Universal Credit Roll-out

Kate Green Excerpts

Tuesday 24th October 2017 Commons Chamber

[Debbie Abrahams]

No. I am sorry, but I am not going to take any more interventions.

Other design problems I mentioned last week include: the fact that payment is made to one member of the household—predominantly men—and that the second earners, who are predominantly women, face much reduced work incentives; the fact that severe disability premium payments were not incorporated into universal credit; the fact that rent is paid to the claimant rather than the landlord; the fact that self-employed people are subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; and the fact that in-work conditionality is coming down the track, meaning that 1 million working people will have to visit jobcentres while much of the Jobcentre Plus estate is being closed, and will face financial sanctions if they fail to work the hours their job coach deems they must work. On top of that, there are the real-time information flaws, which have been mentioned by my right hon. Friend the Member for East Ham (Stephen Timms), and the fact that there is no time limit on disputes, which will lead to more delays in payments. There is also, of course, the fact that the child element of universal credit has been reduced from 20 to 19 years.

I turn to the cuts made to the programme since its introduction. Universal credit was meant to simplify the system, but it was also meant to make work pay. We have always supported those principles, and we still do, but unfortunately the 2015 summer Budget slashed the work allowances, and the rate at which support is withdrawn was dramatically increased. As the Institute for Fiscal Studies said in its response to the Budget, that meant the promise that work would always pay was lost. The cuts reduced the work allowances from £222 a month to £192 a month for a couple with two children claiming housing costs. It is estimated that that will result in an additional 340,000 people in poverty by 2020. Some families have been left as much as £2,600 a year worse off.

Families with three children face even greater difficulty, as the Government have decided that the state should play no role in supporting the life chances of the third child. A whole generation of children will be born without the support that was offered to their siblings, which is a break from the historical principle that the state should not punish children for the circumstances of their parents. Single parents have been hit particularly badly. In real terms, a single parent with two children who is working full time as a teacher will be £3,700 a year worse off.

That is even before we reach the Government’s freeze on social security rates, which the Joseph Rowntree Foundation predicts will push 500,000 more people over the poverty line. Its analysis shows that the freeze will mean that a family of four receiving universal credit will be over £800 a year worse off in 2020, and that is on top of the other cuts I have outlined. Will the Minister confirm that the Government will continue the freeze on social security payments, including universal credit, given that it was introduced when inflation was 0.3% but the rate is now 3%?

As I revealed last week, the Child Poverty Action Group’s forthcoming report estimates that these cuts will push 1 million more children into poverty, 300,000 of whom are under five. What does it say about this Government when their policies knowingly push children into poverty? The Secretary of State, the Minister for Employment and many other Conservative Members have tried to suggest that data apparently showing a 3% increase in employment outcomes under universal credit compared with the situation under the previous system is evidence that universal credit works to get people into work. However, they fail to add that the data is from 2015—before the cuts were implemented. Will the Minister now commit to updating the figures, and will he retract these particular statistics, which he has used numerous times?

It is worth pointing out that the most recent figures show an underspend—I repeat, an underspend—on tax credits of as much as 2.4% compared with the projections of the Office for Budget Responsibility. Will the Government provide an exact figure for the savings that that has created? Could not some of the underspend be put towards sorting out the problems that we are now encountering under the new programme? I will return to that point in a minute.

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

Will my hon. Friend give way?

[Debbie Abrahams]

I am very sorry, but I will not give way now.

I turn to the implementation failures. Leaving aside the many changes to the programme’s schedule over the past few years, the most recent roll-out has been beset by problems. I was glad that the Government listened to Labour and will replace the high-cost phone line with a free one. Will the Minister give me a timetable of when that will happen? Will he also assure me that the free phone line will be funded not by the taxpayer but by Serco, the contractor?

Other implementation issues still remain, however, including the fact that people are denied prescriptions and dental treatment because pharmacies and dental practices do not know who is eligible for free treatment. People also do not know about advance payments or alternative payment arrangements.

I have been inundated with emails and calls from people telling me their UC horror stories. For example, a self-employed Oldham woman is worried that she will lose her business and home when she goes on to universal credit. I have received so many stories from self-employed people that you would not believe it, Mr Speaker. They are really concerned about what universal credit will mean for them. A private landlord is worried that three of his tenants are thousands of pounds in rent arrears under universal credit, although they had never previously been in rent arrears. Southwark Council estimates that such arrears will be an average of £1,700 per universal credit tenant. Disabled people are isolated and alone as the support of severe disability premiums disappears, along with other disability support. As I have mentioned, food banks are running out of food. Even current and former DWP advisers are expressing their deep concerns about the programme and the fate of claimants.

I come back to my asks. First, the Government must end the six-week wait. They should bring it forward by at least one week, but if it is to be brought forward by two weeks, as has been widely reported, that will make a huge difference to people. Secondly, they must ensure that alternative payment arrangements are offered to all claimants at the time of their claim. To suggest that this already happens is more than a little disingenuous. The DWP guidance is vague to say the least. The alternative payment arrangement options include fortnightly payments, split payments and payments directly to the landlord.

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[Hannah Bardell (Livingston) (SNP)]

rose—

[Kate Green]

rose—

[Damian Hinds]

I want to press on, because I do not want to take up too much time.

From last week’s debate, as well as the general commentary received and heard, I have taken away for action a number of points that were raised. There were some individual cases, and also policy and process matters, including how we can improve arrangements for direct rent payments, our approach in cases of domestic abuse and the process for housing benefit debt recovery. Some informational issues also came up. In response to my hon. Friend the Member for Gloucester (Richard Graham), I committed to publishing the roll-out schedule for the landlord portal and trusted partner status. A question was asked by the hon. Member for Newport East (Jessica Morden) about staffing levels. In fact, we are increasing, not decreasing our staffing levels to complement the roll-out of universal credit. The hon. Member for Oxford East (Anneliese Dodds) asked about the process for third-party representatives acting for clients. I recognise that we can do more in providing clear information on such matters and I commit to doing so. As well as reporting to the whole House, we are making sure that additional information is provided to Members as the full service comes to their constituency, and we are running a number of sessions in the House for both Members and caseworkers.

[Damian Hinds]

I am grateful to the hon. Lady for that intervention. Of course, we monitor those things constantly. As I was saying earlier, this is one reason why we have pre-scheduled pauses in the sequence.

Yes, this is a fundamental reform. This is a lot of change. It is a new benefit, a new IT system and a new operational system involving new ways of working with partners. Yes, that does bring with it some challenges, but its implementation is happening at a very measured pace, stretching over nine years from 2013 to 2022. In the next four months, universal credit will move from covering 8% of the benefit recipient population to 10%. This careful, gradual approach means we can continually adjust and evolve the programme. We can see that in enhancements such as the landlord portal and trusted partners, the refreshed approach to advances and many, many other back-of-house and systems changes. We see this effect coming through in the huge improvements in timeliness and first-time accuracy.

[Kate Green]

rose—

[Ms Angela Eagle]

rose—

[Damian Hinds]

I apologise to both hon. Ladies who have stood up, but I want to bring my remarks to a conclusion. I know that many Members, on both sides of the House, probably including them—

[Kate Green]

indicated dissent.

[Damian Hinds]

Not including the hon. Lady, but many Members, perhaps including the hon. Member for Wallasey (Ms Eagle), will wish to contribute to the debate.

In every phase and in every respect, the development of universal credit has been all about enhancing the way it helps people to get into work and get on in work. Already, universal credit is transforming lives and we want more families to benefit from the satisfaction, the self-esteem and the financial security that comes from progressing to a job, to a better job and to a career.

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[Neil Gray]

That is a question for the Labour party, not for me.

The Government could and should accept the three proposals already outlined, which would garner the support of the House, but they should also be going further, and we all know it.

[Kate Green]

Does the hon. Gentleman agree that if the Government are making choices, it would be sensible for them to choose to prioritise the incomes of low-income families, instead of prioritising the interests of higher earners by cutting taxes and raising the tax threshold? Does he agree that there is scope for improving work allowances in universal credit and helping those who earn the least?

[Neil Gray]

I absolutely agree with the hon. Lady, and I will come to that shortly.

The Government should review the cuts to the work allowances, which are acting as a disincentive to work and making work pay less; review the cuts to housing benefit, which are driving up rent arrears, as I am sure will be touched on in tomorrow’s debate; and review the cuts to employment support, which are denying help to those who need it most, and they should fully review and then scrap the disgusting sanctioning policy, which could have cost the life of my constituent, Mr Moran, and has cost the lives of others. That was the subject of an excellent paper by Sharon Wright of Glasgow University and Peter Dwyer of the University of York in The Journal of Poverty and Social Justice.

The Government are hiding behind the illusion that universal credit helps people into work and makes work pay. They actually believe that universal credit is working on this basis. The Secretary of State’s own figures show that in the 2% of jobcentres where universal credit has been rolled out, there has been a mere 3% uplift in employment rates.

--- Later in debate ---

[Kate Green]

Will the hon. Gentleman give way?

[Andrew Bowie]

I will not give way.

I am proud to be a Conservative Member of Parliament and I am proud to sit on these Benches with colleagues who work just as hard, and care just as much, for the people they represent as any other Member of this House. Let us be clear that no party in this place has a monopoly on compassion. Socialist, nationalist, Liberal, Conservative or Green—all of us in this place are here first and foremost to serve our constituents. To imply otherwise, and to indulge in wild and insulting generalisations, does not help our constituents, does not inform the debate, and does very little for how people perceive this place, and neither does the gratuitous scaremongering that we heard too much of in last week’s debate. To imply that simply because this Government are a Tory Government they do not care, and are not listening to and acting on the concerns of Members and public bodies, is unfair and untrue.

Last week the Secretary of State announced that all Department for Work and Pensions helplines would be free by the end of the year. A couple of weeks before that, he announced that a more proactive approach would be taken to making clear the availability of advance payments.

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[Michael Tomlinson]

I will give way in a few moments.

I support universal credit, which simplifies what was an over-complex and bureaucratic system. Like my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), I am disappointed by some of the tone of the debate both today and last week. Today, we have heard accusations of knowingly pushing people into poverty; last week, we heard the comment that the Conservative party is undertaking “calculated cruelty.” When I raised that point, there were cries of “Oh, yes it is!” from the Opposition. What a ridiculous assertion. What utter nonsense.

A person does not have to be best friends with Opposition Members to know that, as my hon. Friend the Member for Eastleigh (Mims Davies) said, no party has a monopoly on compassion. No party has a monopoly on care or concern for the most vulnerable. I know many Conservative Members, just as there are in each and every political party, who were driven into politics by their concern for the most vulnerable in our society. Let us not have any more nonsense about calculated cruelty.

Where there is a difference is on policy. This debate is on the Government’s response to last week’s debate. What is their response, and what should it be? Mr Speaker, you rightly said in response to a point of order that

“this motion does matter; it is important; it was passed. As a matter of fact, however, it is not binding. That is the situation.”—[Official Report, 18 October 2017; Vol. 629, c. 959.]

So what should be the Government’s response? Let us consider the substance. Conservative Members want universal credit to succeed, but heaving heard the debate both today and last week, I fear there are Opposition Members who do not want it to succeed.

[Kate Green]

The hon. Gentleman and I have previously been Committee colleagues, and I have a lot of respect for the way he approaches such matters. When the Government first proposed universal credit in 2011, they said it would lift 900,000 people out of poverty, including 350,000 children. That laudable aim should be welcomed on both sides of the House. What is the Government’s ambition today for the number of people they expect to lift out of poverty?

[Michael Tomlinson]

I, too, enjoyed working with the hon. Lady in a cross-party spirit on the European Scrutiny Committee in the last Parliament, and I look forward to doing so again. I have been told—I hope the Minister is able to confirm this—that 250,000 additional people will be helped into work as a result of this policy.