Universal Credit

Margaret Greenwood Excerpts

Wednesday 17th October 2018 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

I beg to move,

That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that the following papers be laid before Parliament: any briefing papers or analysis provided to the Secretary of State for Work and Pensions since 8 January 2018 on the impact of the roll-out of universal credit on recipients’ and household income and on benefits debts.

Universal credit, the Government’s flagship social security programme, has been beset by flaws in its design and delivery. It is causing immense hardship for many people wherever it is rolled out. It is hard to believe now, but universal credit was designed to lift people out of poverty and smooth the transition into work to ensure that it always pays. The reality is that universal credit is a vehicle for cuts: cuts in support for families with a disabled child for whom the basic rate of support is half what it is in tax credits; cuts in support for disabled people in work, such as the disabled person who wrote to us saying that they are more than £300 a month worse off since switching from claiming working tax credits; and cuts in support for lone parents bringing up children, who will get more than £20 a week less on average, with many losing far more.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is absolutely right to start with the issue on how universal credit is impacting on those with disabilities, the vulnerable and the unwell. I have a constituent who is caring for her disabled daughter and who has her own mental health problems. She was given the wrong advice by the Department for Work and Pensions and was left with £1,000 of rent arrears and universal credit not paid. What a shambles this policy is.

[Margaret Greenwood]

My hon. Friend makes the point so clearly: what a shambles and what a hardship for that family.

[Huw Merriman (Bexhill and Battle) (Con)]

rose—

[Margaret Greenwood]

Let me make some progress.

Overall, 3.2 million families with children could lose around £50 a week. People are worried, but there is no clarity from the Government. The Prime Minister told this House that no one would be worse off, yet The Times reported that the Secretary of State told Cabinet colleagues that households could lose up to £200 a month. Being forced to manage on a low income that is then cut still further means tough choices for the families affected. The DWP’s own survey of claimants published in June showed that nearly half of new universal credit claimants are falling behind with bills. Even six months later, four in 10 are still struggling to cope financially.

[Several hon. Members rose—]

--- Later in debate ---

[Margaret Greenwood]

I will make some progress and then I will take some interventions.

For more than a year now, Opposition Members have been calling on the Government to address the policy’s many flaws. I am talking about: the insistence on digital by default when many people trying to make a claim are either not able to use IT or do not have access to it; the monthly payment in arrears when so many people on low incomes are used to being paid fortnightly or even weekly; its inability to cope with fluctuating income that is part and parcel of life on low-paid, insecure work or self-employment; and the payment to a single person in a household that can make it more difficult for someone suffering domestic violence to leave an abusive relationship.

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

I thank my hon. Friend for giving way. Does she agree, first, that we should call a halt to this process; secondly, that many people have been driven into the hands of money lenders; thirdly, that many people have found themselves in rent arrears; and, fourthly, that usage of food banks has gone up as a result of this policy?

[Margaret Greenwood]

My hon. Friend makes a number of pertinent points. He is absolutely right to call on the Government to halt the roll-out of universal credit.

Other flaws include: the online journal in which people have to record the jobs that they have spent 35 hours a week applying for, but which work coaches often struggle to find the time to monitor; and the five-week wait for a payment at the start of a claim. According to the latest Government figures, 17% of claims were not paid in full and on time, and one person in 10 did not receive any payment at all. Groups such as carers or parents who need help with childcare are more likely than others to have to wait for their first payment. The latest figures show that only a third of people who are ill or disabled were paid on time.

[Huw Merriman]

Will the hon. Lady also spare some time to talk about the 700,000 people who will be better off by an average of £285 a month under universal credit, as well as those who find work through it?

[Margaret Greenwood]

The hon. Gentleman is getting ahead of himself, because there is no evidence that the Government can demonstrate whether universal credit gets people into work.

The Government’s answer to the delays was to provide advances, but they have to be paid back, as do debts for utility bills, council tax or rent arrears that people will probably have built up while waiting. The maximum percentage that can be taken out of universal credit for repayments is 40%. How is someone already trying to manage on such low income supposed to cope when such a large slice of their support is taken away at the source? And yet—in the face of all of the evidence—the Government have insisted on pressing ahead and accelerating the roll-out of universal credit since May this year, at the same time as carrying out a rapid programme of closing one in 10 jobcentres. The Government plan to increase the workload of work coaches fourfold and that of case managers sixfold as the roll-out continues. Staff are under constant pressure and are switched back and forth between processing claims and answering phone calls about problems with them.

From next year things are set to get a whole lot worse, as the Government prepare to embark on the next phase of universal credit—so-called managed migration—which will require almost 3 million people claiming the benefits that universal credit is replacing, such as tax credits and employment and support allowance, to make a new claim for universal credit instead. As hon. Members are aware, there is nothing managed about it.

[Nick Thomas-Symonds (Torfaen) (Lab)]

Does my hon. Friend agree that one of the real issues is that, under this migration system, people who are in work are becoming worse off? How on earth can a system encourage work when it makes people in work worse off?

[Margaret Greenwood]

My hon. Friend hits the nail on the head; he is absolutely right to raise that issue.

The Government plan to place the entire burden on the claimants themselves to successfully make a claim, rather than the DWP automatically transferring them across. Under the Government’s regulations—as currently drafted—a letter will drop through the letterbox on to the mat, telling people that their existing claim will end and that they will have a month to make a new claim for universal credit. Labour believes that it is without precedent for a UK Government to place all the responsibility of making a claim on the millions of individuals who the Government know to be in need, putting people at risk of falling out of the system altogether. The Government are doing this despite all the evidence of the serious difficulties that people are facing when making a claim.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

Does the hon. Lady agree that one of the strengths of the system is that people apply for only one benefit under universal credit, so it is much less complex? Indeed, many people will get a benefit to which they did not previously know they were entitled.

[Margaret Greenwood]

When the hon. Lady looks at the drop-out rate and the number of people who actually fail to complete a claim, I think that she will probably revise the comment that she just made.

Over half the households that will be required to move across will be working families—people in work whose income is too low support them—while over a third will have been claiming ESA, which means they have been assessed by the Government as too ill or disabled to work. Just receiving the letter will be very unsettling for someone with a mental health condition or a learning difficulty.

[Several hon. Members rose—]

[Margaret Greenwood]

I am taking no more interventions. [Interruption.] Well, I am short of time and many people have applied to speak.

Receiving the letter will also be unsettling when people have been on their existing benefit for a significant period. Of course, some people may miss the letter altogether. Also, they may well struggle to fill the form in on time and to get the necessary advice because, due to this Government’s cuts, the advice agencies are stretched to the limit. There is provision for the deadline to be extended but many people will not be aware of that. The Government have admitted that they do not know how many people overall will need additional support to make a new claim.

The Prime Minister assured us last week that people required to transfer to universal credit would not be worse off because they will receive transitional protection—an additional payment that tops up someone’s universal credit to the same level of the benefits that they were previously receiving. However, that only lasts for two years and could be lost when someone’s circumstances change, which can include such basic life events as moving in with a partner or separating from them.

If people lose transitional protection, they will find that the support they receive under universal credit is often significantly lower. For example, there is no enhanced disability premium, which is currently claimed by over 1.4 million people, and no severe disability premium, which is claimed by another 500,000 of the most severely disabled people who live alone. There is even a danger that many of the most vulnerable will fall out of the social security system altogether and be left without any income at all. According to the latest figures, almost 30% of universal credit claims started are never completed. Do the Government not care about what happens to these people?

The Government say that universal credit will lend to greater take-up, but not if people cannot make a claim in the first place. People with low literacy skills, a learning disability or no IT access are likely to find it difficult to cope with a complex online system. [Interruption.]

[Chris Philp (Croydon South) (Con)]

Will the hon. Lady give way to give her voice a rest?

[Margaret Greenwood]

This is a really serious matter and the hon. Gentleman would do well to focus on the issue at hand.

If we translate the percentage of claims that are closed before they are completed to the nearly 3 million people the Government want to transfer across, we can see that nearly 1 million people are at risk of falling out of the social security system altogether.

Food banks are reporting that they are running out of food. In August, Department for Work and Pensions officials carried out a study to identify areas where DWP operational practices contributed to a rise in demand for food bank services. I think that any Member of the House will know the answer to that.

[Ms Angela Eagle (Wallasey) (Lab)]

Will my hon. Friend give way?

[Margaret Greenwood]

I am going to make some progress.

When the National Audit Office raised the alarm with its damning report back in June, the Government misrepresented its findings and stubbornly claimed that it did not take account of changes that they had made, but they will not publish the figures that would enable the public and Parliament to hold them to account. This week in the Chamber, the Secretary of State met criticism of universal credit with accusations of scaremongering, so I will ask again: are Citizens Advice, the Child Poverty Action Group, the National Association of Welfare Rights Advisers, Mencap, Mind, Scope, Parkinson’s UK, the Residential Landlords Association, the National Housing Federation, the Resolution Foundation, the National Audit Office, the Archbishop of Canterbury and two former Prime Ministers scaremongering? The confusion of the last fortnight has caused families real concern about the transfer to universal credit and they deserve answers, so will the Government publish all reports and analysis that they have carried out into the effects of universal credit since the Secretary of State took office? People have a right to know.

The social security system should be there for any of us should we need it, yet the Government’s flagship programme has brought real hardship. How did it come to this—that people are facing hunger and destitution in the fifth largest economy in the world? It cannot be right. The Government must wake up and open their eyes to what is happening. That is why Labour Members are calling on the Government to stop the roll-out of universal credit.