Universal Credit

Glenda Jackson Excerpts

Wednesday 6th March 2013 Commons Chamber

[Dame Anne Begg]

We did not specifically consider that, but my hon. Friend has placed it on the record as something that the Government need to address. We do not know, either, to what extent they will allow direct payments into landlords’ hands. I hope that they are still considering that.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

Is it not the case that many of the people we discussed when we exercised our inquiries in the Select Committee have no access whatever to bank accounts, so that issue does not arise? Is it not also the case that social landlords are already extremely reluctant to accept housing benefit claimants, and that the idea that they will not be paid directly will reduce even further the already lamentable stock of affordable housing?

[Dame Anne Begg]

I thank my hon. Friend. I was about to come to some of those issues.

In our report we drew attention to the lack of suitable bank accounts. Again, there is not much detail in the Government’s response as to what progress has been made in persuading banks that they need to cater for this part of the market. Perhaps they need to be able to have some kind of direct debit facility. That would deal with the point made by my hon. Friend the Member for Stretford and Urmston (Kate Green) about people being able to manage payments, particularly the bulk of money that needs to come out of their account every month. Also, the payment must come out on the day after the money goes in, not the day before; that is another potential problem. Banks will need to be sensitive to this market. So far they have been very reluctant to provide products that will cater for these people, simply because there is not a lot of money in it for them. I hope that they do have a social conscience and will realise the importance of this, but the Government will need to do a bit of prodding.

The monthly payment regime involving almost the whole of a household’s income makes it imperative that the Government get the delivery right. If something goes wrong with a claim or there is a delay, that could lead to real hardship for anything up to a month, or perhaps even longer. For some families, only child benefit and council tax benefit will sit outside universal credit, and all other payments will depend on the right amount of UC being paid at the right time into the single bank account.

The move away from paying housing benefit directly to landlords and to the claimant instead is causing a great deal of alarm among social housing providers, and it may be acting as a barrier to the social rented sector renting to people who are on UC. This, alongside the introduction of what has become known as the bedroom tax, could mean that many housing providers will have a large shortfall in their rental income.

In its response, the DWP says that it does not intend to define “vulnerability” in case someone with complex needs falls outside the prescribed definitions and so does not get the help they genuinely need. Instead, full guidance will include

“financial vulnerability factors that would trigger a conversation with a claimant about their budgeting needs”.

I do not know how that is going to work in practice. We fear that the person who is struggling will be picked up after they have begun to struggle and are already in debt rather than at the early stages of their claim—or, rather, before the claim is made. There is a good chance that the people who struggle with their monthly payments will be the same people who find it difficult to pay their rent in full and on time, who do not have access to a computer, who are not computer literate, and who need face-to-face help in making a benefit claim because they do not have basic literacy. The DWP is unwilling to provide a definition of who is a vulnerable claimant, yet there is a whole list of things that would act as a pointer to the fact that someone may be vulnerable. I am really concerned about the danger that claimants will get into financial difficulties before any help is provided.

It seems from the Government’s response that the first solution will be budgeting support, rather than an alternative payment method. Perhaps the Minister could clarify that. How long will somebody have to wait before their rent is paid directly to the landlord or their benefit is paid more frequently? For how long will those solutions last? I understand that the DWP is running six direct payment demonstration projects that are due to run until June 2013. How are those demonstration projects going and how will their findings be incorporated into the roll-out of universal credit?

Our report points out that there is a need to decide how passported benefits will be dealt with under UC. I do not think that things have moved on much. Apart from the temporary solution for free school meals, the Government do not seem to have any ideas about how they will deal with that matter. Again, the Minister might be able to shed some light on that today. It is important that passported benefits operate effectively because for many people, they make the difference between a bare income and one on which their family can live.

One of the problems with passported benefits is that the Government have not managed to iron out the cliff edge that might be involved. The whole point of universal credit was to smooth away all the cliff edges. However, once passported benefits are put into the equation, a lot of the cliff edges come back.

It is important for other Departments to know how passported benefits will operate. They have always used the payment of social security benefits as proxies for certain qualifications, which has made it much easier and cheaper for them to administer their benefits. If there is nothing in universal credit that signposts a claimant as someone who should receive other things, such as free prescriptions, it could land the Department of Health, the Department for Education, other Departments and local authorities with a large administrative burden in order to work out who qualifies for other benefits.

[Glenda Jackson]

Free school meals are linked directly to the pupil premium. If there is a reduction in free school meals, it is entirely possible that there will also be a reduction in funding for schools. The implications of universal credit are infinitely greater than just the effects on the actual claimant.

[Dame Anne Begg]

That is why it is important that the Government get it right. I appreciate that it has been very difficult, but before the first claimants go on to UC, which is in just over a month, they need to start answering these questions. They certainly have to have an answer before it is rolled out to other claimant groups in October. They do not have very long.

This morning, when the Select Committee was taking evidence on the Work programme, we heard that universal credit has implications for the Work programme. There are questions about how people will be labelled when they go into the Work programme because the predecessor benefits, such as jobseeker’s allowance and employment and support allowance, will disappear under universal credit as people move on to the single benefit.

There is one benefit change that flies in the face of all of this and undermines what UC was intended to do. The localisation of council tax support will add complexity back into the system and introduce local variations, which could undermine the withdrawal rates that should make work pay. I have already talked about computer programmes. I have said that the customer-facing screens must be right and that, behind that, the programmes must calculate what a claimant should get and pay it into the bank. Those computers will have to speak to the HMRC computers so that the real-time information can be fed in. However, because of the proposals on council tax support, they must also interface with the local government computer system, which apparently is called ATLAS. I do not know whether that just applies to England and Wales. That is another potential IT difficulty that could cause problems for people. On top of that, it will be more difficult for claimants to work out whether they will be better off in work than it would have been if council tax support had been included in universal credit. That will rely on working out the tapers and the disregards.

To come back full circle, the delivery of universal credit will depend on the smooth delivery of the IT—not only the IT controlled by the Department for Work and Pensions, but that controlled by HMRC and local authorities. That is a big ask. My final question to the Minister is: how is that going?

--- Later in debate ---

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

The hon. Member for Amber Valley (Nigel Mills) said that 92% of jobs advertised require some computer literacy. I do not know what the requirements are on that side of the House, but on this side computer literacy is not a requirement to be an MP, for which I am extremely grateful because I frankly admit to being an IT illiterate.

Before I continue, I wish to apologise to you, Mr Deputy Speaker, and to both Front Benchers, because I have a previous engagement and will not be here for the wind-up speeches.

I do not wish to re-rehearse what my hon. Friend the Chair of the Select so succinctly detailed as the bedrock of the Committee’s examination of these issues. With all due respect to the Minister, he—like every Minister from the Department who has appeared before the Committee to answer questions on these issues—has been overwhelmingly over-sanguine about how easy this process will be for some of the most vulnerable people in our society. That is the central issue for me.

The Department has failed to come anywhere near defining what will be meant by “vulnerability”. We have had representations, for example, from the organisations that campaign for and on behalf of specific groups of vulnerable people, not least the Royal National Institute of Blind People and the British Deaf Association. Many of the mental health organisations have also campaigned with us, because it may be possible for a person suffering from a mental illness to be capable of doing everything on one day—probably even running the country—but the day after they can be incapable of getting out of bed, and they certainly would not be able to access a claim. We all have cases—even before this system is introduced—of people failing to meet the requirements of the recent changes made by the Department, such as the need to attend an Atos examination.

My overriding concern is that some people—for a variety of reasons, most of which they do not have any control over—will be allowed to drop through the net. They could end up with no support and, even more frighteningly, no one would know that. I have had occasion to raise individual constituency cases with the Minister. I also remember raising with the Secretary of State the case of an individual who is agoraphobic. He has not been outside his house for 35 years. His elderly mother is responsible for maintaining and caring for him, but she is not going to live for ever. The Secretary of State said—I paraphrase—“Oh well, we’ll have house visits, we’ll ensure that someone can treat with that individual.” That is all very fine and good, but it does not happen.

As my hon. Friend the Member for Aberdeen South (Dame Anne Begg) said in her opening remarks, 8.5 million people will be affected by this change, and many of them will never have had any contact with a piece of IT equipment. That is my first concern.

My second concern is the security of the individual’s claim. They will be expected to access terminals in internet cafes and public libraries or use their phone. We are all warned to hide our phones because they could be stolen, and heaven only knows how long it would take to fill in the form over the phone. I am especially concerned that it would be more than possible for someone to steal an individual’s details to defraud the benefits system. I have asked whether someone could be validated to make a claim on behalf of an individual, and I have to say that I did not get a categorical answer that calmed my concerns. I know of cases under the existing system in which someone who regularly claims benefit has a lot of friends on the day the money is paid, but they disappear with the money about half an hour later. This is already happening to some of the most vulnerable people in our society, and this obsession with all claims being made online will only increase the possibility of people being cheated in that way.

All hon. Members broadly welcome the idea of universal credit, but the details of its delivery to the most vulnerable in our society are a long way from being defined by the Department. Those who have spoken in the debate so far have mentioned the need for additional resources. We all know about the work force in our local jobcentres being reduced, and that the voluntary organisations that have been of such wonderful assistance to our constituents—such as citizens advice bureaux, voluntary organisations and local authorities—are seeing a big diminution in staff numbers, so even fewer people will be able to afford advice to someone who simply cannot handle what happens when they look at a monitor. Added to that is the possibility that the Department’s budget will be drastically slashed. If the Ministry of Defence makes its case for money to come out of the DWP, the resources to assist claimants could be greatly diminished.

[Anne Marie Morris]

Does the hon. Lady agree that if the new scheme makes claiming easier and simpler for the majority—say, 75% or 80%--it should mean that the resources that exist, albeit potentially diminished, will be more than adequate for the individuals who are vulnerable and need the help?

[Glenda Jackson]

I would like to be able to say yes, but I am old enough and cynical enough to be able to say categorically, “No, it never, ever works like that.” If 75% are sailing along on the crest of a wave, the 25% are always, in my experience, left paddling in the shadows, and nobody notices when they are waving. I am very concerned about this for the reasons that I have already elucidated.

I am also concerned about the possibility of the Department having to slash its budget even further—I have already mentioned the MOD rolling its tanks on to the Department’s lawn. The Secretary of State is already saying that because of the supposed invasion of these shores by new citizens of the European Union he will have to address the whole issue of welfare benefits all over again. I suspect that has a political basis and has nothing to do with the delivery of benefits, but if there are to be reductions—no one has argued that the Government have managed to tackle the issue of our as yet far from booming economy—these issues will come into play further down the line. There will be more and more complexities for many people who already find every single day of their lives a struggle, from the minute they open their eyes in the morning until they go to bed at night. Those are the people on whom we need to concentrate and I hope that the Department will do just that.