Universal Credit

Kate Green Excerpts

Thursday 22nd November 2012 Commons Chamber

[Dame Anne Begg]

Indeed. We hope that in response to our report the Government will give more detail—put more flesh on the bones—on exactly how the exceptions service will work and how it will identify vulnerable people. I will have a bit more to say about that later.

Another area of concern is the ambitious implementation timetable. We think that there is a danger that the Government have a degree of blind faith in thinking that all the IT systems will work. We would love to share their feeling that everything is all right, but we have seen in the past how other Government IT systems have not lived up to expectations.

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

Did the Committee note the concern of the Federation of Small Businesses that only a quarter of small businesses are aware of the need to provide real-time information to Her Majesty’s Revenue and Customs? What did the Committee recommend as regards those communications?

[Dame Anne Begg]

We heard a lot of evidence from members of employers’ organisations and from organisations representing accountants, and others, who were concerned about HMRC’s real-time information requirements, on which the system strongly depends. They felt that there was not enough knowledge among employers who will have to operate the process. One of our recommendations was that the Government should be liaising more closely with those organisations and helping with publicity. Another recommendation was that the Government should be wary of trying to keep to the ambitious timetable that has been set.

The Committee has two other areas of concern. First, there are still decisions to be made about how to deal with passported benefits. Secondly, the decision to localise council tax benefit seems to fly completely in the face of the basic principles of universal credit. That might create extra computer problems, because the Department for Work and Pensions’ computer system would have to interface not only with the HMRC’s computer systems but those of local authorities.

Let me look at these matters in a bit more detail. “Digital by default” sounds great in theory, but it might be more difficult to manage in practice because the number of people likely to be applying for universal credit who do not have access to a computer or are not digitally aware or computer literate will be much higher than in the general population. We are keen that the Government should lay out exactly what will happen in the case of claimants who are unable to make any kind of digital claim, because we understand that there will not be a paper form. Indeed, the Government expect that only 50% of claimants will make their claim online in 2013, when universal credit starts to be rolled out.

--- Later in debate ---

[Kate Green]

Was the Committee concerned that the protection for existing claimants, which means that they will not lose out unless there is a change in their circumstances, might act as a disincentive to enter into work, because they might worry that the job will not work out and that they will have to go on to universal credit for the first time, which could mean receiving a lower payment than they had previously?

[Dame Anne Begg]

A number of witnesses pointed out to the Committee that there can sometimes be unintended consequences and that people’s behaviour does not always follow a logical pattern. What my hon. Friend has said might be logical in certain cases.

Many decisions must still be made on passported benefits. The Committee acknowledges that it is a difficult issue, but it is essential for the Government to make a decision. A lot of working families depend on passported benefits, and that is one of the elements that will make work pay. I do not have time to consider in detail the localisation of council tax, although I have a feeling that Ministers in the Department for Work and Pensions might share a few of the Labour party’s views on that, even if they do not say so publicly.

The concerns set out in the report about the impact of universal credit on vulnerable claimants are significant and should give the Government cause to reflect on the speed at which they plan to proceed. This is an important reform for the Government, who have been willing to go where no other Government have feared to tread. Many have described it as a brave, radical step that should provide a more coherent and transparent benefit system for working-age people. It is therefore important that the Government get the implementation right, and ensure from the start that all 8 million households affected by the reform will be able to access the help they might need to make a claim. The success of universal credit will be judged not on how well it works for those able to manage it, but on how well it serves the most vulnerable in society.

Question put and agreed to.