities. It is causing turmoil, upheaval and real hardship in the lives of claimants who are entitled to support. We have had no adequate assurances from the Government that the systemic failures are being addressed. In those circumstances, I believe that we need to call a halt to the universal credit roll-out and go back to the drawing board, because at the moment it is an unmitigated mess and ordinary people are paying the price.