Universal Credit

Lord Shipley Excerpts

Thursday 16th November 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I thank the noble Baroness, Lady Hollis, for enabling us to have this debate and for her forensic examination of the problems of universal credit. This debate is important for two reasons: first, the evidence is now conclusive that there is a major problem with the rollout of universal credit and, secondly, there is an opportunity for the Chancellor to do something about it in the Budget next week.

The evidence shows that the way universal credit is working is forcing more and more poor people into rent arrears and into greater use of food banks. The Trussell Trust has demonstrated that in those areas where universal credit has been introduced, the use of food banks has increased by nearly one-third compared with just over 10% in those places it has not been introduced. As we get closer to Christmas, those pressures will worsen.

The principles behind universal credit remain important. We need a simplified benefit system, and work should pay. However, the problems that have arisen suggest that the rollout of universal credit should be paused until those problems have been resolved. First, we have to shorten the period that recipients have to wait for their payment. It is unreasonable to make people wait for six weeks, given that they are inevitably people with few resources. Secondly, monthly payments are intended to replicate the world of work, but how many monthly-paid employees would be happy to wait for their money until at least seven days into the next month? Anyway, 10% of all employees are actually paid weekly. Why should universal credit claimants be treated differently from weekly wage earners? Thirdly, around 20% of those entitled to a full payment face delays caused by forms being incorrectly completed. Many of these people need help completing forms, and the Government have to do more by building in the availability of personal help to their standard procedures. They should not assume that everyone has the capacity to fill in the forms themselves.

I am grateful to Thirteen Housing Group, which manages nearly 33,000 properties, mostly in Tees Valley, for its advice on universal credit in Hartlepool, where full service went live last December. Its figures on housing debt are disturbing. I remind the noble Lord, Lord Farmer, that the level of debt caused by universal credit is real and not scaremongering. At the end of August this year, the average debt of universal credit recipients who were tenants of Thirteen Housing Group was £722.66, compared to an average debt of £418.92 for all Thirteen Housing Group tenants. As for the numbers of individuals affected by debt caused by universal credit, 1,008 out of 1,229 in Hartlepool—that is 82% of all those in receipt of universal credit—were in debt in August. This compares with 11,524 tenants out of more than 32,000 customers across the whole of the Thirteen Housing Group—that is 36%—who were in debt at that time.

The evidence that the operation of universal credit is causing rising debt and increasing worries to tenants is now clear for all to see. Surely the basic principle should be this: tenants need to receive the right amount of money at the right time to pay their rent and not get into arrears. I hope that the Minister will agree, when she comes to sum up, that the time has come for the Government to make reform of universal credit a priority. I hope very much that the Chancellor will do that next week.