Universal Credit Sanctions

Debate between Jim McMahon and Neil Gray

Monday 4th December 2017 Commons Chamber

[Jim McMahon]

That is an important intervention. The Department for Work and Pensions’ own error statistics show that the error lies within the DWP. In 2016-17, claimant error was 1.8% and official error was 4.9%. When claimants are doing what is asked, the margin of error is marginal, so it is the official errors that are sending people into severe debt and often poverty, and, all too often, to the food bank.

[Neil Gray (Airdrie and Shotts) (SNP)]

I congratulate the hon. Gentleman on securing this debate. It is about a different aspect of UC from what we have discussed before, which is refreshing. Does he agree that reports produced by the likes of Oxford and Liverpool Universities on the links between benefit sanctions and the use of food banks prove that there is a major issue regarding the DWP’s sanction regime forcing people into food poverty?

[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.

Universal Credit Roll-out

Debate between Jim McMahon and Neil Gray

Wednesday 18th October 2017 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Does the hon. Gentleman accept that the breaking of the system has gone too far when organisations such as the Greater Manchester Law Centre refuse to support universal credit, on the basis that it results in further adversity and punishment for vulnerable people?

[Neil Gray]

Yes, absolutely. The Trussell Trust has reported a 17% rise in food bank aid in areas in which universal credit has been rolled out, which is double the year-on-year rise in the rest of the UK. There is, therefore, a direct correlation between the roll-out of universal credit in its current form and people living in food poverty. That cannot and should not be ignored. Citizens Advice in East Lothian, where UC has been rolled out, says that more than half its clients on UC are £45 per week worse off. The third of clients who are better off are up only 34p a week. Citizens Advice Scotland says that rent arrears are up 15% in UC areas, compared with a 2% drop everywhere else in Scotland. The DWP’s own figures show that one in four UC claimants wait longer than six weeks—some of them up to 10 weeks—to receive a payment.

The SNP has been warning about these issues for years. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) met the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), who was then the Under-Secretary of State for Scotland, on 14 March 2013. My hon. Friend was, at the time, the leader of the Highland Council, which was one of the first areas for roll-out. Nothing has been done. The warnings from Highland have been ignored, despite the roll-out being designed to allow improvements to be made as it progressed.

Where universal credit is currently in operation, rent arrears have spiked, because housing benefit is no longer paid directly to the landlord and people are not getting their money on time. Food bank need has grown because of the minimum six-week wait for payment. In-work poverty is rising as new work benefits start to become sanctionable, and the incentive to work is removed by the cuts to work allowances.

Of course, the DWP has claimed, and will claim, that universal credit is motivating people into work, but that is not true on the scale that it would wish us to believe from its rhetoric. The DWP’s own figures show that for the 2% of jobcentres with UC, there has been a 3% uplift in employment rates. That accounts for all the factors that contribute to people finding or staying in work. Are the rises in food bank use, rent arrears and in-work poverty really worth a 3% uplift in employment, when many of those jobs are precarious, low-paid and unsustainable? The DWP must look again at cuts to work allowances to really make work pay, cut in-work poverty and allow people to get on. The roll-out is supposed to allow the DWP to adapt where things are going wrong, and to fix the problems. Why, then, are the Government not listening to their own Members, to the expert charities, to the Scottish and Welsh Governments and to constituents?

On the subject of listening to constituents, the hon. Member for Moray (Douglas Ross) is failing his constituents by failing to be here to take part in a potential vote on this issue, which will impact on thousands of his constituents and a huge proportion of children in his constituency. Normally, Whips give slips for votes or business days so that MPs can take part in important constituency events or travel with Committees. The Government Whips appear to have slipped the hon. Member for Moray so that he can run the line at a football match in Barcelona. Far from standing up for his constituents, who would get sanctioned for not turning up to a work-related meeting—