Oral Answers to Questions

Laura Smith Excerpts

Monday 7th January 2019 Commons Chamber

[Amber Rudd]

My hon. Friend is right. Important though anecdotal evidence is—that is what MPs collect when they visit their job centres—it will also be absolutely critical to have full empirical evidence as well. In June last year, we published the universal credit full business case, which showed that universal credit will move more people into work. Once we have completed the managed migration pilot, we will also publish an impact assessment on the first phase.

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

Figures from the Trussell Trust show that food bank use increased significantly in the 12 months after the full-service roll-out of universal credit in Crewe and Nantwich. Universal credit was intended to lift people out of poverty. What has gone wrong?

[Amber Rudd]

I hope that the hon. Lady has seen an improvement since the roll-out started in Crewe and Nantwich—

[Laura Smith]

indicated dissent.

[Amber Rudd]

I suspect that if she speaks to the jobcentre there, she will be reassured that the number of people being paid on time has vastly risen—

[Laura Smith]

indicated dissent.

[Amber Rudd]

I would ask the hon. Lady to come back to me, if she will, and to have a conversation about this. It is absolutely true that when universal credit initially started, the payments were not getting out in time and advance payments were not available. That is now being changed, and claimants are universally noticing a distinct difference.

Defined-benefit Pension Schemes

Laura Smith Excerpts

Tuesday 10th July 2018 Westminster Hall

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

I beg to move,

That this House has considered protecting defined-benefit pension schemes.

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to introduce this important debate. I welcome my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) and the Minister; their presence underlines the importance of this issue.

There are few more precious assets than a pension. Pensions are not benefits; they are deferred wages deducted from the previous earnings of responsible working people who decided to save diligently during their working life, in return for financial security in retirement. As we all know, the funds that are made up of those savings invest huge amounts in our economy, as well as providing for our pensioners in retirement. Dignity in later life is something that every Member present values immensely. We should all feel duty-bound to do everything we possibly can to guarantee that for each and every pensioner in our country, without exception.

Let me begin by stating from the outset that I am no expert on pensions. I have called this debate because it is of the utmost importance to workers in my constituency. I believe that will be the case for all Members here today. It is incumbent on us all to develop our understanding of the key issues to ensure that the livelihoods of pensioners up and down our country are safeguarded, and to ensure dignity in later life for all.

Providing our pensioners with an income that they can live on comfortably is a key pillar of dignity in later life. The fight against pensioner poverty must therefore include a determined effort to provide the highest quality pensions in the most secure and sustainable way. Defined-benefit pension schemes have offered some workers precisely that for many years. The attractiveness of an affordable scheme that enables them to plan their retirement by knowing in advance precisely how much they will be paid is undoubtedly a key factor for many workers when choosing their employer. If we are to encourage more workers to save, responsible choices must be rewarded. Any pension fund deficits that arise are certainly not the fault of the scheme member, who has simply chosen to sacrifice pay today for pension tomorrow so that they have an adequate income after they retire. We must certainly avoid sending any message that deters current and future generations of workers from saving for retirement.

This issue is particularly topical in my constituency. Not only are many workers affected by the recent collapse of Carillion; more than 1,000 workers at Bentley Motors are in discussions with their employer about the future, and potential closure, of their DB scheme. Former Rolls-Royce employees, some of whom have been paying into the scheme for almost 50 years, face the prospect of serious financial hardship in retirement, with the potential to lose hundreds of thousands of pounds. The younger workers in the scheme stand to lose the most. I will come on to intergenerational unfairness towards the end of my speech, but I would welcome a commitment from the Minister to discuss this particular case with me in the near future, to see what support he can give to scheme members in Crewe and Nantwich.

Auto-enrolment has been a success in that it has increased the number of workers saving for retirement, so I applaud the Government’s continued efforts in that respect. However, auto-enrolment cannot be seen by employers as a retreat in which they can hide from their responsibilities under existing DB schemes. DB schemes appear to be working well—the Minister said so in his address to the TUC earlier this year. He also said that where employers can, they should continue their responsibilities. I wholeheartedly agree with him. Research by Mercer published earlier this month suggested that DB pension deficits at FTSE 350 organisations have more than halved since January. In 2015, FTSE 100 companies paid around five times as much in dividends as they did in contributions to their DB pension schemes.

The Green Paper that the Government published last year states that in 2015, companies with a DB pension scheme deficit paid out £53 billion in dividends—25% more than their disclosed deficits. It therefore seems logical to conclude that those companies have the ability immediately to repair their pension scheme deficits by feeding dividends into deficit repair contributions.

I do not pretend that there are no issues with individual DB schemes, but in aggregate such schemes do not appear to be inherently unaffordable. We must remember that they provide decent, good-value pensions. Defined-contribution schemes require much larger contributions to have a realistic chance of providing benefits equivalent to those paid by DB schemes. The value of the pot in a DB scheme is far higher in nearly every case, and both scheme members and their employer will have paid less for it.

There also appears to be an issue with overly risk-averse assumptions threatening DB schemes. Pensions Regulator guidance allows schemes to base the discount rate on the rate of return that assets held by the fund are expected to generate over the lifetime of the scheme, yet trustees seem reluctant to use that method. There is concern that the corporate failure of Carillion will create an even more risk-averse climate.

[Dr David Drew (Stroud) (Lab/Co-op)]

I apologise for missing the start of my hon. Friend’s excellent speech. Does she agree that one of the issues is that the Pensions Regulator is unaccountable? I have had a particular issue given what has happened post-Carillion, and I have been trying to find out how the Pensions Regulator makes decisions, which is not at all clear. Does she agree that that needs to be brought up in this place so that there can be proper accountability?

[Laura Smith]

I thank my hon. Friend for making that point. From my conversation with the Minister before the debate, I am sure he will be happy to talk about that in his speech and when he meets the Pensions Regulator.

The Green Paper shows that there has been a clear decline in gilt yields over the past two decades. The public sector trade union, Unison, is of the view that most schemes that did not hedge their risk should seriously consider using that discount rate method.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on bringing this matter to the Chamber. On average, people believe that their living expenses will account for 34% of their pension, yet they will actually account for 49%. Does she agree that more should be done to ensure that people make the most of pension schemes by paying in themselves? I think that is the thrust of what she is saying—that individuals should make more effort rather than relying on employer contributions, which in many cases have been found to be suspect.

[Laura Smith]

I apologise to the hon. Gentleman—it was hard to hear him because of the sound of the fans. I will come on to those points.

Basing assumptions on gilts may artificially inflate deficits and future service costs for the sponsoring employer and scheme members. That may lead to the unnecessary closure of schemes to new members and future benefit accrual. Unison’s experience is that some employers would rather pay more and use the increase in costs as an excuse to close their DB scheme, saving money by transferring members into a DC scheme with lower employer contributions, which results in reduced pension benefits for scheme members.

Not only are DB schemes desirable, but they can be affordable and good value for money. We should do everything we can to protect them. The Government’s role should be to provide an adequate regulatory framework, meaningful enforcement and appropriate incentives to help encourage sound decision making and ultimately to provide decent pensions. I welcome the Government’s White Paper and the regulator’s ambition to be clearer, quicker and tougher.

I hope that the Minister can provide me with a little more clarity or reassurance about three issues. First, there appears to be no new relief for employers struggling with DB liabilities. Although I welcome the suggestion that there should be penalties for directors who do not take sufficient care of scheme members’ interests, without support for struggling employers, tougher rules may simply incentivise more of them to close DB schemes in favour of DC schemes with inferior pensions for workers. Secondly, what additional resources are being provided to ensure TPR has the capability and capacity to effectively regulate the sector?

Thirdly, encouraging consolidation over alternative options would not prioritise the protection of members’ benefits, which should be the Government’s primary focus. I understand that insurance buy-out remains the best solution for guaranteeing member benefits in DB schemes. Securing member benefits should be paramount. With an insurer, members are almost certain to receive their benefits in full. The Association of British Insurers believes that prices are the best consultants have ever seen, and that that option is available to smaller schemes.

Although I understand there is a need to provide options for employers that simply cannot secure a buy-out, any new framework should not incentivise consolidation purely on the basis that it is a cheaper option. The risk of investment failure was highlighted by the Pension Protection Fund in a submission to the Select Committee on Work and Pensions. In the absence of a substantive employer, the security of members is entirely dependent on the investment performance of the fund and the associated buffer. Consolidation is therefore less secure than buy-out, and profit withdrawal in years of good investment returns may lead to scheme failure by preventing a strong build-up of reserves.

Consolidation also means that risk, rather than being dispersed across several schemes, becomes focused on one investment strategy. Different consolidators may be inclined to pursue the same investment strategy, resulting in a high correlation of risk in the DB sector. Obviously, that may lead to all schemes failing at the same time. I am also concerned that younger members may shoulder the risk of commercial consolidators collapsing. We should not pursue any policy that leads to greater intergenerational unfairness.

To put it plainly, I am concerned that the option to consolidate or transfer into a super-fund may be seen by some employers as another bolthole to escape their liabilities on the cheap.

[Julian Knight (Solihull) (Con)]

I thank the hon. Lady for securing this important debate. She is making a very good speech in many respects, but one of the concerns about DB schemes is that some that have existed for a long time have few members but a large legacy. A scheme may have only 100 employees, for example, but a very large legacy behind it. I wonder whether she recognises that super-consolidation may be an option for such schemes.

[Laura Smith]

I touched on why I have concerns about that.

As I said, securing member benefits should be paramount. What reassurance can the Minister give me that the eventual framework will ensure that employers’ decisions are focused on that objective? If an employer has the means to get a buy-out and that is the best way to guarantee scheme members’ benefits, it should get a buy-out. We need a framework that incentivises decision making on that basis.

Will any legislation that is enacted be applied retrospectively to cover commercial consolidators formed in the intervening period? I am concerned that a two-tier system of regulation would provide loopholes for those willing to exploit them. Directors of sponsoring employers must have personal liability—there must be criminal offences and heavy fines.

I support the White Paper’s push for clearer, quicker and tougher regulation. I commend the Minister’s efforts and I hope that the White Paper leads to measures that further protect defined-benefit pensions. However, I remain concerned that over-zealous prudence and assumptions threaten otherwise affordable DB schemes. There should be additional support and relief for struggling schemes. I would like to be confident that TPR will be given the resources it needs to have the capability and capacity to regulate effectively in the light of any changes. I am concerned that consolidation—although it may be the best option for some schemes—will be seen as an acceptable cheaper option that does not prioritise protecting scheme members’ benefits when more secure alternatives, such as buy-out, are available and within the means of the employer.

We must endeavour to build a framework that incentivises workers to save responsibly and deters directors from behaving irresponsibly. Paying dividends must not be prioritised at the expense of protecting pensions. I would be grateful if the Minister responded to the issues I have outlined and committed to looking into the ongoing matter at Bentley Motors, which is of concern to more than 1,000 people in Crewe and Nantwich who work for the company, and to working with me to promote a dialogue that has the protection of scheme members’ benefits at its heart.

[Several hon. Members rose—]

--- Later in debate ---

[Laura Smith]

I thank hon. Members for attending this important debate. It is great to hear the Minister respond to the issues that I raised, and I thank him, especially for agreeing to meet me to discuss the ongoing issues at Bentley Motors. I also thank the hon. Member for Birmingham, Erdington (Jack Dromey) for his detailed response and for his continued efforts. I know he will continue to keep a close eye on the issue and to hold the Government to account.

Sustainable options need to be made available for smaller schemes, and I welcome some of the ambitious plans that the Minister and other hon. Members have clearly set out. My point was not that the policy should not be pursued, but that proper safeguards should be put in place to ensure that employers consider all the available options with a single focus on protecting the benefits for scheme members.

The debate has demonstrated that there is much common ground when it comes to defined-benefit pension schemes, which I welcome. I am also pleased that there has been great continuity of policy from the last Labour Government, which I hope continues.

The contributions of hon. Members have been interesting and informative. It is an incredibly complex topic, and it is incumbent on all of us to learn from each other and from the wealth of experience and expertise outside of this place to ensure that the Government pursue an evidence-based approach to protecting pension benefits for all our constituents.

Question put and agreed to.

Resolved,

That this House has considered protecting defined-benefit pension schemes.

Oral Answers to Questions

Laura Smith Excerpts

Monday 26th March 2018 Commons Chamber

[Kit Malthouse]

My hon. Friend raises an extremely important point. As he may know, we have just finished a consultation on what greater powers we can take to ensure proper and efficient recovery for those in receipt of support. We are looking at a series of measures, not least integrating our information systems much more closely with those of Her Majesty’s Revenue and Customs, so that we have a fuller picture of people’s income. We will be looking at proposals to make estimates of unearned income and, indeed, imputing income from asset values for those who attempt to conceal their income but still hold very significant assets. In the final analysis, we may well take powers, depending on the results of the consultation, to deny people a passport—and remove their passport—if they refuse to pay.

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

7. What assessment she has made of trends in the number of in-work households living in poverty.

[Mr Jim Cunningham (Coventry South) (Lab)]

10. What assessment she has made of trends in the number of in-work households living in poverty.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Kit Malthouse)]

As Members would expect, we make constant assessments of the level of poverty in the UK, given that our primary purpose as a Department is to stimulate and support social mobility and give people the tools and assistance to build a better life. There are 1 million fewer people living in absolute poverty since 2010, and working families are around four times less likely to be in relative poverty than working-age adults in workless families.

[Laura Smith]

Even though they are in work, many families in my constituency of Crewe and Nantwich are struggling to feed their children. That suggests that work is no longer an escape route out of poverty. The Institute for Fiscal Studies predicts that child poverty will increase from the 4.1 million recorded in the Government’s latest figures to 5.2 million by 2022. The Government originally claimed that universal credit could lift 350,000 children out of poverty. How many children do they now expect to lift out of poverty, and by when?

[Kit Malthouse]

I hope that no one in the House is complacent about poverty, particularly child poverty. As I said in answer to earlier questions, and as my right hon. Friend the Secretary of State has said, we are entirely focused as a Department on doing what we can to try to deal with these issues, but they are complex and deep-seated, so the solutions will be, too. Having said that, we believe that there are two primary causes and two primary solutions, the first of which is work and the second education. We are throwing everything we have at that to try to improve things. If we look back at the results thus far, we see 1 million fewer people in absolute poverty, 300,000 fewer children in absolute poverty since 2010, and half a million fewer working-age adults and 100,000 fewer working-age lone parents in absolute poverty since 2010.

Personal Independence Payments

Laura Smith Excerpts

Wednesday 31st January 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Hosie.

Let us imagine how anxious someone must feel, knowing that they have to sit through an interrogation process that will deem whether they are quite disabled enough to be eligible for a helping hand. Not only does that person have the already huge day-to-day disadvantage of being disabled or suffering from mental illness, but now, thanks to the Government, they are forced to sit through a point-scoring process to judge whether they are fit to work. PIP is not fit for purpose when it comes to many physical conditions, and it certainly has not been fit for purpose for those suffering from invisible illnesses. How disgraceful that in 21st-century Britain a Government are implementing public policies that clearly disadvantage those with mental health problems.

My constituent, George, suffers from a range of debilitating conditions, and he is prescribed a huge amount of medication just to enable him to get through the day. He is also almost completely reliant on the use of a wheelchair. After working for his entire life, George, at 63, thought that when his health deteriorated, there would be support to help him to survive and pay his bills. At first, that support was there, and George received higher rate mobility and the highest rate care components of disability living allowance. However, when he was called for his PIP assessment, things took a dramatic turn for the worse.

George will not mind my saying that he is reaching an age at which he would be likely to retire soon if he was fit and well, but he has been put through a process whereby he was tested to see whether he was disabled enough. One observation that was made during his assessment was that he could walk unaided for 20 metres, but not 50. That is not considered a restriction on his ability to walk. Leonard Cheshire Disability, the charity for disabled people, makes the point that the change to the criteria obviously means that far fewer individuals qualify for the enhanced mobility component of the benefit. That is penny-pinching at the expense of someone’s dignity.

The charity has also gathered the information that 74% of disabled people surveyed did not feel as though the assessor understood their disability. That was and remains one of George’s biggest frustrations: he did not feel that the assessor listened to him, understood his needs or treated him with any compassion. How can someone hold so much weight in determining the future of an individual’s life without being held accountable? Also, why cannot assessors consult experts in any condition or disability to help to fill their knowledge gaps? That would surely ensure that they asked the right questions in the assessment and accurately determined the individual’s ability to carry out an activity reliably, repeatedly, safely and in a timely manner.

[Rosie Cooper (West Lancashire) (Lab)]

Will my hon. Friend give way?

[Laura Smith]

I am sorry, but I must get through my speech; I am conscious of the time.

George was assessed by Atos on 1 June 2017. He is now going through the process of appeal, but the timescale is being put further and further back and he still does not have a date for his case to be heard. He is struggling to survive financially, and he has said that he is feeling more depressed every day and having sleepless nights. He has stated—this is the important bit, to me—that if it were not for his wife, he would feel as though he could not go on any more, and he has contemplated not taking the medication that he needs. The way in which he and many, many others in my constituency have been treated is absolutely diabolical. I urge the Government seriously to stop burying their head in the sand and face up to the reality that has been created by their own policies.

[Stewart Hosie (in the Chair)]

I intend the summing-up speeches to start after the next speech, so if anyone wants to make a last intervention, they know what to do.

Financial Guidance and Claims Bill [Lords]

Laura Smith Excerpts

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

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

It is an honour to follow the hon. Member for Redditch (Rachel Maclean).

Even though my hon. Friend the Member for Bristol North West (Darren Jones) has left the Chamber, I thank him for his very honest speech. I, too, remember the anxiety that filled my childhood home when the Provident came knocking. Both my parents also worked. Perhaps the hon. Member for Gloucester (Richard Graham) could listen and learn from people who have experience of living through hardship, rather than moaning about something that is political being political—after all, I thought we were all politicians.

[Richard Graham]

Will the hon. Lady give way?

[Laura Smith]

No, sorry.

The town of Crewe, in my constituency, has in recent years been identified as one of the most indebted places in our country. The problem has not gone away. Last year, statistics published by the Money Advice Service suggested that average consumer debt per person in Crewe was more than 20% higher than in the rest of the UK, and we know the problem is permeating beyond the most deprived areas. Problem debt is creeping into every corner of our communities, and if the bubble bursts, the effects are likely to be profound and lasting.

That is why I want to talk about one aspect of the Bill: the clauses that enable the Government to introduce a debt respite scheme. With falling wages, the rising cost of living, housing problems, insecure work, childcare costs, welfare cuts and rampant inequality, no single Act of Parliament will fix all the underlying causes of rising household debt. At the same time, the people who voted for us literally cannot afford to wait for the Government to fix our broken economy. That is why I stood on a manifesto that promised to introduce a debt respite or breathing space scheme to help those working families who have been struggling to keep their heads above water. It is the provision to introduce such a scheme that makes the Bill such an important priority for my constituency.

The debt charity StepChange reports that 70% of its clients fell into debt because of an unexpected negative event, such as job loss, reduced income, illness or a relationship breakdown, and 60% of clients told the charity that their financial situation stabilised once creditors agreed to freeze further interest, charges and enforcement action. Without the protection of a statutory breathing space scheme, pressure to repay debts at an unaffordable rate and threats of enforcement can leave households cutting back on everyday essentials, such as food and heating, and falling further behind on bills.

This Bill, in itself, does not provide the solutions, but it does provide an opportunity for the Government to make a massive difference to the lives of many ordinary working people. How the debt respite scheme is set up is crucial. For example, the initial period must be long enough for people to seek debt advice and agree a long-term plan to resolve their debts. On top of that, regulated debt advisers should also be able to extend the period, where that is deemed necessary.

The Government’s proposal of a six-week initial period is nowhere near long enough. According to StepChange the evidence in Scotland, where a comparable scheme already exists, shows that on average it takes four months to activate a plan after the first debt advice session. In any case, the Government should also commit to reviewing the length of the initial period after the scheme is introduced, and to extending it if there is evidence to support doing so.

Statutory repayment plans must also be a feature of the scheme, with the flexibility to ensure that the most effective plan for each family’s circumstances can be put in place. There is no one-size-fits-all solution. A scheme that does not meet those needs will be a huge missed opportunity for the Government and could cost us all dearly in the not-so-distant future.

The link between debt and mental health is well established. Picture the parent who is filled with dread and anxiety every time they answer the phone or open an envelope. The Royal College of Psychiatrists tells us that half of adults with debts suffer with mental health problems, and the Children’s Society tells us that children living in families with problem debt are at greater risk of developing mental health problems later in life. Introducing an effective debt respite scheme not only makes good economic sense, but should feature as part of the Government’s mental health strategy.

I support the Bill as a step in the right direction, but a debt respite scheme is long overdue, so we need the Government to commit to a date and to ensure that the scheme is not a token gesture, but a genuine effort to protect working families from this growing problem in our society.

Oral Answers to Questions

Laura Smith Excerpts

Monday 18th December 2017 Commons Chamber

[Mr Speaker]

The right hon. Gentleman will experience a long journey from East Ham to Torbay. We empathise with him on his long journey.

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

16. What assessment his Department has made of trends in the level of spending on social security for working households since 2015.

[The Secretary of State for Work and Pensions (Mr David Gauke)]

Since 2015, the level of social security spending for families on in-work benefits has reduced from £28.9 billion to £26.7 billion in real terms. This has happened during a period when we have introduced the national living wage, employment has reached record levels, free childcare has doubled, the personal allowance has increased and income inequality has continued to fall.

[Laura Smith]

With 8 million people living in poverty in working households and 28% of my constituents earning below the voluntary living wage, what action is the Secretary of State taking to address labour market inequalities with low-paid, low-skilled and insecure work?

--- Later in debate ---

[Mr Gauke]

I can certainly assure my hon. Friend that we will continue to listen to constructive critics and those who want to make sure that universal credit works. In doing so, I thank him for his positive and constructive engagement. It is very clear that Conservative Members are united in ensuring that we deliver universal credit successfully.

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

T5. Some 68% of personal independence payment decisions taken to tribunal are being overturned by judges, so is it any surprise that my constituent Mr Parish and others in his situation have no faith in the assessment process? What assessment has the Secretary of State made of the accuracy of PIP assessments in the light of statistics that show that there has been a ninefold increase in complaints to the Department in just one year?

[The Minister for Disabled People, Health and Work (Sarah Newton)]

I thank the hon. Lady for the opportunity to make this clarification. As I have mentioned before, 8% of decisions are taken to appeal, and only half of those are upheld. I appreciate that every one of those people is disappointed with the result, and we are working tirelessly to improve the process. But, overall, most people get a good decision on time, and their benefits.

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.

Universal Credit Roll-out

Laura Smith Excerpts

Tuesday 24th October 2017 Commons Chamber

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

Last week, I shared with the House my own experience of benefit delay as a single parent when I was working as a teacher. We all sat and listened as Members from across the House voiced their concerns—and their constituents’ concerns—about the impact of universal credit. We also heard some horror stories—only they were not stories; they were accounts of ordinary working people living through the so-called reforms that this Government have insisted on pushing through. The concerns raised on the Opposition Benches were echoed by Gingerbread, Citizens Advice, Crisis and—indeed—some Members on the Government Benches.

Surely the Government do not plan to ignore the decision made by this House and to carry on regardless? The six-week wait is forcing people into further debt. My constituency of Crewe has been identified as one of the most indebted places in the country, with almost 4,000 children living in poverty. My constituents literally cannot afford to be subjected to this punitive programme.

Will the Government admit that the six-week wait is nothing more than a penny-pinching exercise? How dare they patronise us with their excuses? Do they really expect me to explain to my constituents that the Government’s six-week wait is there to teach them how to manage their finances better? We keep hearing the stock defence that universal credit is getting more people into work. What type of work is that—secure work, work that pays a real living wage? We all know what lies behind those unemployment figures—poverty pay and precarious work. The truth is simply that this Government’s policies are hurting ordinary working families, hurting the poorest and hurting the most vulnerable in our society.

We were told that this policy would “make work pay”, but the Institute for Fiscal Studies says that a further 3 million working families will be made on average £2,500 a year worse off. Food bank referrals have increased by more than double the national average in areas where universal credit has been fully rolled out.

The Government have finally listened to the Labour party and stopped ripping off constituents with their premium charge helpline. They now need to listen to the calls of charities and councils and immediately pause and fix the roll-out of universal credit, before more people are pushed into debt, hunger and homelessness. A pause would stop the rapid increase in the number being brought under their programme. I ask the Secretary of State to outline his response to the many concerns that have been brought to his attention again today. This is the Government’s last chance to show that they do have some heart, that they can see sense and that they respect the decisions made by this House; otherwise, they risk consigning themselves to the dustbin of history as a Government who lack compassion, competence and credibility in equal measure.

Universal Credit Roll-out

Laura Smith Excerpts

Wednesday 18th October 2017 Commons Chamber

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

Today, I hope to give the House an insider’s look at what it can be like for a single parent relying on the benefit system. I became a single parent when my son, who is six, was 14 months old. I was working as a teacher and had no option but to drop my hours and apply for working tax credit. I experienced the process of benefit delay and went many weeks focusing on feeding my son meals while I survived off cereal.

During that difficult time, I felt the pressure of trying to manage my bills and make my rent commitments while always trying to remain a strong and capable parent for my child. I cannot stress enough how tough life can feel as a single parent. Not only are you dealing with the trauma of a failed relationship and the difficult process of everyone involved adjusting to the new circumstances, but many, like me, can find themselves in extreme financial difficulty where it is easy to become trapped in a spiral of debt and benefit uncertainty while juggling child care.

I find it heartbreaking to hear stories from my constituents, who come to me with similar problems due to universal credit. Take Sarah, for example. She was advised by the universal credit helpline to register that her relationship had ended and was assured that that would not close her claim. However, that advice was incorrect and her claim was closed, meaning that she had to go through the entire process again. Rent arrears then built up, and Sarah had to take out a loan to help her get through. Without the support of her family, she would have fallen apart—without the support of my family, I would have fallen apart. What about those people who do not have that support? With around a third of single parents already in debt before the roll-out of universal credit, how can the Government justify a policy that threatens more financial insecurity?

Then we have the patronising insinuation from the Government Benches that getting people used to monthly pay to prepare them for work and the management of their own budgets is easily achievable. That is typical of the approach taken by a party that refuses to accept that its own ideology could possibly be flawed. Instead, it seeks to condition human behaviour so that people are nudged into acting rationally. Convinced that our society cannot be broken, the Conservatives preach from their positions of privilege about the need to change behaviours instead of attempting to make any meaningful change to the structures within our society that leave millions of people impoverished, but leave their own people richer than ever.