Universal Credit Sanctions

Debate between Jim McMahon and Jonathan Reynolds

Monday 4th December 2017 Commons Chamber

[Jim McMahon]

That is what is cruel about this. The working classes are taught that if they are willing to roll their sleeves up, work hard and put the hours in, they can get by, and that if they work really hard, their son or daughter will have a better life than they had, and that legacy can be passed on to their children. I see a lot of people in Oldham who are doing what is asked of them and working long hours, but the idea that they will do better than their parents, and that their children will do better than them, is a distant prospect. That is cruel. We are still one of the richest countries in the world, but we are a country that is built on very weak foundations. I fear what Brexit means for our country because of how fragile our economy is and how little investment has been made in the foundation of rebuilding our economy, whether in skills, the types of industry that will get us beyond Brexit, housing or public services. All those things matter, and I do not see investment being made in places where it ought to be. This is a very sad situation.

Reflecting on my own situation, when my son was born, we relied on working families tax credits. That helped us, because it meant we were not just eating cheap microwave meals or skipping meals entirely to pay the rent, but it also meant that for the first time we were part of the welfare state. We were always taught that we claim benefits only when in absolutely dire need of them, not because there is a shame necessarily attached to claiming them, but because they are to be treasured. We were taught that we must not abuse them, but that they are a safety net to catch us when we need it. That is why we pay our national insurance and that is why we value benefits.

I worked for 40 hours a week, but it still was not enough, especially when large or unexpected bills arrived. It was a tough lesson to me that sometimes it does not matter how hard people work, because if they get caught in a cycle of debt, it can be difficult to break out of that trap. It only takes one or two minor things going wrong, such as a household bill coming in unexpectedly, for things to become very difficult.

The situation also showed me that sometimes the machinery of government is not on our side. We were in debt not because of unexpected bills, but because an error in the calculation of our family tax credits sent us into an overpayment situation.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It has been worth staying in the Chamber for this important debate. My constituency, like that of my hon. Friend, has been a pathfinder for universal credit for some time. It is those bits of absurdity that I find so hard to take. Government errors are resulting in people being sanctioned. I have seen people sanctioned for attending a job interview, which they are mandated to do. They win such cases on appeal, but that can often take two or three weeks, and the sanction leaves them dependent on high-cost credit or food banks to get by. They become trapped in a spiral of despair, and I find that bit of the system absolutely unconscionable.

[Jim McMahon]

That was my experience. We were working long hours and we relied on tax credits to be able to pay the rent and put food on the table. Through no fault of our own, we were trapped in a system that put blame and responsibility on to our shoulders, even though the fault was eventually proven to be that of the system. Families experience a great deal of stress when they do not have the necessary disposable income to satisfy all the demands that are coming in. That is the extremely difficult experience of people who are on universal credit.

I was in a secure job with a regular wage, and my hours were not changing all the time. I would fear being a universal credit claimant today if I were in insecure employment where my hours changed from one week to the next, where my employer would not give me certainty of employment or, even worse, where my employer would put me on a zero-hours or self-employed contract and I had to declare my earnings up front just in case there was an error further down the line. That does not strike me as a system that has been designed to help the claimant. It seems to have been designed to create a culture, and I believe that it is a corrosive culture. It is not a safety net to catch people, or a top-up benefit system that is meant to make work pay. It is a culture that talks about the deserving poor. It tells people that they are poor because of their own fecklessness or laziness, or as a matter of choice, not because they have been caught in a cycle of debt and despair. There also seems to be a grudging idea of what the welfare state is meant to be. People are told, “All right, we’ll pay you the money if we have to, but only if we really have to.” The culture that that creates is very dangerous for a country that has a long history of a welfare state.

More than 1 million working families will be £2,800 worse off under universal credit. Food banks have reported a 30% increase in referrals in areas with full universal credit roll-out. I want to talk about Greater Manchester, and particularly about Oldham. I want to take this opportunity to pay tribute to my neighbour, my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), for the leadership that she has shown on this issue. She will know from her constituency the depths of despair that people reach and the problems with the system, but some of these issues can be resolved, provided that the Government step back and listen to these concerns and take enough time to fix them, instead of going full steam ahead into a programme that they know has been built to fail.

We were one of the first pilot authorities, and we now have 4,000 claimants in Oldham. There are 49,000 claimants across Greater Manchester, nearly 20,000 of whom are in work. We have seen delays, mistakes and IT failures, on top of the deliberate decision by the Government to cut payments for those claimants who need them the most. Those things have real consequences. We have heard from Citizens Advice, the Greater Manchester law centre, my own local authority and directly from people working in job centres across Greater Manchester. We have also heard from a wide range of charities, including the Oldham food bank, which have seen scores of people—often referred by the Department for Work and Pensions itself—queueing for food vouchers for the food banks, just to get a basic supply to be able to live. My casework advisers are swamped and so are many of the charities. We fear the roll-out to the full 322,000 legacy benefit claimants, not for ourselves, but because we see what the scale of human suffering will be if the Government continue to fail to heed the warnings that the system is broken.