Universal Credit

Lord Kerslake Excerpts

Thursday 16th November 2017 Lords Chamber

[Lord Kerslake (CB)]

My Lords, I declare my interests as chair of Peabody and president of the Local Government Association. My other interests are as listed in the register.

Universal credit stands as an almost perfect example of what the French call “the politics of the stiff neck”—a stubborn, haughty refusal to change one’s mind in the face of all the evidence to the contrary. The consequence of this stubbornness is to cause quite unnecessary misery for a large number of very vulnerable people.

I hope that today’s debate, which I congratulate the noble Baroness, Lady Hollis, on organising, will go some way to persuading the Government to change their minds. There can be few—there are none in this Chamber—who disagree with the aims of universal credit: to simplify the benefits system and make work pay. The key problem lies not in the aims but the execution.

It is a complex project that has to take account of a lot of different individual circumstances. If you are really going to make work pay, there is a cost, which goes against the relentless reduction in welfare spending. No one expected this project to be easy. Indeed, when it ran into trouble during the coalition Government, there were big issues to resolve. They were largely internal problems, however, and the pain, such as it was, was confined to Ministers and officials responsible for that implementation. The crucial difference between then and the current crisis is that the pain now will be felt by thousands of claimants and that number will grow dramatically to some 7 million people as the project is rolled out.

If anybody doubts the malign impact that universal credit in its current form is having, I would refer them to the Smith Institute Report Safe as Houses: The impact of Universal Credit on Tenants and Their Rent Payment Behaviour, commissioned by the London Boroughs of Croydon and Southwark, and Peabody. Seven hundred and seventy-five rent payment accounts of tenants starting universal credit in August and October 2016 were analysed and compared with 249 tenants starting on housing benefits at the same time—a control sample. In addition, 36 in-depth interviews and four focus groups were held. The results are absolutely clear cut: growing rent arrears, with high arrears at the start that are never fully recovered; delayed payments and consequential financial hardship; a one-size-fits-all approach that does not take account of the individual circumstances of tenants; and severe impacts on those tenants who are the most vulnerable. The statistics tell a story but the individual cases, as we have heard today, are heart-rending. What is particularly sad is that the feelings claimants now have about universal credit—which was intended to help them—are generally, if not universally, negative.

Claimants really do not want to be in debt. They do not want to rely on friends or, even worse, on loan sharks. Our research at Peabody has calculated that without change, 41,000 children in the UK are at risk of being in penniless homes over this Christmas due to the wait for universal credit. I think Members on all sides of the House will see this as utterly intolerable.

What can be done? Some good practical steps can be taken now: remove the seven-day wait at the start of a new claim; reduce the waiting period to two weeks, as with housing benefit; offer everyone alternative payment arrangements—let the claimant make the decision on whether they want their rent paid direct, not have the state decide what is good for them; inform everyone moving on to universal credit that advance payments arrangements exist; and put in place a comprehensive support package to help with the application process. These measures will not deal with all the deep issues with universal credit at the moment, but they would be an incredibly good start. I add that the Government, if they are serious, should also establish an independent body to review the progress and impact of universal credit at each stage of the rollout. I say to Ministers that these are not big asks; they do not threaten the future of the project. Why on earth do the Government not agree them now?

Good government is not easy. We make mistakes; we learn from them. But to press on with this project without amendment when there is such clear evidence of the distress and hardship it will cause is not just bad government—it is cruel. I look forward to the Minister’s response.

[Lord Young of Cookham]

My Lords, the situation is becoming critical. More and more questions are being asked of the Minister but she has less and less time in which to answer them. I urge noble Lords to make sure that their speeches end by the time the clock hits five minutes.