Universal Credit Roll-out
Kate Green Excerpts(6 years, 5 months ago)
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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.
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.
Supported Housing
Kate Green Excerpts(6 years, 6 months ago)
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John Healey
My right hon. Friend is exactly right, and the Select Committees’ joint report was very clear about that.
Not only does the LHA bear little relation to the actual cost, when the cost of providing supported housing is pretty consistent wherever people are in the country, but an LHA-based approach—I am glad the Government have backed off—would cause particular problems in the north and the midlands, where the level of the LHA is much lower. In my own area, the South Yorkshire Housing Association says that the majority of the 1,000 places it provides in supported housing for the frail elderly, people with learning disabilities and the homeless are at risk, and describes that approach as “catastrophic”. My right hon. Friend the Member for East Ham (Stephen Timms), who knows such a great deal about welfare and benefits issues, is absolutely right.
Kate Green (Stretford and Urmston) (Lab)
My right hon. Friend is right that LHA would be completely unsuitable as a measure when rental costs and local housing markets are different, but is it not also the case that support costs vary between, say, sheltered housing at one end of the scale, where there might effectively just be a concierge service, and intensive support for ex-offenders or young people leaving care at the other?
John Healey
That is true, and my hon. Friend is another of the House’s experts in this area. However, it is also the case that the housing benefit element of the costs of supported housing is designed to cover the housing costs and the management of housing costs, not the personal or support care costs.
Sometimes there is a confusion of those issues, but there should be no confusion for the Minister or the Government. In their own review in 2011, they listed the main reasons behind the costs of supported housing, where housing costs are often greater than those for general needs housing, saying that they included
“providing 24 hour housing management cover…providing more housing related support than in mainstream housing…organising more frequent repairs or refurbishment…providing more frequent mediating between tenants; and…providing extra CCTV and security services”.
My hon. Friend the Member for Stretford and Urmston (Kate Green) is absolutely right, and I am sure that the House will look forward to hearing her speak, and that she too will welcome the Prime Minister’s partial announcement today.
For all of us in this House and, in particular, for the 700,000 people who currently have their homes in supported or sheltered housing, what the Government do instead matters a great deal. The devil is always in the detail and the funding. We are told that we will have to wait until next week for the detail, so let me turn to funding. The previous Secretary of State for Work and Pensions, now the deputy Prime Minister, said in a written ministerial statement in September 2016:
“we will bring in a new funding model which will ensure that the sector continues to be funded at current levels”.—[Official Report, 15 September 2016; Vol. 614, c. 37WS.]
That is simply not true. Total funding is only protected in year one, 2019-20. In year two, the sector faces a funding cliff edge with cuts of more than £500 million scheduled from April 2020. Government Members are right to look puzzled and a little alarmed. This has not been mentioned by Ministers and it is only evident in the small print of the Treasury’s fiscal reports. If Members look closely at the Treasury documents, as I have, they will see exactly what the Government plan.
On page 87 of the Budget 2016 Red Book, table 2.2 shows that the Government scored cuts to supported housing spending of £390 million in 2020-21. Following the pledge by the then Secretary of State for Work and Pensions to protect funding, page 12 of the Treasury’s 2016 autumn statement policy costings report reflected the commitment that overall funding for supported housing will be the same in 2019-20. However, it also confirmed that the amended policy announced by the right hon. Gentleman will
“generate additional savings in subsequent years as it is applied to the stock of supported housing tenants”.
In other words, that includes all current supported housing tenants and not just, as originally planned, the new ones. It shows additional cost cuts in 2020-21 of £160 million. Of course, that was updated in the Budget 2017 Red Book to £165 million. As well as the £390 million of cuts already announced, therefore, there will be a further cut in 2020-21, the second year of any new system.
The upshot is clear: Ministers have lined up costs for this programme. And they have lined up cuts of over half a billion pounds for year two of any new system they put in place, and further cuts after that. This is a funding cliff edge for existing supported housing and it entirely demolishes Ministers’ claims that they will protect supported housing. Will the Minister confirm today that the Government will make good this funding gap in full, so that the Prime Minister’s pledge this morning to the House in Prime Minister’s questions can be properly honoured?
In our motion, we say the Government should adopt a system that
“safeguards the long-term future and funding of supported housing.”
I want to set out four tests for the Government, which explain what we mean and how we will judge the detail of any plans for change. First, any new funding system must reflect the real cost of running supported housing. Secondly, any new funding system must be needs-led and be able to deal with increases in demand and need for supported housing, not subject to arbitrary cash limits such as departmental revenue spending. Thirdly, any funding model for the future must take account of the particular needs of very short-term accommodation, including homeless hostels and women’s refuges—this is one of the very serious failings with universal credit. Fourthly, and most importantly, any new funding system must not lead to the closure of any vitally needed supported housing.
This is a Government with no majority or mandate for domestic policy, because this is not covered by their deal with the Democratic Unionist party. It is Britain’s first minority Government for 38 years. As a Parliament, and as Members on all sides, we are still coming to terms with the much bigger role and much stronger say we have in Government policy decisions. The influence—[Interruption.] The Minister snorts, but the truth is that the influence of Members from all sides has had a very significant bearing on the policy on supported housing. It has been very significant so far, but there is a good deal more to do. I trust that Ministers will see this debate as another important contribution.
Universal Credit Roll-out
Kate Green Excerpts(6 years, 6 months ago)
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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.
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.
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.
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—
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.
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.
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.
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.
Universal Credit Roll-out
Kate Green Excerpts(6 years, 6 months ago)
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Debbie Abrahams
I am sorry but I am not going to give way again, as I must try to press on.
Secondly, there were concerns that UC payments would be made monthly, in arrears, and paid only to the main earner of each household, so women, as second earners, are automatically discriminated against in this process; it was also quite a radical change, with rental payments going directly to the household and not the landlord. Thirdly, there were considerable doubts about the use of so-called real-time information, which was meant to ensure that information from employers to Her Majesty’s Revenue and Customs would allow the Department for Work and Pensions to calculate quickly what people in low-paid employment would be entitled to from UC. The reliability and validity of this data exchange was another key concern. I believe there is a DWP RTI issues group, so there are clearly still problems. Finally, the Government said that disabled people would not be financially worse off under UC, but because the severe disability premium payment has not been incorporated into UC, it is an effective loss of up to £62.45 a week for a single person—more than £3,200 a year.
All that was in 2012, but a number of other issues emerged in the following couple of years—universal jobmatch, ballooning costs and of course several delays. One of the most worrying issues revealed in the January 2015 UC regulations was that people in low-paid work on UC will now be subject to in-work conditionality. So, for example, someone who is one of 1 million or so people working on a low-paid, zero hours contract, with different hours from one week to the next, will have to demonstrate to their Jobcentre Plus adviser that they are trying to work 35 hours a week and if they fail to do that to that person’s satisfaction, they can and will be sanctioned. For Members who are unfamiliar with this concept, those people will have their social security payments stopped for a minimum of a month.
Fast forwarding to the 2015 summer Budget, the then Chancellor announced that cuts would be made to the so-called universal credit work allowances, which are how much someone can earn before UC support starts to be reduced. For example, a couple with two children claiming housing costs had their work allowances cut from £222 a month to £192 a month. In addition, approximately 900,000 families with more than two children could not receive support for third or subsequent children.
Debbie Abrahams
I am not going to give way again, as 90 people have put in to speak.
The UC equivalent of the family element in tax credits was also abolished. The Government’s equality analysis showed that women and people from black, Asian and minority ethnic communities will be most adversely affected by these work allowances cuts. Let us recall what the principles of UC were and then consider that the Institute for Fiscal Studies stated at the time that the cuts to work allowances meant the principle of making sure work always pays was lost. The Government’s claim that UC is leading to more people getting into work is misleading, as it is based on 2015 data, before the work allowance cuts came into effect.
The current Chancellor’s attempt to redress some of the damage of these cuts by reducing the UC taper rate in last year’s autumn statement has had a marginal effect. Members may recall that he reduced the rate from 65% to 63%, so that for every £1 earned over the work allowance, 63p of UC support is withdrawn. That is a far cry from the 55p rate envisaged when UC was first being developed. On that basis, the Resolution Foundation estimated that some families will lose £2,600 a year because of these cuts.
Mr Duncan Smith
No, because I am conscious that others want to speak, but I will come back to the hon. Gentleman in a minute.
I recall that my surgery was full of people who, under the tax credit changes, found they had no money at all. When Labour rolled out tax credits in a big bang, over 750,000 people ended up with no money at all. Since then, the thresholds have had to be raised dramatically to get money to those people.
Mr Duncan Smith
I will give way in one second.
The roll-out of universal credit has been deliberately designed—it is called “Test, learn and rectify”—so that, as it happens, we can identify where there are issues, rectify them and then carry on rolling it out. I want to give an example of why stopping the roll-out now will not work.
One area that we discovered early on is that landlords were simply unaware of who was on benefits. As a result of all that, arrears would be racked up, but they did not know they could get that stopped and have direct payments made. That will be changed in the next stage of the roll-out, because a portal between landlords and the service centre will allow them to establish that immediately. Unlike the local housing allowance, under which people ran up huge levels of debt, but reset slightly and carried on, universal credit allows them only a two-month period of debts before they go on to direct payments. That critical change will be one way of resolving the problem.
Jessica Morden (Newport East) (Lab)
I am keenly aware that the full service roll-out is due to start in the Newport part of my constituency on 15 November. As has been made clear by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), and also by a host of organisations including Citizens Advice, Community Housing Cymru—which represents housing associations in Wales—the Trussell Trust, the Child Poverty Action Group, and the staff of those organisations on the front line, universal credit is not working for far too many people.
Although we support the principle of simplifying benefits, the evidence so far suggests that the design problems in the system, compounded by operational problems, delays and errors, mean that too many people are experiencing real financial hardship. In Newport—and in Caldicot, which will have full service in March—the DWP is dealing with only the simplest of claims from single people without children and without complex needs.
The ramped-up roll-out will widen to include more claims, as yet untested in the system locally. We have already seen cases of people waiting up to eight weeks for payments, not being able to meet financial commitments, borrowing and incurring interest charges, and struggling to catch up while remaining in debt. In my constituency, a family with three young children moved on to universal credit because of a new relationship, but then had to be moved back on to legacy benefits and tax credit because the system was not yet geared up for such cases. That family were left for eight weeks without a single payment, and had to rely on food banks for help.
The Government may decide to stick their head in the sand and ignore these valid criticisms, but let me explain what that might mean in my constituency. As I said earlier, the roll-out in Newport is due to start on 15 November. Given the six-week waiting period, my constituents will be lucky to receive their payment on the day after Boxing Day if it is on time, and not until the new year if it is not. No payments before Christmas will mean real hardship, and any payment received will be used to survive and to pay for food and heating, which by then—after six weeks with no income—will be a greater priority than paying rent. In neighbouring Torfaen, with the full service roll-out, 27% of Bron Afon tenants who moved on to universal credit in July had to wait an average of nine and half weeks for payment, which led to debt and borrowing from high-interest lenders.
I know that the Government will talk about advances, but they are not an adequate response. They cover only part of the universal credit claim, and must be repaid through deductions. The point is that people are being put into debt immediately. If half the number of new claimants have to rely on advance payments, the system is clearly wrong, and, as was pointed out earlier by the hon. Member for Airdrie and Shotts (Neil Gray), that constitutes an admission that the system is failing.
Kate Green
Does my hon. Friend agree that the problem is compounded by the level of deductions of third-party debt that are allowed under universal credit—for example, council tax or utility bill debt? It is higher than the level allowed under legacy systems, which means that people are left with much less money.
Jessica Morden
I absolutely agree. The point is well made.
I know that housing associations are doing all they can to help tenants, and that there are heavy demands on their advice services, not least when they are helping those who cannot go online. However, as Gingerbread has pointed out, two thirds of single parents are renting privately. What is happening to those with private landlords? Are they able to negotiate longer repayment plans?
I, too support calls from organisations such as Community Housing Cymru which want a pause in the accelerated roll-out of the full service until the problems caused by delays have been addressed, improvements have been made in relation to, for instance, the six-week waiting period and the seven days without pay, and—this was mentioned by my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle)—the issue of landlord portals has been sorted out.
Let me finally say a word about our local DWP staff, who are dedicated and extremely hard-working, although I cannot say that I have spoken to many who feel enthused. They are on the front line of the delivery of the roll-out. Their numbers have been cut, and all kinds of changes are taking place in their service. They need to be properly resourced and supported, and the Government must make that a priority.
The movement on the call charges is welcome but overdue. We now need the Government to move further. We need them to understand the very real impact on people, not least in the run-up to Christmas. They must consider the practicalities, and pause the roll-out.
Oral Answers to Questions
Kate Green Excerpts(6 years, 7 months ago)
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Guy Opperman
My hon. Friend is correct. The new state pension is much more generous for the many women who were historically worse off under the old system. More than 3 million women stand to gain an average of £550 extra per year by 2030 as a result of these changes.
Kate Green (Stretford and Urmston) (Lab)
The Minister for Disabled People, Health and Work (Penny Mordaunt)
The employment rate among disabled people has increased to 49%, and the Government are committed to getting 1 million more disabled people into work over the next 10 years.
Kate Green
In 2015, the Minister said the Government’s aim was to halve the disability employment gap by 2020, and in 2016 the Social Market Foundation said that that meant an extra 1.2 million disabled people in employment, but now the Minister tells us that the ambition is for an extra 1 million disabled people in work within 10 years. Why are Ministers becoming less ambitious for disability employment?
Penny Mordaunt
When Labour was in office, it did very well in closing the disability employment gap—by raising the unemployment level among the general population. We will take a different approach. As I have said in this place before, we will look in great detail at the local numbers—for example, the numbers of people with a learning disability coming out of education; that is what we need to get people focused on.
State Pension Age for Women
Kate Green Excerpts(6 years, 10 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Mary Glindon (North Tyneside) (Lab)
It is an honour to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this debate.
Five thousand women in North Tyneside are affected by the changes to the state pension age and many of them have contacted me about the acceleration of their state pension age. Women in this age group went straight into work after leaving school, so by the time they reach their state pension age they have already worked more than the 35 years expected for a full state pension. They have at least 39 to 44 qualifying years and have paid more than their fair share of contributions, but are losing at least three to four years of pension entitlement.
Kate Green (Stretford and Urmston) (Lab)
Does my hon. Friend agree that those women who did not contract out of the state scheme but remained in it are disadvantaged against those who did contract out, in that a pension can often be drawn early if it is a private pension that someone contracted out to, but a state pension cannot be drawn out early?
Mary Glindon
Quite right—I have nothing to add to that.
My point is that the Treasury is making quite a saving. One of my constituents, who worked until she was in her late 50s and gave up her job to look after her father—who had dementia—thought she could manage because she thought that she would get her pension at 60, but she found she was unable to claim her pension. She then had poor health herself and was forced to claim employment and support allowance with the support of her GP. That claim was denied and, despite ill health, she now has to work two cleaning jobs to support herself—that is a disgrace.
I feel both sorry for and angry on behalf of the 5,000 women in North Tyneside and the other millions of women who have been cheated of their pension entitlement by the coalition Government and this Tory Government. I hope that the Minister will disagree with his predecessor, who claimed that going further than the Government have already gone could not be justified.
Our welfare state began on 5 July 1948. On 5 July 2017, I say to the Minister that a commitment by him to further transitional arrangements for those women would be a fitting birthday tribute to that great institution.
Personal Independence Payment: Regulations
Kate Green Excerpts(7 years, 1 month ago)
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Graham Evans (Weaver Vale) (Con)
It was a privilege to serve on the Work and Pensions Committee with the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) in the last Parliament.
I wish to focus my speech on two particular areas. First, it is not the case that the Government are using the change as a cost-cutting exercise. Secondly, I will address some of the comments made by Opposition Members on mental health and physical conditions in relation to PIP.
We spend £50 billion every year on benefits—up by £7 billion since 2010—to support people with disabilities and health conditions, so, rather than being subjected to austerity cuts, these benefits have seen an increase in Government spending. That figure is 6% of all Government spending, or 2.5% of GDP. It is significantly more than countries such as France and Germany spend, and higher than the OECD average. It is more than we spend on the defence of the realm.
As I have said, this change is not, as some Members have suggested, a cost-cutting exercise. The Government have made it abundantly clear that they will seek no further savings through welfare in this Parliament. I ask my hon. Friend the Minister for Disabled People, Health and Work to reassure the House that she will continue to defend the disability budget.
The changes restore the original aim of the policy by clarifying the assessment criteria to make sure that support is targeted on those who need it the most. Nobody will receive less money than they have previously been awarded. This is not about making savings. PIP was widely consulted and voted on and debated in this House during the coalition Government.
Graham Evans
I am sorry, but I really want to make some progress so that other Members can have their say.
More than two thirds of PIP recipients with a mental health condition receive the enhanced daily living component, compared with just 22% who used to receive the higher rate under the disability living allowance. This Government are investing more in mental health support than any other before them. The figure stands at £11.4 billion this year.
Parity between mental and physical conditions is a core principle at the heart of PIP’s design. Awards are dependent on the claimant’s overall level of need, regardless of whether the condition is mental or physical.
As well as increasing spending on disabilities, this Government are challenging attitudes towards disability through initiatives such as Disability Confident. Last year, I, along with many Members of this House, held my first Disability Confident fair, bringing together 20 local businesses and support agencies to hear at first hand the benefits of employing people with disabilities.
Kate Green (Stretford and Urmston) (Lab)
I, too, congratulate my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) on bringing this important matter before the House. I want to concentrate on a couple of the misapprehensions that have arisen in this afternoon’s debate and to clarify my understanding of the position, in the hope that the Minister will confirm it.
First, on the original policy intent, we heard from my right hon. Friend the Member for East Ham (Stephen Timms) that Ministers told us during the passage of the Welfare Reform Bill in 2011 and 2012 not only that psychological stress and other conditions would be eligible to be covered by PIP, but, specifically, that the benefit would be judged on the basis not of the condition but of the overall impact on someone’s life. If psychological stress is having a significant impact on somebody’s life, why will it be excluded in assessing them for the higher rate of PIP? That simply contradicts what we were told at the time of the Bill’s passage. What is more, the Government themselves acknowledged in 2015 in the case of HL that psychological stress was to be included. They now say that was a mistake. Frankly, it is not good enough for Governments to go around making mistakes when something as important as this is at stake for our constituents.
Secondly, the Government have said that nobody will suffer a cut to their benefits. It is not clear whether they are still saying that, but to be clear, I have two things I would like to point out to the Minister. First, on 15 March, in the course of the urgent question heard in this House, the Secretary of State acknowledged to me that some people who had had their award increased as a result of the decision in the first tribunal could see that higher award reduced back to the level of the original Department for Work and Pensions award. He was very careful with his wording: he did not say that all awards would be protected but that the original DWP award would be. Does that mean that some people will, in practice, see their awards reduced?
If that is the case, when will that happen? I ask that because the second thing the Government are doing, as well as introducing these regulations, is appealing the two tribunal decisions. My understanding is that that is specifically to catch the people who currently see their benefits on a higher level, and who would enjoy that higher level of payments because the regulations would come in too late for them to be impacted and to see their benefits reduced again. Is the Minister now telling us that if the Government are successful in those appeals, they will reduce the benefits of people who got awards before the application of these regulations back to the level of the original DWP award?
Thirdly, can the Government reconcile the three cases decided in the upper tribunal on 9 March with the decision to strip out psychological stress, in part because it is a fluctuating condition? As we heard in the decisions made on 9 March in the upper tribunal, it is not just whether something is occasional that determines whether someone should be eligible for a higher rate of PIP; it is also about the overall impact of the harm caused by that condition. As we heard from my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), there is no better example of that than someone with epilepsy. They may suffer occasional seizures, but when they do, the harm they experience could be considerable, resulting in brain damage or even death. Will the Minister therefore explain how she reconciles those decisions on 9 March with the assertion that psychological stress should not attract the highest rate of award in appropriate circumstances because it is a fluctuating condition?
Several hon. Members rose—
Oral Answers to Questions
Kate Green Excerpts(7 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)
Automatic enrolment was designed specifically to help those who were under-represented in pension savings, including women. With the current rate of £10,000 a year, 70% of the new people coming into the system in 2017-18 will be women.
Kate Green (Stretford and Urmston) (Lab)
Six out of 10 people with epilepsy who were migrating from DLA to PIP and were surveyed by Epilepsy Action saw their benefit removed or reduced. That compares with two out of 10 people who are migrating overall. Are Ministers confident that assessors and decision makers properly understand the fluctuating, sporadic and life-limiting condition of epilepsy, so that they can make the right decisions?
Penny Mordaunt
We are aware of that. That is one reason why we have increased the clinical support that is available to assessors. They are all healthcare professionals, so they will have that expert advice on hand in the assessment centres. That is something that we brought in recently.
Personal Independence Payments
Kate Green Excerpts(7 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Damian Green
My hon. Friend’s last remark is precisely right, and I can give her the assurance that she seeks. PIP is about the effects on daily life or on mobility. It is not based on the underlying condition. That was the key change when PIP was introduced, and of course we are maintaining that.
Kate Green (Stretford and Urmston) (Lab)
I want to understand exactly what the Secretary of State said a few moments ago when he said that nobody would face a cut in their benefit. Did I understand him correctly when he said that, while people would not see their initial DWP benefit award cut as a result of these regulations, they could see their benefit reduced to the original award level when the benefit has been increased by a tribunal and these regulations now supersede the judgement of that tribunal?
Damian Green
That is indeed what I said. We think that there may be a handful of people whose appeals have gone through the courts in this very small period, and that money will not be clawed back from them. That is what I said earlier on.
Personal Independence Payments
Kate Green Excerpts(7 years, 2 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Damian Green
I am happy to repeat—yet again—that nobody will receive less money under PIP than they originally received in their award from the DWP as a result of the regulations we have introduced.
Kate Green (Stretford and Urmston) (Lab)
People with learning disabilities, schizophrenia and autism—the conditions highlighted by my right hon. Friend the Member for East Ham (Stephen Timms)—are more likely to feel anxious about their assessment and experience greater difficulty in conveying information about their condition and, according to my constituents, are increasingly subjected to a more hostile and aggressive assessment process. Does the Secretary of State share my concern that these people will be particularly vulnerable if the proposals are not introduced very carefully?
Damian Green
We are introducing them very carefully. I completely agree that people likely to suffer from anxiety should not be made unnecessarily anxious, which is why I am at pains to reassure them, the House and everyone else that this is not a policy change or a cut. Nobody will receive less benefit than they were originally awarded by the DWP.