Universal Credit Roll-out

Kate Green Excerpts

Thursday 16th November 2017 Commons Chamber

[Michael Tomlinson]

I warmly welcome it. I look forward to the time when we look back and say that universal credit has been a success. Now, do not get me wrong. We are not trying to pretend that all is rosy and that there are no errors—quite the opposite. Government Members, as much as Opposition Members—well, certainly Government Members—want to ensure that universal credit works. I encourage the Minister, who will listen as I am sure he always does, to ensure that he is testing and learning, and that we are constantly improving the system.

I support any principle that encourages more people into work. In response to the intervention made by the hon. Member for Hove (Peter Kyle), I threatened to speak about the Labour party’s record. The hon. Gentleman is just about to leave the Chamber, but it does not matter, as he can read this in Hansard tomorrow—[Interruption.] Ah, he has sat down. When the Labour party was in power, a member of my community told me that he had chosen not to take a job because it would not have been worth his while, due to the risk to his benefits and, therefore, to him. I do not blame him. He made a perfectly calculated, sensible and rational decision, but he chose not to take a job because of the Labour Government’s policy.

[Kate Green (Stretford and Urmston) (Lab)]

If work incentives were so poor under Labour, perhaps the hon. Gentleman will explain why lone parent employment increased from 44% in 1994 to 57% when we left office.

[Michael Tomlinson]

The hon. Lady intervened on me during our last debate on this subject. It is always a pleasure to lock horns with her in a constructive fashion. The last time she challenged me, she said, “How about those young people in poverty?” I did not have the figures on poverty to hand at the time but, if the hon. Lady looks at them, she will see that there are 600,000 fewer people—I will check that figure—in absolute poverty this year. Under the old system, for the constituent I mentioned, it did not pay for him to go to work. Under universal credit, the principle should be that work always pays.

--- Later in debate ---

[Kate Green (Stretford and Urmston) (Lab)]

It is a pleasure to have heard the maiden speech of the hon. Member for Banff and Buchan (David Duguid), and to follow other hon. Members, including my right hon. Friend the Member for Birkenhead (Frank Field) who opened the debate.

No one could object to universal credit’s ambitions to simplify the benefit systems, to smooth the passage into work, to make work pay and to reduce poverty, but so much has gone wrong in practice that it is hard to know where to start. The problems we are seeing are not just because of poor implementation; the problems have been designed in from the outset, despite repeated warnings from Opposition Members since 2011 that the programme was too ambitious, too risky, too complicated, too reliant on complex IT systems—complex for the claimant and for the Government—and did not go with the grain of people’s lives.

Let us start with the six-week wait. It is based on the assumption—I might go so far as to call it the prejudice—that the right and normal way for people to receive their income is to do so every month. That is not the case for many low-paid workers, as we know. It is also based on the assumption, as the hon. Member for Bolton West (Chris Green) mentioned, that people have savings in the bank. Hon. Members should ask themselves whether they could manage if their income suddenly dried up for six weeks or more, especially if it was the result of an unexpected and catastrophic event—losing their job, a partner leaving, their child becoming ill, or having an accident and not being able to go to work. It is unforgivable to put extra pressure on people on the lowest incomes in those circumstances. The six-week wait must be reduced. I recognise that exceptions can be made, but it is not clear that the system is working when such exceptions should be made. My constituent B, who was fleeing domestic violence, was told that she would not have to wait for the six weeks, but she still had no money after two weeks.

That leads me on to the problems with advance payments. My constituent K was not told until her third interview with Jobcentre Plus that such payments were available, and she did secure an advance payment. However, the repayment rate is punitively high, especially when it is combined with the recovery of other debts, such as those relating to council tax or utilities, and payments imposed by magistrates courts. Under universal credit, that can mean deductions of up to 40%, leaving claimants with insufficient money to live on. As a result, one lone parent in my constituency was left with just £100.67 per week to pay all her bills, which is £110 per month less than on the legacy benefit. How can that be right?

Such problems are creating debts and rent arrears: 80% of Trafford Housing Trust customers on universal credit are in rent arrears. The collection rate for arrears of under three months is 79.3%. Although the figure is much higher for arrears of over three months, at 96.4%, that is because mistakes in paying people’s benefit have largely been sorted out by that point or because they have debt relief orders in place. That is not because they have adapted to universal credit, but because other things are kicking in.

The problems are compounded by a complete lack of understanding in Jobcentre Plus about alternative payment arrangements—in other words, paying the rent directly to landlords. Trafford Housing Trust staff have told me that Jobcentre Plus staff do not understand this, will not talk to them about it, make mistakes in the calculations and make payments to claimants that should not be made to them but which are then promptly swallowed up by the bank and other creditors. In one case, an alternative payment arrangement was refused because the debt was deemed to be one of less than eight weeks when that was not the case. This reflected the fact that Jobcentre Plus calculate the claims over a 52-week period, whereas Trafford Housing Trust work out claims over a 48-week period.

[Anna Soubry]

Broxtowe CAB has told me that it is concerned about people who are on fluctuating hours, and those fluctuations and the lack of good co-ordination with HMRC are causing real problems for people on low wages who are in receipt of UC.

[Kate Green]

I am delighted that the right hon. Lady has raised that issue because it brings me neatly to my next point, which is about the particular problems that arise with the assessment period.

My constituent S received two lots of wages in one assessment period. Similarly, we can see how those with fluctuating incomes will have different levels of payments in different assessment periods. As a result, her universal credit was calculated as zero in the month she received two payments. In the following month, she received nothing in income, but by that time her claim had been cancelled. When the benefit was introduced, we were told that HMRC’s use of real-time information would sort out this kind of problem, but it did not do so. The failure was that of her employer to upload the data in time. The use of real-time information was a complete irrelevance, because the data were not in the system at all. In other cases, constituents who have been paid early—for example, because their employer provided an advance of pay before the Christmas break—have lost their award and their claim has been stopped. None of that is the fault of the claimant, but the DWP is utterly inflexible in its application of the assessment periods. What are Ministers doing about this? I am now being told that S’s case could actually have been treated more flexibly, but I was not told that when I first wrote to the DWP. It is now completely unclear to me and, more to the point, to my constituents what the position is on these problems.

Finally, I want to say something about the problems when claimants migrate from ESA to universal credit. In that circumstance, if they request mandatory reconsideration and then go to a tribunal, they will find that their ESA claim is cancelled. Even if they win their tribunal claim, it cannot be reinstated, and they are forced to remain on UC. My understanding is that that was not Ministers’ initial intention. Claimants are not being told, when a tribunal case starts, that they can have their ESA claim reinstated. In his summing up, will the Minister also address that point? This is putting further pressure on sick and disabled claimants who ought to be getting decent support from the benefit systems, but are not.