Universal Credit Roll-out

Lucy Frazer Excerpts

Tuesday 24th October 2017 Commons Chamber

[Debbie Abrahams]

My hon. Friend is absolutely right, and that is why this debate is so urgent—we cannot wait. Although, yes, this is still a small proportion of the full number of people who will have universal credit rolled out to them, this amounts to a 63% increase in the number of people who will be on full service over the next six months.

[Lucy Frazer (South East Cambridgeshire) (Con)]

Does the hon. Lady accept that 50% of people who have received universal credit have actually received it early and applied for an advance payment?

[Hon. Members]

It is a loan!

--- Later in debate ---

[Debbie Abrahams]

Again, my hon. Friend makes a very important point. I will come on to all the different issues. I have raised the so-called advance payment, which is in fact, as I have said, a loan—it has to be paid back within six months.

[Lucy Frazer]

Will the hon. Lady give way?

[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.

[Lucy Frazer]

Will the hon. Lady give way?

[Debbie Abrahams]

I will not; I am sorry.

My third ask is that the Government reconsider closing one in 10 jobcentres at the same time as they are rolling out the programme. It is nonsensical that those closures are happening at the same time.

Finally, given the latest assessment from the OBR, which shows a projected 5% underspend in tax credits, which is equivalent to £660 million, will the Government commit to investing that money back into the programme, for example to eliminate the two-child limit? I also remind the Minister of my earlier question about lifting the social security freeze.

All this is reason for the Government to respect the will of the House—this country’s elected representatives—and pause the universal credit full service roll-out. I stand ready to work with them in the national interest to address these problems and avert the disaster that is universal credit.

--- Later in debate ---

[Neil Gray (Airdrie and Shotts) (SNP)]

Thank you, Mr Speaker, for the opportunity to debate universal credit again today, and well done to the shadow Work and Pensions Secretary for securing today’s debate.

In my two and a half years in this place, I have become accustomed to some big, historic events happening, such is the nature of the era of politics we are living through right now. Last Wednesday, we witnessed something very rare: not only a Government losing an Opposition day motion, the first time that has happened for over 40 years, but a Government refusing to concede an inch to try to win the vote and Mr Speaker giving as close to a rebuke as is possible for the Chair to give to those on the Government Benches.

I pay tribute to you, Mr Speaker, in that regard. I do not believe the Government would have had any intention of respecting last week’s debate, last week’s vote, or indeed the conventions of this House, were it not for you challenging their behaviour in such a way. The statement from the Leader of House at business questions on Thursday was apparently to be the sum total of the Government’s response to the defeat. It gave no indication of when the Secretary of State would return to the House following the debate, nor did she say which areas of concern the Government were looking to act on. The Government’s behaviour last week encapsulated perfectly their approach to difficult decisions, whether they be difficult because of divisions within the Cabinet, divisions within the Conservative party or divisions among our constituents.

Either way, this is a Government paralysed by fear, indecision and a complete lack of strategic direction, a Government desperate to deflect, defer and delay. I say that because they have basically accepted they need to do something in key areas that are completely undermining universal credit, but rather than accept a partial solution, offered to them on a plate by a group of Tory Back Benchers ahead of the debate last week, they deflected and deferred, caught up in indecision. They threw up red herrings on the telephone charges but refused to do anything substantive in the key policy areas. Their every move is a desperate calculation to fight the fires of that particular day. Strong leadership would have seen action last week; strong leadership would have accepted the parliamentary arithmetic and the mood of the House and of our constituents, and would have accepted the need to act.

Last week, we saw the desperate weakness of a Government unwilling to defend their flagship social security policy in the Lobbies, in what must be a near unprecedented scenario. They completely misread the House. They had no idea—or decided to ignore the fact—that the main Opposition parties were working together to force a vote on Wednesday night. They completely misread the strength of feeling in the House against universal credit in its current form and the way that you, Mr Speaker, would react to that defeat and the Government’s sleekit abstention. In doing so, they showed a disrespect for Parliament. They thought they could wriggle out of an embarrassing defeat by abstaining, but instead they had to contend with a defeat and an embarrassing rebuke from the Chair. Even now, after the Government have been dragged to the House, we still get nothing.

I feel for the Minister, who has been forced to substitute for the Secretary of State, because he has been asked today to defend the indefensible. I am hoping that the events of the last week will have offered some steel to those on the Government Back Benches who pushed hard for reform but accepted the three-line Whip to abstain. This is a Government on the run. Now is the time to force home the changes we have all been pushing for: fixing the six-week wait, fixing the advance payment being a loan, fixing the monthly payments. All of these would be a start, but the biggest win would be for the Government to acknowledge the glaringly obvious—the evidence in front of their eyes—and admit that universal credit as it stands is failing those it should be helping.

[Lucy Frazer]

My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) put a very good question to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) when he asked whether she anticipated that the overall pot would increase. She said she would come to that, but she did not—I twice tried to intervene because she did not come to it, but she did not take my interventions. What is the SNP’s position on that?

[Neil Gray]

That is a question for the Labour party, not for me.

The Government could and should accept the three proposals already outlined, which would garner the support of the House, but they should also be going further, and we all know it.

--- Later in debate ---

[Lucy Frazer (South East Cambridgeshire) (Con)]

The issue of how we encourage more people into work and ensure that those who are not in work have a decent standard of living is an important one and is worthy of debate. It is valuable to debate not only the principle behind universal credit and the Government’s formulation of the policy, but, given that a further roll-out is due shortly, whether there should be a further pause to resolve and discuss issues such as the timing of payments before the roll-out is extended.

Both of those are legitimate concerns, but the difficulty with the motion and the debate last week was that those two issues were conflated. On the face of it, the motion before the House purported to raise the second issue—namely, whether there should be a pause, and a pause alone. A pause is a temporary or brief interruption, after which service will resume. However, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), in speaking in support of the motion, went far beyond arguing for a pause and instead identified fundamental weaknesses, as she saw it, in universal credit. She identified no fewer than 11 individual amendments she wanted to see. She quoted the charity Gingerbread as saying that the errors in the administration and structure of the system itself needed addressing. She concluded by saying:

“We cannot allow the devastating impacts of universal credit roll-out to happen.”—[Official Report, 18 October 2017; Vol. 629, c. 865.]

Those points are important, because when the Opposition bring an Opposition day motion before the House on an important point that affects the lives of our constituents, it is important that we as MPs know what we are voting on. When the Labour party put that motion before the House, did it intend to request a short and temporary pause to universal credit, or was it asking significant questions about the operation of universal credit? My concern is that, in that motion, the Opposition were playing politics and would have sought to use how we voted on it. If the Government had voted in favour of the motion, it would be open to the Opposition to say the Government agreed with the wider issues in universal credit outlined by the hon. Member for Oldham East and Saddleworth. If the Government had voted against the motion, the Opposition would say the Government were not even willing to agree to a short-term, temporary measure to fix administrative issues with universal credit.

[Anna Soubry (Broxtowe) (Con)]

Does my hon. and learned Friend agree that the Opposition’s motion would have had more credibility if it had included the word “fix”? There was no mention of that. It was simply about a pause.

--- Later in debate ---

[Lucy Frazer]

I do agree, because it would have identified what they were addressing.

I also agree with my neighbour and hon. Friend the Member for South Cambridgeshire (Heidi Allen). She asked the hon. Member for Oldham East and Saddleworth whether she was just asking for a pause or would accept administrative changes, and the hon. Lady did not answer the question.

We know the Opposition are playing politics, because the hon. Member for Walsall South (Valerie Vaz) admitted that in the last Standing Order. No 24 debate. It was put to her by my hon. Friend the Member for Cheltenham (Alex Chalk) whether she thought it was potentially contemptuous to put forward a motion for political effect, and she answered:

“I am sorry but I thought we were in politics. We are politicians, so that is what we would expect to do in here.”—[Official Report, 10 October 2017; Vol. 629, c. 217.]

Mr Speaker, in this House I expect to debate motions that affect the lives of my constituents. I expect when I vote that it is clear what I have voted on, so that I can be held to account. That should be the nature of politics.