The Secretary of State’s Handling of Universal Credit

Margaret Greenwood Excerpts

Wednesday 11th July 2018 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

I beg to move,

That this House censures the Secretary of State for Work and Pensions, the right hon. Member for Tatton, for her handling of the roll-out of universal credit and her response to the NAO report, Rolling Out Universal Credit; notes that the Department for Work and Pensions’ own survey of claimants published on 8 June 2018 showed that 40 per cent of claimants were experiencing financial hardship even nine months into a claim and that 20 per cent of claimants were unable to make a claim online; further censures the Secretary of State for Work and Pensions for not pausing the roll-out of universal credit in the light of this evidence; and calls on the Government to reduce the Secretary of State for Work and Pensions’ ministerial salary to zero for four weeks.

The findings of the report “Rolling out Universal Credit” by the National Audit Office, published on 15 June, were damning: universal credit is failing to achieve its aims and there is currently no evidence to suggest that it ever will; it may cost more than the benefits system that it replaces; the Department for Work and Pensions will never be able to measure whether it has achieved its stated goal of increasing employment; and it has not delivered value for money and it is uncertain that it ever will.

The NAO report raised real concerns about the impact on claimants, particularly the delays in payments, which are pushing people into debt, rent arrears and even forcing them to turn to food banks to survive. The Secretary of State for Work and Pensions took nearly a week to come to the House to respond to the report on what is the Government’s flagship social security programme and a major public project. When she did so on 21 June, on a Thursday when she knew that many Members would not be able to be here, she undermined the report rather than address the extremely serious issues that it raised.

Her approach was shockingly complacent. It was as though she was oblivious to the hardship that so many people are suffering. She referred to universal credit as an example of “leading-edge technology” and “agile working practices”. She said that it was

“a unique example of great British innovation”

She said:

“Countries such as New Zealand, Spain, France and Canada have met us”—

the Department for Work and Pensions—

“to see UC, to watch and learn what is happening for the next generation of benefit systems.”—[Official Report, 21 June 2018; Vol. 643, c. 491.]

I do hope that they will listen to the testimony given by our Members today.

[Simon Hoare (North Dorset) (Con)]

I have listened to what the hon. Lady has said. My right hon. Friend the Secretary of State had the courtesy to come to the House to apologise. Mr Speaker accepted that apology. Has the Labour Front-Bench team the good grace to accept it, too?

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[Margaret Greenwood]

I thank the hon. Gentleman for his remarks. He will be aware, and I will cover this further on in my speech, that she apologised for one of the three aspects for which an apology was necessary.

[David Hanson (Delyn) (Lab)]

Last week, on 5 July, following my question at Work and Pensions questions on Monday, the Secretary of State said that she had made an error and wanted to report it to the House—as reported in column 500 of Hansard. Why does my hon. Friend think that it took 48 hours for her to come to the House when a written apology, or an apology on the Monday or Tuesday, could have done the job? Was it because the National Audit Office published its report at 11 o’clock on Wednesday?

[Margaret Greenwood]

My right hon. Friend raises such an important point. I was as shocked as he was to hear the Secretary of State say that it was when she had left the Chamber that she realised her mistake. She should have replied that afternoon. He is quite right on that point.

The Secretary of State adopted the same approach at Work and Pensions questions, as has been noted, leading the head of the National Audit Office, Sir Amyas Morse, to take the extraordinary step of writing an open letter to her, taking issue with a number of claims that she had made in response to the report. The three key claims that he took issue with were, first, that the NAO report said that the roll-out of universal credit should be speeded up; secondly, that the report

“didn’t take account of changes made by the government in the Budget”;

and, thirdly, that universal credit is working.

Let us just think about the significance of this. The National Audit Office is an independent body that scrutinises public spending before Parliament. It is responsible for auditing central Government Departments. Its reports matter. I shall take each claim in turn.

On 21 June, the Secretary of State stated on several occasions that the report had said that the Government should speed up the roll-out of universal credit. She repeated that claim at Work and Pensions oral questions on 2 July, when questioned by my right hon. Friend the Member for Delyn (David Hanson) and me. Of course, the NAO report does not say anywhere that the roll-out should be speeded up. In fact, it says very clearly that the Government should

“ensure the programme does not expand before business-as-usual operations can cope with higher claimant volumes.”

[Ruth George (High Peak) (Lab)]

This is an incredibly important point. Does my hon. Friend agree that, as we are seeing 100,000 households rolling on to universal credit this year and 200,000 next year, with 40% in hardship, we are talking about millions of real people, real families, whose lives are being affected by the speed of this roll-out?

[Margaret Greenwood]

My hon. Friend is absolutely right. This is an issue of the utmost importance and the Government must take note.

[Bim Afolami (Hitchin and Harpenden) (Con)]

Does the hon. Lady accept that the NAO report does not take into account what my right hon. Friend the Secretary of State and the Department have done recently in line with their “listen and learn” approach with the roll-out of universal credit?

[Margaret Greenwood]

I will come on to that point in my remarks.

[Sir Desmond Swayne (New Forest West) (Con)]

The report, rather perversely in my view, complains that the roll-out has been too slow. Is it unreasonable for us to assume that it would like us to hurry up?

[Margaret Greenwood]

The right hon. Gentleman should go back and re-read the report.

On 4 July, the Secretary of State finally admitted that she had “inadvertently” misled Parliament in claiming that the roll-out should be speeded up. This matters not just because she admitted that she had misled Parliament, but, as I will explain later, because the Government have sharply accelerated the roll-out of universal credit since May and because, from next year it, they will start a managed migration of 3.9 million people on legacy benefits across to universal credit.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my hon. Friend agree that the evidence on the use of food banks needs to be urgently looked at before the roll-out can continue?

[Margaret Greenwood]

My hon. Friend makes an absolutely pertinent remark. The prevalence of food banks in our society is a source of shame on this Government.

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

We have to put this whole debate on universal credit in context. In at least two general elections, the Government said in their manifestos that they would cut £12 billion off the national health service. What we have is a benefit system that is tailor-made for cuts and not for the benefit of the people who receive it.

[Margaret Greenwood]

My hon. Friend makes an interesting point about cuts.

The Secretary of State’s second claim was that the report did not take into account the impact of recent changes made by the Government. This is curious.

[Stephen Timms (East Ham) (Lab)]

I agree with everything that my hon. Friend is saying. She has already quoted the National Audit Office report. From that quotation, does it not sound to her as though the NAO’s view is that this project should be paused and fixed?

[Margaret Greenwood]

My right hon. Friend is absolutely right. I am going to make some progress now because there have been so many interventions, although I am pleased that so many people are here today.

The head of the NAO said clearly in his letter of 4 July:

“Our report was fully agreed with senior officials in your Department. It is based on the most accurate and up-to-date information from your department. Your department confirmed this to me in writing on…6 June and we then reached final agreement on the report on…8 June.”

The Secretary of State refused to back down and said again in a letter to the Chair of the Public Accounts Committee—my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier)—dated only yesterday that, although she had full confidence in the NAO and its head,

“that does not mean the Department will always agree with all of the judgements reached by the NAO.”

Will she tell us now, once and for all, whether or not her Department agreed the report with the NAO in writing on 8 June?

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

Will the hon. Lady give way?

[Margaret Greenwood]

I am not going to give way; I want to make some progress. Thirdly, the Secretary of State claimed—

[Mr Duncan Smith]

Will the hon. Lady give way?

[Margaret Greenwood]

I am not going to give way and I would point out that the right hon. Gentleman has called the report “shoddy”, so excuse me if I continue. Thirdly, the Secretary of State claimed that universal—[Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. If the hon. Lady does not want to give way, it is completely up to her.

[Margaret Greenwood]

Thirdly, the Secretary of State claimed that universal credit is working.

[Simon Hoare]

On a point of order, Madam Deputy Speaker. Is it not a custom in this place, out of common courtesy, that when one hon. Member references another—either by name or by constituency—and that Member then seeks to intervene, the request is usually acceded to?

[Madam Deputy Speaker]

It is absolutely up to the hon. Lady whether to take any interventions. Hon. Members really should not be interrupting speeches with points of order over and again. It is becoming a bit of a habit, and not a very healthy one.

[Margaret Greenwood]

Thank you, Madam Deputy Speaker.

Thirdly, the Secretary of State claimed that universal credit is working. The head of the NAO said in his letter that this is unproven. The DWP’s own survey of claimants under the full service published in June shows that just under half of all claimants were unable to register their claim online unassisted, a quarter were not able to submit their claim online at all and 40% were falling behind with bills or experiencing real financial difficulties, sometimes even nine months into their claim. A recent freedom of information request revealed that a fifth of universal credit claims are failing at an early stage because claimants are not able to navigate the online system. These people are likely to be among the most vulnerable in our society, and this Government are failing them.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

My hon. Friend is making an excellent speech. Precisely on that point—which I have raised repeatedly with Ministers, but to no avail—does she accept that the Government’s position of not allowing advice agencies to help people with their claims after they changed the implied consent rules is shown to be completely bankrupt when such a high proportion of people cannot get their claims sorted out online?

[Margaret Greenwood]

My hon. Friend makes an important point.

[Mr Duncan Smith]

Will the hon. Lady give way?

[Margaret Greenwood]

I have three minutes of my speech left, so I will take no more interventions.

The Secretary of State claimed that the NAO report did not take account of the impact of recent Government changes. However, there have been no recent changes to support people in making and managing their claim online, and we know that the Government’s universal support programme receives only limited funding. The payment delays that people are experiencing are shocking.

The DWP this week published figures on the length of payment delays for new claims due in February. The Library estimates that nearly 13,000 people were not paid in full on time and 7,500 people did not receive any payment on time at all. In December, two thirds of disabled people with limited capability for work were not paid in full on time, and last year 113,000 people—a quarter of new claims—were not paid in full on time. This is outrageous. Why were they not paid in full on time and what is the Secretary of State going to do about it? These are people on low incomes who often do not have any savings to rely on in these circumstances. The delays are causing real hardship for people, leading them to build up debt and rent arrears.

The Residential Landlords Association has made it clear that private landlords are increasingly reluctant to rent to people claiming universal credit. The National Housing Federation this week reported that nearly three quarters of housing association tenants in England claiming universal credit are in debt, compared with less than a third of all other tenants. The Government claim that no one should have to suffer hardship because advances are available, although, as the NAO said, the Government

“has not measured the impact on claimants or assessed how much hardship Universal Credit claimants suffer.”

Should it not be the Government’s duty to understand the effectiveness of their own social security system?

Advances have to be paid back, often on top of debts for utility bills and council tax arrears built up while waiting for the initial payment. One of the Secretary of State’s senior officials told the Public Accounts Committee on Monday this week that the average monthly repayment of £35 a week is “not eye-wateringly large”. Maybe not to him, but what about someone on very low income struggling to cope with basic household bills? I have received so much testimony from people up and down the country on this issue. I have heard stories of people being sanctioned because they have accompanied their mother to a cancer treatment session and stories of people with special needs not receiving the support that they should.

I put it to the Government that their policy of managed migration of just under 4 million people on legacy benefits across to universal credit that is due next year risks huge problems for the people who transfer. Although they will receive transitional protection, it will only last for two years, and the DWP’s current plan is that those people will have to make a new universal credit claim. This could bring chaos.

The NAO has made it absolutely clear that the Government should not expand universal credit until they are clear that the system could cope with higher claimant volumes. If the Government fail to get this right, there will be many people whose lives are made a misery by a benefit that is meant to support them. That is why the Secretary of State’s inadvertently misleading claim that the NAO report says that the roll-out should be speeded up matters so much. Will she give an assurance that the Government will not start managed migration until it is clear that universal credit and her Department can cope with it?

Universal credit was created to simplify the social security system. Clearly, its complexity is so often defeating both claimants and the staff administering it. It was meant to lift people out of poverty; instead it is pushing many into debt. The Government claim that the Opposition are scaremongering whenever we raise issues about the suffering of our constituents. Well, the Residential Landlords Association, the National Housing Federation, Citizens Advice, the Child Poverty Action Group, the Joseph Rowntree Foundation, the Resolution Foundation and the Institute for Fiscal Studies have all raised major concerns about universal credit.

The Secretary of State repeatedly claims her Department is testing and learning, but this testing and learning is using people like guinea pigs. This is unacceptable. Where is the dignity? Her Government are causing hardship with scant regard for the devastation to families up and down the country. She must now take responsibility for the real suffering being caused by the roll-out of this flawed programme. She must call a halt to universal credit and put forward a credible plan to fix its many failings before many more people suffer.

[Madam Deputy Speaker (Dame Rosie Winterton)]

The Question is as on the Order Paper. I call the Secretary of State.

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[Margaret Greenwood]

Will the Secretary of State apologise for the two points she has failed yet to apologise for to the head of the National Audit Office?

[Ms McVey]

The answer is no, they will not be apologising.

As it is about apologies today—and, as I said, I made my apology straight away—let us go back to another apology. I was hoping that the shadow Chancellor would be here today, because I was waiting for years for an apology for the lynching comment against me. Of course, we never got that apology. As the Opposition spokesperson knows all about that campaign in Wirral West, perhaps she would like to apologise on behalf of her party.

[Margaret Greenwood]

The point that the Secretary of State makes had nothing to do with my campaign in Wirral West in 2015.

[Ms McVey]

So that is twice we have not had an apology from the Opposition.

I now move back to tax credits. Tax credits were introduced in 2003 with an error rate, I am told, of 10% to 14%. Some people call this Brown’s burden—or maybe it is just Labour’s burden. I offer this opportunity now: does anybody on the Opposition Front Bench want to apologise for those tax credits and the mistakes therein? Whether it is on scaremongering or on one of the reasons we brought in universal credit—the failings of the tax credits system—we see that nobody is prepared to apologise.

It is not that we cannot all make mistakes. We have all made mistakes on various scales. But for the only mistake I ever made in this House, I just apologised. Most people think you do that in everyday life, but in this House the Opposition do not apologise, whereas I am prepared to do so.