Universal Credit and Welfare Reform

Jane Ellison Excerpts

Tuesday 11th September 2012 Commons Chamber

[Dame Anne Begg]

We should also bear in mind the debt that those people will incur in the meantime, and the fact that, even when the money has been paid, it will be difficult for them to get back on to an even keel.

I know that the Government will not want to plan for failure, but, as was pointed out by the hon. Member for North Antrim (Ian Paisley)—who has now left the Chamber—they need to have a contingency plan in case the worst happens, or, indeed, the system proves to be susceptible to large-scale fraud. I hope that the worst does not happen, but, given the Government’s record of IT failures, the possibility must have crossed Ministers’ minds. It is not enough to say that the tax credit IT disaster was the Treasury’s fault, as the Treasury is involved in universal credit with real-time information, which is not being developed on the “agile” system by which the Secretary of State sets so much store.

I must admit that—apart from the disastrous Child Support Agency—the DWP has a better reputation than most for delivering new IT systems, although that is not saying much. However, all its previous systems have been delivered over a much longer time scale, with much more testing, than will be the case with universal credit.

The Government say that they have learnt from the experience of the tax credit system that there will not be a “big bang”, because not everyone will come into the system on day one. However, for individual families there will be a big bang, because all their benefit, or income, will be put at risk if anything does go wrong.

Let me return to the subject of those who will not be able to manage the new system. Let us take the best-case scenario that the Government have painted today, and assume that the IT system works perfectly, with no hitches; that most people adapt to the monthly payments; that the welfare rights people and all the other organisations are given lots of money by the Government, are well trained and provide plenty of advice; and that 80% of people—or even 90%, but the Government are saying 80%—are able to access the online form and make their applications digitally. Even if all that works, there will still be people who will not manage. The success or otherwise of universal credit will depend on how well they are catered for, even if the proportion is as low as 10% or 20%. If it is only 10%, that still represents 770,000 households. More than 1 million people will probably struggle with the system, and on the basis of the Government’s own figures the number could be more than 2 million, so I hope that the Government are paying a great deal of attention to that group of people.

[Jane Ellison (Battersea) (Con)]

Does the hon. Lady really think that the only measure of universal credit’s success will be what may happen to the most vulnerable, about whom all of us feel understandable concern? Does she not think that an important measure of its success will be the fact that it will increase incentives to work, and will make work pay for those who want to return to the work force?

[Dame Anne Begg]

If the group about whom I have been talking cannot access the system, there is very little chance that they will be able to return to work. That is why the support is needed.

--- Later in debate ---

[Jane Ellison (Battersea) (Con)]

It is a pleasure to contribute to the debate. Needless to say, I do not share much of the scepticism of so many Opposition Members, who I fear are, in some cases, substituting extended concern about the detail, however right and proper, as a proxy for opposing the reform. Some of the support we have seen even for the principle of these reforms is half hearted at best. Given what we have heard in one or two speeches, one would have thought that this Government inherited some sort of welfare utopia in which all was working smoothly, nothing needed amending and only the uprating of benefits was necessary each year.

The situation we inherited was a complete shambles, which is apparent in a constituency such as mine. We are lucky in that many jobs have been created over the past decade in London, yet young people in my constituency have said to my face, “It isn’t worth getting a job; I’m better off sitting at home, playing on the internet and living on benefits”. If that is the case, we have to do something about it. The problem I see is an inter-generational one.

I have listened to many of the detailed speeches given by the hon. Member for Stretford and Urmston (Kate Green) in Public Bill Committee and elsewhere, and I know she makes many good points about the detail that have to be addressed, but this is also about committing ourselves to a principle, quite apart from the rising costs of the whole system. I have seen intelligent women in my constituency being infantilised and reduced to a position in which they do not even back themselves to manage their own finances monthly, and I have seen people with qualifications and degrees who have been out of work for a very long time.

[Kate Green]

rose—

[Jane Ellison]

I shall take just this one intervention, as we are running out of time.

[Kate Green]

No one is pretending that the previous benefit system was perfect, but we should equally acknowledge that for the overwhelming majority of people in it, work did pay more than being on benefits. One instance of how the system was effective in helping to support that is the fact that lone parent employment—mostly female employment—rose from 44% in the mid-1990s to approaching 60% today.

[Jane Ellison]

That intervention misses one essential point—that there were too many in the system altogether. We cannot go on as we are.

Concerns have been expressed about monthly budgeting and other issues, and it is right to look at them. One particular point I want to make in my limited time is about what I hope will be a real engine for creativity in respect of new products to help people. We cannot say that it is only a matter of providing advice services; we need to work harder as a society to create products that work for people who are vulnerable or less financially skilled and so forth.

I do not believe the point has been made this afternoon that there is a real opportunity for a degree of rehabilitation of the banking sector. I represent an area in Battersea where the Clapham sect was active between 1790 and 1830. Its members included Wilberforce and others who were great pioneers of social reform. Not every Member may know that nearly all the Clapham sect were from banking families. I was reminded of this fact by the vicar of St Luke’s church in my constituency this week. She is piloting a meeting to discuss how the world of finance can do more to help the poor and the vulnerable in today’s society, building on the work of the Clapham sect.

I think there is a real opportunity here for the banking sector to use some genuine creativity and to step into the breach and look at ways of providing practical assistance, putting something back into society in the form of serving vulnerable people who, to date, have largely not been catered for by proper banking products or the right support from that sector. It should not be all about the voluntary sector; there is an opportunity for people involved in banks to be true to some of the heritage of the social reformers who have gone before them. I am thinking about jam jar accounts and individual banking, which I know the Department is looking at, as they could prove to be important and life changing for many vulnerable citizens.

My main point is that the Labour party has got itself on the wrong side of this debate. I believe in the welfare state, which is one of this country’s most important and civilised achievements, but if we do not make it work, not just for the people in it but for society as a whole, and if we do not restore confidence in it, we fatally undermine something that represents, as I say, such an important and civilising aspect of this country.

Before I was an MP, when I was candidate, I received an e-mail that was rather similar to the letter my hon. Friend the Member for Gloucester (Richard Graham) told us he received. My e-mail was from a young woman who was a trainee nurse and lived on one of the tougher estates in my constituency. She was a single mum bringing up two children, and she wanted to work. Every morning, however, as she walked down the walkway on her estate, she was mocked, as people shouted at her through the windows of other flats. They said she was a fool to go to work and asked why she was doing it. It is absolutely appalling that we have created a situation in which someone like that, trying to do the right thing for her family, is mocked by the people around her.

Unless the Labour party puts itself on the right side of this debate and understands that we create and maintain confidence in the welfare state as an important aspect of our country by being on the side of that nurse who wanted to go to work and by ensuring that the system always works for her, it will find itself left behind in this debate. I applaud the Government for what they are trying to do. There are risks, and the Secretary of State has been open about them today—of course there are risks in major reform—but it is about meeting those risks head on and making the reform work, not about naysaying it before it has even started.