Universal Credit Project Assessment Reviews

Laura Smith Excerpts

Tuesday 5th December 2017 Commons Chamber

[Laura Smith (Crewe and Nantwich) (Lab)]

I want to thank my right hon. Friend the Member for Birkenhead (Frank Field), who is not here at the moment, for speaking so openly. This is 2017. How can stories like that be commonplace? As we have just heard, universal credit is a perfect example of how this Government can detach themselves from the very real suffering that they have inflicted on their citizens, through the blinkered belief that they know what is best. Their main argument is to discredit the previous tax credit system, saying that it encouraged people not to enter work. As someone who had to rely on that tax credit system, I believe that I am somewhat more qualified to tell the Government about some of the real problems in the system. They include low wages, high childcare costs, huge rental expenses and extortionate bills.

The Government set about trying to label people like me as scroungers or shirkers. They should try hearing every day how people like me should not have children if they cannot afford them. Single parents, the sick and disabled are penalised by a Government who think it is okay to demonise those who are struggling, while the people controlling the system avoid paying taxes and get richer and richer. And when we call the Government out, they tell us we are scaremongering. That is their rhetoric, but this is life.

Universal credit is a system that supposedly incentivises people to get back into the workplace. Do the Government actually know what that looks like? I say to Government Members that people have no choice but to take jobs on zero-hours contracts or temporary work that could cease at any moment. They have to rely on that insecure work, while private landlords will not touch them with a bargepole. If the Government prioritised creating secure jobs with decent pay, helping families to get into safe, secure and affordable housing and helping parents practically with childcare costs, they would soon find that they had a more productive workforce and that the economy grew.

My constituency of Crewe and Nantwich had full universal credit rolled out in July this year. I will share some of the so-called success stories that have come into my office. I have a constituent who is a single parent with two children. She went to university and now works full-time in the prison service. She has to put both children into full-time childcare, but the childminders require payment up front, so the week she started her job, she had to get an overdraft to pay the childminding fees. She made an application for universal credit, but before her first payment was even received, she had to pay for the childcare again, which was the equivalent of her take-home wage. At that stage, she had nothing. She had no wages left and no overdraft to dip into as it was totally maxed out. She was taking out loans just to feed her children, and by the time her payment came, it was only two weeks before the childcare fees were due again. She went to university to better herself and to provide for her children, but the system has plunged her into poverty and made her reliant on high interest payday loans. We put in a food bank referral for her, but she struggled to collect the parcel because of her work commitments. Thankfully, my office was able to arrange for it to be delivered; otherwise, her family would have gone hungry.

Another example is Cornelli, a self-employed mum with a child of two and a new addition on the way. She is building a photography business. With her previous child, she was able to claim tax credits alongside maternity allowance. However, under universal credit, her maternity allowance will reduce the amount of universal credit she receives, pound for pound, as it is considered a benefit. If she were not self-employed but in normal work, she would receive statutory maternity pay, which is treated as income. Under universal credit, she will be £600 a month worse off than she would be under the tax credits system. This Government are unfairly penalising the self-employed. In addition to deducting all of her maternity allowance, they have lost out on her partner’s disability premium under the new system.

Finally, another example of the Government’s “success” is the situation faced by Mr Rodgers, who had issues with his previous employer, who paid him for three months’ work in one lump sum. Despite him uploading the wage slip to that effect on his journal, those administering universal credit now think he earned much more money in one month than he did and as such is not entitled to universal credit for that month. Had he been paid monthly, he would have been entitled to a payment each month.

Universal credit is not tailored to meet the reality of the UK economy. It needs to be adapted to be able to deal with changes in circumstances as and when they happen. Given the Government’s refusal to pause and fix universal credit despite a unanimous motion in this House supporting a pause, it is even more vital that they come clean with their own assessment of the risks involved.

I stand here as a voice for my constituents, who are living and breathing this flawed system, and ask again: listen to them, please—this simply is not fair.