Universal Credit

Margaret Greenwood Excerpts

Monday 5th November 2018 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

I thank the Secretary of State for advance sight of her statement. I would like to pay tribute to all the individuals, charities and Members of the House who have been holding the Government to account over their chaotic and damaging universal credit programme, which is pushing families into poverty.

In June, the National Audit Office published a damning report on universal credit. We know that the roll-out of the benefit is leading to people building up debt and rent arrears or being forced to turn to food banks for help. The Budget last week did little to address the very long wait for payments, which is causing significant hardship. Despite that, the Government are now planning to start the next phase of the introduction of universal credit, which they call managed migration, involving the transfer of 2.87 million people on to it.

Under the draft regulations, existing claimants will be sent a letter saying that their benefits will stop and they will need to make a new universal credit claim by a specific deadline. It is wholly unacceptable that the Government are shifting responsibility for ensuring that people get the help they need away from the Government and on to the shoulders of nearly 3 million claimants. It is no wonder that 80 organisations representing disabled people are calling for the Government to change tack. Learning disability charity Mencap has said that the proposals leave disabled people

“vulnerable to having their benefits stopped before they have made a successful claim”.

More than 400 organisations have responded to the Social Security Advisory Committee’s consultation on the managed migration regulations—a record number for the committee, which demonstrates the strength of concern about this issue.

Parliament is being asked to approve regulations that it may have very little chance at all to scrutinise and debate, even though the details of how the process will take place are not yet settled. When asked by the Chair of the Work and Pensions Committee on 18 October whether the regulations would be debated, the Minister for Employment answered:

“We need to have a debate in the House.”

It was clear from the context that the Chair meant a debate in the main Chamber. However, the shadow Leader of the House raised the issue at business questions on 11, 18 and 25 October without receiving a clear assurance that that would be the case. That is all the more important since Government Members make up a majority of the MPs in Committees, even though they do not have an overall majority in Parliament.

Let us step back and get a broad view of the Government’s supposed flagship social security programme. Universal credit was supposed to lift 350,000 children out of poverty. Instead, according to the Joseph Rowntree Foundation, an extra 1.2 million children may be growing up in poverty by the end of this Parliament. Universal credit was supposed to deliver work incentives and help more people into employment, yet the NAO says that the Department for Work and Pensions will never know whether universal credit leads to more people in work. Universal credit was supposed to simplify the social security system, but instead, around three in 10 claims of universal credit are closed and not paid, within a system that is complex and that people find difficult to navigate. This statement does nothing to address that.

The Government claim that 1 million disabled households will receive an extra £100 a month as a result of universal credit. What the Secretary of State has failed to tell the House is that the same report by the Office for Budget Responsibility reveals that around 1 million sick and disabled households will lose an average of £2,608 a year, or £217 a month.

Universal credit is failing. The Opposition have consistently called on the Government to stop the roll-out, but the Government are pressing ahead, despite the terrible hardship it is causing. We have a right to ask questions on behalf of our constituents, including whether the universal credit managed migration regulations will be debated in full on the Floor of the House so that all MPs get a chance to scrutinise and debate this critical draft legislation.

The Secretary of State says that the Government have accepted all but one of the Social Security Advisory Committee’s recommendations. That is highly questionable. For example, what new action will the Government take to support people who struggle to make and manage a claim online? Will the Department publish the more than 400 responses to the Social Security Advisory Committee’s consultation, to ensure maximum transparency? The Secretary of State must assure the House that there are sufficient safeguards in place to ensure that no existing legacy benefit claimants end up falling into destitution and that none falls out of the social security system altogether.

Given the potential impact of the draft regulations on claimants’ incomes, the large number of people affected and the strength of opposition to the proposals in their current form, it is a matter of real concern that they will receive such little scrutiny by Members. Members are extremely concerned about the impact that universal credit is having on people living in their constituencies. They must be given the opportunity to debate and vote on these regulations on the Floor of the House.

[Ms McVey]

While the Opposition cannot bring themselves to commend the extra £4.5 billion going into universal credit, let me read out what some independent charities have been saying. The Resolution Foundation has hailed this a “very welcome” £1.7 billion commitment. The Joseph Rowntree Foundation has said that this extra investment is

“a tool for tackling poverty”.

The Trussell Trust has talked about

“significant improvements that will make a real difference to many people supported by universal credit”.

The Child Poverty Action Group called this

“unequivocally good news for families receiving universal credit”.

Other charities have been saying that the Department is now listening to what claimants, charities and MPs are saying. The Trussell Trust has said that. Gingerbread has said that. Mind has said that. Mencap has said that.

I would also point out that an extra 1 million disabled people will be getting an extra £100 a month, and that 700,000 people who did not get all they should under the legacy benefits will get nearly an extra £300 a month. There are now 3.4 million more people in work. That is what we do: we help people into work. Youth unemployment has gone down by 50% since 2010—that gives young people a future, it gives them hope and it gives them a job—and that is happening under this Government.

I came into politics for social mobility. Social mobility is about moving forward and getting a job. There is no social mobility on benefits—there is no mobility on benefits. That is what this party believes in. It is the way to get out of poverty. That is why we welcome the extra £4.5 billion. The Opposition have asked for a debate on the Floor of the House, and, of course, there will be a debate on the Floor of the House. We believe in transparency. We are open and straight talking. We say it as it is.

We will be co-designing what happens with claimants. In the words of the publication that the OBR has put out on the Budget, by 2023-24 we will be spending an extra £2 billion on universal credit than on the system it replaces. I want to say a final word on debt under Labour: between 1997 and 2010, benefit claimants’ debt to local authorities increased by £1.8 billion through overpayments and errors in the legacy system, and £5.86 billion of debt was accrued on tax credits. That is a shameful record for the Opposition of putting claimants into debt on benefits and tax credits.

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.

Universal Credit

Margaret Greenwood Excerpts

Tuesday 16th October 2018 Commons Chamber

[Alok Sharma]

My hon. Friend is absolutely right; under the legacy benefits system, some people did face effective tax rates of 90% and that system also disincentivised people from work. As I have said, those on legacy benefits that we manage migrate across will of course receive transitional protection.

[Margaret Greenwood (Wirral West) (Lab)]

Universal credit is causing severe hardship for many people claiming it, and over the past two weeks conflicting statements from the Government have caused real confusion over the impact it will have on people who are required to move across to claim it in the next phase. First, we were told that austerity is over and then that families on low income are in danger of losing up to £200 a month as a result of transferring to UC. Next, the Prime Minister said that nobody would be worse off, but the Secretary of State contradicted her the following day by confirming that in fact some families would be worse off. So will the Government now publish their impact assessments of that next phase? How many households currently claiming legacy benefits will be worse off between now and 2023 as a result of making a claim for UC?

Yesterday, the Secretary of State met criticism of UC with accusations of scaremongering. So can the Minister tell us: are Citizens Advice, the Child Poverty Action Group, the National Association of Welfare Rights Advisers, the Residential Landlords Association, the National Housing Federation, the Resolution Foundation, the National Audit Office, two former Prime Ministers and more than 80 organisations representing disabled people scaremongering? From these Benches, we again call on the Government to stop the roll-out of UC now.

[Alok Sharma]

It is interesting that the hon. Lady talks about confusion. Let me be absolutely clear: there is no confusion on the Government Benches; the confusion is on the Opposition Benches. The shadow Chancellor talks about abolishing universal credit and others talk about reforming it. There is no clarity at all from the Opposition. They oppose everything but they have the solution to nothing.

When it comes to hardship, as I just said we introduced an extra £1.5 billion, but the hon. Lady did not vote for or support that. When it comes to protecting people, I have already made it clear that we will have transitional protection and that there will be protection for the half a million people on severe disability premium. I do not know what the hon. Lady wants, but if she wants to go back to the legacy benefit system, she should know that 700,000 people in this country are not getting the benefits that they require. That is £2.4 billion of underpayment and that will change under universal credit. Finally, the hon. Lady talks about Citizens Advice; I hope that she will welcome the partnership we recently announced with Citizens Advice to help the very vulnerable.

Oral Answers to Questions

Margaret Greenwood Excerpts

Monday 15th October 2018 Commons Chamber

[Ms McVey]

I thank my right hon. Friend for that. Of course I want to thank not just Haywards Heath jobcentre but all the jobcentres across the country, who are saying that this is now enabling them, for the very first time, to help people into work. We know that that is the case, as we have record numbers of people getting into work— 3.4 million more than in 2010.

[Margaret Greenwood (Wirral West) (Lab)]

At the Conservative party conference, the Prime Minister announced that austerity is over. Only a few days later, it was reported in The Times that families who are required to transfer to universal credit could lose up to £2,400 a year. The Prime Minister then denied it, but the following day the Secretary of State admitted that in fact some people would lose out. The confusion of the past week will have caused real concerns for families who will be affected. They have a right to know. If austerity is really over, will the Government ensure that nobody loses out?

[Ms McVey]

As I have said both on TV and in the House, we took difficult decisions, as did the country, in 2015-16 because we had a benefits system that had grown by over 60% under Labour. Now it is on a sustainable footing and is fair to the taxpayer and fair to the claimant. One million more disabled people will be getting, on average, £110 more a month, and 700,000 who were not getting their full amount of benefit now will. There will be transitional protection. We are listening, we are learning, and we will adapt and change as need be.

[Margaret Greenwood]

Almost 30% of universal credit claims started are not completed, according to the latest figures, and the Government do not appear to have any idea about or interest in what happens to those people. In the next phase of the roll-out, the Government are placing all the responsibility for making a universal credit claim on to the 2.87 million people required to move across, and they admit that they do not know how many will need additional support. There is a real danger that hundreds of thousands of people could fall out of the social security system altogether and be pushed into poverty—even left at risk of destitution. So will the Government step back from the brink and stop the roll-out of universal credit?

[Ms McVey]

I have to say that that is some of the worst scaremongering I have ever heard. At the last Budget and this year, we put in another £1.5 billion when we knew that we had to provide more support. I announced in June that we would be helping another half a million disabled people on the severe disability premium. I have agreed to do more for kinship carers and the most vulnerable 18 to 21-year-olds. We are also agreeing to work with Citizens Advice—an independent and trusted organisation—to help people to get on to the benefit. When we hear what we need to do, we will do it.

Widowed Parent’s Allowance

Margaret Greenwood Excerpts

Wednesday 5th September 2018 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

Last week the Supreme Court ruled that the denial of widowed parent’s allowance to surviving unmarried partners with children is incompatible with the law, in upholding the appeal of Siobhan McLaughlin, who lived with her partner, John Adams, and their four children for 23 years until John died in January 2014. I thank the Minister for advance sight of his statement, and I pay tribute to Siobhan McLaughlin and her family for their courage in pursuing this important case. Unmarried bereaved parents should not be subject to discrimination because of their marital status; to put it simply, their children’s needs are the same. The Supreme Court said:

“The financial loss caused to families with children by the death of a parent...is the same whether or not the parents are married or in a civil partnership.”

The financial support provided by the state can be vital to a family who are already grieving for their loss and who may also be facing financial hardship because of diminished income.

The judgment relates to legislation in Northern Ireland, but unmarried couples are ineligible for widowed parent’s allowance in the rest of the UK as well, so the principle established by the Supreme Court has wider implications. Bereaved parents are already contacting support organisations, such as the Childhood Bereavement Network, to ask for guidance in the light of the judgment.

The Minister said that the Government are considering the Court’s judgment and how the Department should proceed, but this judgment did not come out of the blue. In March 2016, the Work and Pensions Committee warned the Government that they could be forced to change their policy as a result of this specific case. The Select Committee’s “Support for the bereaved” report, published in March 2016, clearly expressed the view that excluding unmarried couples was wrong. It said:

“Penalising children on the grounds of the marital status of their parents is unjust.”

So what assessment has the Department made of the cost of bringing the legislation on eligibility for widowed parent’s allowance into line with the Supreme Court judgment in the whole of the UK? What assessment has the Department made of the number of families who made a claim for widowed parent’s allowance that was denied because the parents were not married?

The Minister said that restricting eligibility to those in a legal union has been a consistent feature of bereavement support in order to protect and clarify the entitlement. However, although unmarried couples were treated differently when it came to making a claim for widowed parent’s allowance, that does not apply when it comes to the Department ending their claim, because if the surviving partner cohabits with a new partner their claim is ended, just as it would be if they remarried or entered a civil partnership. The Minister said that it was for Parliament to change the law, and he referred to the vote in 2014. That led to the Government introducing the bereavement support payment in April 2017 to replace widowed parent’s allowance and two other bereavement benefits. Yet they decided to continue to exclude unmarried couples, even though both Members in this place and voluntary organisations working in the field called for eligibility to be extended to them. The Department for Work and Pensions itself estimated that 75% of bereaved families with children would receive less support under the new system.

The Government claimed that they were motivated not by the desire to save money but by the need to “modernise” financial support for bereaved families in order to better reflect society. According to the Office for National Statistics, cohabiting couples are the second largest family type and the fastest growing. The number of cohabiting couples has more than doubled, from 1.5 million in 1996 to 3.3 million in 2017, and the percentage of dependent children living in cohabiting couple families increased from 7% in 1996 to 15% by 2017. When the Government introduced the bereavement support payment to “modernise” support, why did they not extend eligibility to unmarried couples? What message does that send to those children about how they are valued by this Government?

Will the Government now act to bring bereavement support payment into line with the principle established by the Supreme Court that bereaved children should not be disadvantaged because of their parents’ marital status? The purpose of financial support by the state for bereaved families is to try to ensure that, as far as possible, families struggling with grief at the loss of a parent or partner should not have to face the additional worry of how they will manage financially. That should surely apply to families regardless of whether the parents were married or not, as the Supreme Court said last week.

[Justin Tomlinson]

I thank the hon. Lady for her response. As I said in my statement, the Court cannot change primary legislation, and many of the points she raises are the very ones we will be considering, including the potential impacts of any changes that could happen. I will happily update the House on those once we have had the chance to consider them fully.

Many of the other points raised were at the heart of the principles of why we brought forward the new bereavement payments process: it is far simpler and it is a quicker process. We did consider the point about cohabitation, but this is not straightforward, as was extensively debated during the discussions around the time of the Pensions Act 2014, particularly as the regulations were brought forward. That makes this a complex process, because it can be open to interpretation, leading to delays and additional burdens for claimants, particularly at a time of distress. Any extension could trigger multiple claims; a bereaved person may have been legally married to one person but living with a new partner, who would therefore become eligible.

The hon. Lady talked about the new proposals for families with children, but I will challenge her back on that, because the new system is easier and quicker, and the payment is in addition to other household income. It is not taxed or means-tested, and it is not applied to the benefit cap. These are all keys areas that help those with the lowest income, as the principle was based on fairness. We also widened support so that anyone of working age would qualify and younger spouses and civil partners without children would get support. Specifically for those bereaved with children, an additional £1,500 was paid as the first lump sum. In some cases, those families could be eligible for additional benefits, whether through universal credit, child benefit, tax credits or the funeral expenses payment.

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?

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Universal Credit

Margaret Greenwood Excerpts

Thursday 5th July 2018 Commons Chamber

[Ms McVey]

I thank my right hon. Friend for the way he said that. That was my interpretation of what I read throughout the report. I therefore apologised when I checked on the words I had used—my interpretation, not the exact words in the report. I would say, however, on the subject of apologies, that I am more than happy to say, “Can I check on those words? Did I get them right? Did I get them wrong?” I then followed through: “What was the right process?” How did I do it? Nobody asked or told me to come to the House. I actually checked the words and came to the House.

Other people, it is true, have questioned and queried—even the right hon. Member for Birkenhead (Frank Field). Sometimes I think we are blessed in this House that the Opposition never get anything wrong, and other MPs do not get anything wrong. Whereas I am more than happy to come and apologise if I do, it seems that sometimes other people are not so happy to come forward and apologise. Perhaps what I did that was surprising to the House was to come of my volition and apologise for my words that were wrong.

[Margaret Greenwood (Wirral West) (Lab)]

The Secretary of State should be ashamed that she has been forced to come to the House again. Yesterday the Comptroller and Auditor General took the extraordinary step of writing an open letter to her pointing out that she had misrepresented the National Audit Office report on numerous occasions. He did so after she had failed to meet him, and she did not have the courtesy to do so before this point.

The NAO report is damning of the Government’s flagship social security policy, but, instead of responding to its findings, the Secretary of State misled the House over them. The report said that universal credit is not meeting the aims set for it, and that currently there is no evidence that it ever will. Why and how did the Secretary of State come to say falsely—on two separate occasions in Parliament—that the report had said that the roll-out of universal credit should be speeded up, that the report was out of date as it did not take account of changes made by the Government in the Budget, and that universal credit was working? How can these statements be inadvertent slips of the tongue?

In response to a point of order, the Secretary of State said that she had

“meant to say that the NAO had said that there was no practical alternative to continuing with universal credit.”—[Official Report, 4 July 2018; Vol. 644, c. 321.]

That is quite different from saying that it should be speeded up. In fact, the report states clearly that the Government should

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

Has the Secretary of State ever read the NAO report? If she has, how can she have drawn the conclusions that she has?

The Secretary of State has failed to apologise in relation to the other two key points made by the Comptroller and Auditor General in his letter. Will she now do so? If she misread the report so badly, this brings into question her competence and her judgment. If she read the report and chose to misrepresent its findings, she has clearly broken the ministerial code. Either way, she should resign.

Oral Answers to Questions

Margaret Greenwood Excerpts

Monday 2nd July 2018 Commons Chamber

[Ms McVey]

My right hon. Friend, who does so much for people in her constituency, and particularly those with autism, raises a very good point. We will look into exactly what we can do to do that for the citizens advice bureaux, as we have a very good working relationship with them.

[Margaret Greenwood (Wirral West) (Lab)]

The National Audit Office’s report on universal credit shows that people such as carers, families needing support with childcare and disabled people are more likely to have to wait for an initial payment. The report shows that, in December 2017, only a third of disabled people were receiving their initial payments in full and on time. As the Secretary of State claims that the NAO report is out of date, can she tell us what the figure is now?

[Ms McVey]

As we said quite clearly, the NAO did not take into consideration all the changes that we had made and their impact. What we can say is that we know that 80% of people will get their payment on time and in full, but what the NAO report has not taken into consideration is that 90% will get some payment within the first month and it is invariably down to non-verification and not fulfilling their claimant commitment.

--- Later in debate ---

[Ms McVey]

Not only is it seeing more people into work sooner, but it shows they are staying in work longer and looking to do more hours. It also shows that people who are in work are earning £600 more a year on average. My hon. Friend has raised a good question.

[Margaret Greenwood (Wirral West) (Lab)]

The Department for Work and Pensions’ own survey of claimants under universal credit full service found that over 40% were unable to register a claim online unassisted. These people are the most likely to be vulnerable in our society. Universal support is meant to address this, but the NAO report reveals that providers told the NAO that universal support does not meet the needs of claimants and leaves providers insufficient time to assist them. What are the Government going to do to ensure that these people receive the support they need?

[Ms McVey]

As the hon. Lady will know, we have provided £200 million-worth of support for local authorities to help people who will need the help not just for budgeting but for going online through IT; we have a free phone line and we meet with people face to face to do just that.

--- Later in debate ---

[Ms McVey]

My hon. Friend is right—that is exactly the number. Actually, Patrick from Newport has said that it helped him with fares to get to a job and with the cost of clothing. He said:

“Thanks for all your help. It was really easy dealing with everyone who helped me back into work quickly and helping me buy what I need and travel back and forth.”

That was an example from Wales.

[Margaret Greenwood (Wirral West) (Lab)]

The National Audit Office report recommended that the Government should

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

yet in her oral statement on 21 June, the Secretary of State said that the NAO report stated that the Government should

“continue with the roll-out and do it faster.”—[Official Report, 21 June 2018; Vol. 643, c. 495.]

Will the Secretary of State tell us where in the report it says that the roll-out should be speeded up?

[Ms McVey]

Yes, in the report it says just that. It says that it needs to continue to go forward and it needs to continue at a faster rate.

Universal Credit and Welfare Changes

Margaret Greenwood Excerpts

Thursday 21st June 2018 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

I thank the Secretary of State for advance sight of the statement, but the Opposition believe that she should have come to the House on Monday to make a statement about both the damning National Audit Office report that was published last Friday and the Government’s decision, announced last Thursday, to put back the target for the completion of universal credit by another year—the sixth such delay. Rather than taking pride in not continuing with the appeal on PIP regulations, the Secretary of State should reflect on her Department being forced three times in the past year by legal challenges to review payments to disabled people.

Universal credit is the Government’s flagship social security programme, and the NAO report on it that was published last Friday is damning indeed. It concludes that universal credit is a major failure of public policy: it is failing to achieve its aims and, as it stands, there is no evidence that it ever will. The report suggests that universal credit may cost more to administer than the benefits system that it replaces, and concludes that it has not delivered value for money, that it is uncertain whether it ever will, and that we will never be able to measure whether it has achieved its stated goal.

The Trussell Trust recently reported that food bank referrals have increased by 52% in areas where the full service of universal credit has been introduced in the past year, compared with 13% across the UK as a whole. In Hastings, food bank referrals went up by 80% following the roll-out of the full service. The Department for Work and Pensions does not measure whether claimants are experiencing hardship; is it not time that the Secretary of State woke up to the realities of poverty in the UK and instructed her Department to do so? Some 60% of claimants have asked for advanced payments, showing just how high the level of need out there is.

The Secretary of State says that universal credit is based on leading-edge technology and agile working practices. However, the National Audit Office report says that 38% of claimants were unable to verify their identity online and had to go to a jobcentre to do so. It makes no sense to accelerate the roll-out of universal credit at the same time as rapidly closing jobcentres. The NAO report reveals that a significant number of people struggle to make and manage their claim online. The Department for Work and Pensions’ own survey found that nearly half of claimants are unable to make a claim online unassisted, and that a fifth of claims are failing at an early stage because claimants are not able to navigate the online system.

The Government claim that the introduction of universal credit will result in 200,000 more people finding long-term work than under legacy benefits. They repeatedly cite evidence from 2014-15, but that was before the cuts to work allowances were introduced and covers only single unemployed people without children. If one looks at the range of claimants in areas where universal credit has been rolled out, there is no evidence that it is helping more people find long-term work. Delays in payments are pushing people into debt and rent arrears on such a scale that private and even social landlords are becoming increasingly reluctant to rent to universal credit claimants.

The NAO report also points out that 20% of claimants are not being paid in full and on time, and more than one in 10 are not receiving any payment on time. The people who are most at need from the social security system are the ones most likely to have to wait for payments. A quarter of carers, over 30% of families who need support with childcare and, most shockingly of all, two thirds of disabled people are not being paid in full and on time. The report points out that the Department does not expect the time limits of the payments to improve over the course of this year, and that it believes that it is unreasonable for all claimants to expect that they will be paid on time because of the need to verify each claim. Does the Secretary of State find the expectations of her own Department acceptable? She has made some claims that things have improved greatly since the closure of the report, so will she substantiate that by putting that information in the Library?

The impact of universal credit on some of our most vulnerable people is clear. Universal support is supposed to help people, but funding is severely limited and provision is patchy. What assessment has the Secretary of State made of it? Is she satisfied that her Department is doing enough to support people who are struggling?

Universal credit was supposed to offer personalised support to claimants, but stressed and overloaded staff are often failing to identify vulnerable claimants. The DWP is aiming to increase the workloads of work coaches fourfold and of case managers nearly sixfold as the Government try to cut the cost of universal credit still further.

The NAO is very clear that the DWP should not expand universal credit until it is able to cope with business as usual. The Government must now listen to the NAO, stop the roll-out of universal credit, and fix the flaws before any more people are pushed into poverty by a benefit that is meant to protect them from it. Universal credit is having a devastating impact on many people and will reach 8.5 million by 2024-25. The Secretary of State must now wake up to the misery being caused by her policy.

[Ms McVey]

First off, this was the earliest time that I could come to the House to make an oral statement. I sought to make a statement as soon as possible, which is why I am here today. Obviously, everyone will know what has been happening this week in the House.

On the legal changes that I have made, let me say that I took them from day one. I took them immediately. No one was forced to do that; I actually took the changes on myself with the rest of my team and also with Conservative MPs who came and told me what they would like to do. I also went out to visit various groups up and down the country. I felt that that was the best thing that we could do.

When this system is fully rolled out, it will be £50 cheaper per claim. It is an automated system and it is a personal tailored system. For those who cannot get access, or who are not sure about the IT and how to support it, we have given an extra £200 million to local authorities to support people—to help them with IT and to help them with debt—not that we would ever recognise that from the scaremongering of the Opposition.

Labour talks about poverty figures, but, compared with 2010 when it was last in office, there are now 1 million fewer people in absolute poverty. Rates of material deprivation among children and pensioners have never been lower, inequality has fallen and remains lower than in 2010, and according to the latest figures, out this week, inequality, because of our benefit and tax changes, has fallen by two thirds in the last year. I wish the Opposition would keep up with the rapid changing of things.

We are helping more people into work. More than 3.2 million more people are in work—1,000 jobs every day since 2010. How much evidence do the Opposition need, for heaven’s sake? The support is there, and now the advances. It was key we made those changes in the last Budget. We knew if people were having difficulty with the benefit, which was there to support them, we had to make those changes—the advances, the two-week run-on for housing benefit, stopping the waiting days—and now we find out that 4% of people are moving into work in fewer than six months and that 50% spend more time looking for work. That is the reality.

Please allow me, Mr Deputy Speaker, to mention some of the real people I have met and spoken to and what they are saying about universal credit. Shafeeq, who was homeless, got an advance that got him temporary accommodation and put him in a better place to look for work. He said it

“helped me out a great deal and I’d have been lost without it”.

He is now in a job. Lisa said an advance payment helped her to secure a place with a childcare provider. She is paying it back over 12 months, which she says means a great deal to her. Gemma, a lone parent, said,

“it’s amazing being able to claim nearly all my childcare costs back, it’s a real incentive to go out to work – I’m going to be better off each week”.

Ben in Devon had a work coach, who helped him to progress in work from day one. Ryan from Essex had a lack of work experience and confidence, and his work coach helped him through universal credit. I will end it there—with the people receiving the benefit.

Employment Rates

Margaret Greenwood Excerpts

Wednesday 6th June 2018 Westminster Hall

[Margaret Greenwood (Wirral West) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I begin by congratulating the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) on yet again securing this debate, and on his work on youth employment as chair of the all-party parliamentary group on youth employment. We have heard some very interesting contributions today, including from the hon. Gentleman himself, and I really look forward in particular to the group’s work on care leavers and prison leavers, who are a matter of concern; I am sure he shares that concern.

We heard a good contribution from my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), who quite rightly raised the issues of in-work poverty, insecure contracts and food bank use, all of which have risen, as well as discussing how zero-hours contracts devalue the rights of employees. He also spoke about the importance of looking at a broad range of measures and at the lived experience of work; the testimony he received from his constituency, via his Facebook page, was very interesting.

My hon. Friend the Member for Warwick and Leamington (Matt Western) made a useful intervention about the question of the availability of hours for people in insecure work, and said that rather than looking at a “jobs miracle” we are looking at a “jobs mirage,” which I thought was a pertinent way of describing the situation.

I welcome the fact that the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) spoke about the particular issues that rural communities face. He also called for the quality and quantity of work that is available to be a focus for the Government across the board.

The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) said that he did not agree with banning zero-hours contracts. I have to disagree with him on that, and I remind him that the number of people on zero-hours contracts is heading towards a million, so it really is a significant issue and I will touch on it later in my speech.

The hon. Member for Edinburgh North and Leith (Deidre Brock) quite rightly called for fair pay—enough for people to live on—and pointed out that the national living wage is not, of course, an actual living wage.

Increases in employment are welcome, but we also need to look beyond the statistics, as many Members have said, to see what the world of work is really like. Average real pay has still not returned to the level it was at before the financial crisis, and although inflation has started to fall, it has nevertheless outstripped wages for almost all of the period since 2010. Public sector workers have been particularly badly hit; they saw their pay frozen for two years, in 2011 and 2012, and since then any increase has been capped at 1% a year, regardless of the rate of inflation.

Then, of course, there is a generation of people who were in their twenties at the time of the financial crisis, so they have spent almost all of their adult life in this period of austerity. They are now in their thirties—an age when many of them will have young children—yet median pay for people in that group is nearly 9% below the level that it was at in April 2008.

The Resolution Foundation predicts that this decade is likely to be the weakest decade for real pay growth in almost two centuries. Some 20% of Britain’s 33 million workers earn £15,000 a year or less, and a recent report by the Centre for Social Justice forecast that the pay of those workers in particular would be squeezed over the next decade, as a result of trends such as the growth of the gig economy, automation and global competition. So can the Minister tell us what action the Government will take to improve the prospects of low-paid workers and what investment they will make in skills?

Around 8 million people are living in poverty in the UK, even though at least one person in such households is in work, and of course many people move in and out of low-paid work. Universal credit was originally aimed at smoothing the transition into work and at making work pay, but the cuts to work allowances announced in the summer Budget of 2015 severely damaged the work incentives that universal credit offers.

Reports by independent organisations such as the Resolution Foundation and the Equality and Human Rights Commission have made it clear that the increase in the national living wage and personal allowance do not compensate for the cuts to social security since 2010 for people on low income, with disabled people and single parents being hit especially hard.

According to a TUC report, the public sector pay cap, coupled with cuts to in-work support, means that the number of children in working families growing up in poverty will be 3.1 million this year, which is 1 million higher than in 2010. Will the Government listen to the call from the TUC and Labour to reverse the cuts to work allowances in universal credit and abolish the pay cap across the public sector, which Labour has committed to doing?

There are deep inequalities in the labour market, on the basis of where people live, ethnic background, gender, age and disability. The Government have repeatedly failed to address those inequalities, despite the Prime Minister’s fine words outside No. 10 Downing Street on coming to power. More than eight out of 10 companies employing more than 250 staff—such companies were required to report on their gender pay gap in April—paid men more than women and three out of 10 of them had a gender pay gap higher than the national median of 18%—in some cases it was over 50%. So now we know about those companies, but they will not face any action as a result, except perhaps reputational damage. Labour would introduce fines for companies that have a high gender pay gap that they have failed to reduce. Are the Government going to act on the gender pay audit, and if not, why not?

According to the Prime Minister’s race disparity audit, around one in 10 adults from a black, Pakistani, Bangladeshi or mixed background are unemployed, compared with one in 25 white British people. There are also significant differences in the kind of work that people do. For example, more than two in five people from a Pakistani or Bangladeshi background work in low-skilled occupations. Audits are important to tell us what the facts are, but we need action to address the issues they raise. How are the Government going to do that?

I turn to the situation for disabled people. Back in November, the Chancellor disgracefully sought to somehow blame disabled people for the UK’s poor productivity record. That was particularly shocking given the Government’s approach to supporting disabled people into work. The Work and Pensions Committee has highlighted that funding for specialist employment support for disabled people will fall substantially, from around £1 billion under Work Choice and the Work programmes to £554 million over the lifetime of the Work and Health programme.

A study by WPI Economics for the Employment Related Services Association estimates that the number of disabled people receiving specialist employment support will drop from around 300,000—the number it was between 2012 and 2015—to only 160,000 between 2017 and 2020. That would be a cut of around 50%, so I would be grateful if the Minister could comment on that, as it would not only be clearly detrimental to the lives of many disabled people, but would make no economic sense. Research by Scope suggests that a 10% increase in the number of disabled people in work would increase GDP by £45 billion by 2030 and benefit the Exchequer by £12 billion. If the Chancellor really wants to address the UK’s productivity problems, he might like to give those figures some thought.

The majority of employment support for disabled people will be provided through Jobcentre Plus by general work coaches. If the Government are going to take employment support back in-house, will they look again at providing specialist support, rather than adopting a generalist model for work coaches?

With youth employment, the figures are less rosy. One in eight young people aged 16 to 24 are unemployed, which is much higher than the overall unemployment figure. The number of young people who are economically inactive rose over the past year. That is a matter of real concern. Just over 11% of 16 to 24-year-olds, or 808,000 young people, were not in education, employment or training—NEET—in the final quarter of 2017. Only about two fifths of those young people were registered as unemployed. The rest were economically inactive and hidden from the benefits system. The proportion of certain groups that are not in education, employment or training is shockingly high. Some 30% of disabled young people and 40% of care leavers are NEET, as compared with 9% of other young people. The Children’s Society has made a strong case for there to be a specific marker for care leavers in universal credit, as in legacy benefits, so that we can measure their progress. Will the Minister commit to doing that?

Since April 2017, young people aged 18 to 21 claiming universal credit receive employment support through the youth obligation. After six months of what is supposed to be intensive support, they are required to take up an apprenticeship, training or a work placement. However, organisations such as Centrepoint are concerned that young people who face the greatest challenges in finding work—for example, care leavers—might need longer than six months and more personalised support to get to the point where they can do that. The all-party group has also made that point, stressing the importance of young people with greater challenges being given support in the first instance to develop basic skills. Can the Minister tell us what percentage of young people have found work through the youth obligation so far? Will he look at the case for personalised support for young people on universal credit through specialist work coaches?

The European social fund is a vital source of funding for employment support at the local level for disabled people and young people who are NEET, for example. In the present funding round for 2014 to 2020, the UK is receiving around £500 million a year, but ESF funding is important not only for the direct support it provides, but for attracting funding from other sources. The Government have announced that they will create a shared prosperity fund to replace the ESF, but time is running out to have a successor ready in time. They have said that they will publish a consultation some time later in the year, but no timescale has been announced. Can the Minister tell us when the consultation will take place? Can he tell us what he is doing to ensure that there will be no gap in the provision of employment support when ESF funding comes to an end?

Young people are also more likely to be working part time, in temporary employment or on a zero-hours contract than workers who are older. It is little wonder that the chief executive of the Financial Conduct Authority warned last year about levels of debt among young people that are built up in just trying to cover basic bills. Women are especially likely to be in part-time or insecure work. Some 55% of people on a zero-hours contract are women, and 45% are men. Similarly, a high proportion of people from some ethnic minority communities are more likely to be in part-time or insecure work. According to the Government’s race disparity audit, more than one in four Pakistani and Bangladeshi workers were employed in distribution or in hotels and restaurants, and one in five were in transport and communications industries, where low-paid, insecure work is common. Around 900,000 people are on zero-hours contracts.

More than half the zero-hours workers in a TUC survey said that they had shifts cancelled at less than 24 hours’ notice. People with caring responsibilities simply cannot afford to take shifts at such short notice. Having made provision for childcare, to then have a shift cancelled is particularly frustrating and expensive. Three quarters of the people responding to the survey said that they had been offered shifts at less than 24 hours’ notice, and a third said that they had been threatened that they would not be given shifts in future if they turned down work. How are people supposed to manage their finances and their lives when they are on zero-hours contracts—when they do not know how much money will be coming in each week and how much childcare they are likely to need? Will the Government ban exploitative zero-hours contracts, as Labour would?

The hon. Member for Berwickshire, Roxburgh and Selkirk spoke of the importance of the work of self-employed people. In evidence to the Work and Pensions Committee in January, the director of universal credit at the Department for Work and Pensions said clearly:

“Self-employment is a cause of in-work poverty.”

We should all be alarmed by that statement. The number of self-employed people has increased. They now make up about 15% of the workforce, or 4.8 million. That figure is for 2017, and compares with 12%, or 3.3 million, in 2001. The design of universal credit means it can fail to protect self-employed people on low income from poverty. Under the minimum income floor, self-employed people claiming universal credit are assumed to be earning the equivalent of 35 hours at the national living wage after a year, even though in many cases their earnings may be much less. That is exactly why they need to claim universal credit.

In February the Office for Budget Responsibility estimated that by 2022-23 more than two thirds of self-employed people claiming universal credit would lose out from the minimum income floor by an average of £3,000 a year. Someone who is self-employed, but on exactly the same annual income as someone who is an employee, can be entitled to less universal credit because it fails to take account of the fluctuating earnings that are a basic characteristic of self-employment.

In conclusion, high rates of employment should be good for those who are employed. They should mean higher wages and more security, but in reality people can face years as agency staff on temporary contracts, and zero-hours workers can have shifts cancelled at less than a day’s notice, with all the insecurity that that brings. It is little wonder that the TUC has reported parents being penalised by employers for asking for flexibility for family reasons, such as for simply wanting to take annual leave when their child is sick. Work should be a route out of poverty, but recent research by the Living Wage Foundation reveals that more than a third of working parents on low incomes have regularly skipped meals because they are short of money, and almost half have fallen behind on household bills. On coming to power, the Prime Minister promised outside Downing Street to be on the side of families who were just about managing, but it is clear that her Government are failing to do that. High employment rates are welcome, but they do not tell the whole truth about most people’s experience of the world of work.

[The Minister for Employment (Alok Sharma)]

It is an absolute pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) on securing, for the second time, this important debate on recent trends in employment. He made a fine speech, as did colleagues from all parts of the House. I have time in this debate to respond to a lot of the points that have been raised, and I will aim to do that. I will also come back to some of the points that my hon. Friend raised.

Sir Roger, I think you and I are probably the only Members here who were in the House in 2010, when the Conservative-led Government came into office. One of their first acts was to introduce an emergency Budget. At the time—both during the debate and subsequently—there were many siren voices on the Labour Benches that warned with great conviction that the Government’s policies would lead to a big increase in unemployment. Well, those doom-laden predictions have not come to pass; as Members on both sides have pointed out, we have seen strong jobs growth.

The hon. Member for Warwick and Leamington (Matt Western) is no longer in his place, but, frankly, to talk about this jobs miracle as a mirage is insulting. It is insulting to the more than 3 million people who now have a job as a result of the jobs created since 2010. It is also insulting to the employers—the hard-working companies and organisations that have created those jobs.

[Margaret Greenwood]

Will the Minister comment on the 900,000 people who are on zero-hours contracts and cannot manage their lives? They do not know how much money they are going to earn. They do not know how much childcare they need. It is a state of real insecurity, creating anxiety for a lot of people, and it is not good for the economy either.

[Alok Sharma]

I will of course come on to discuss precisely those points, because they are important.

The labour market statistics published last month by the independent Office for National Statistics—I point out once again to the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) that it is independent—show that employment in the United Kingdom reached a record high in the last quarter of 75.6%. That was the 17th new record employment rate since 2010. Employment is up by more than 3 million since 2010. I place on record my thanks, as my hon. Friend the Member for Mid Dorset and North Poole did, to all the businesses and organisations across our constituencies that have created those jobs. The unemployment rate has fallen to 4.2%, which is a 40-year low. As my hon. Friend pointed out, there are now more than 800,000 vacancies across our economy.

Those who cannot quite accept that positive trend will say that all those jobs are low paid and temporary, but that is absolutely not true. Some 70% of the increase in employment has been in higher skilled occupations that pay higher salaries. Three quarters of them are full time and permanent.

A point was made about where those jobs are created and whether they are all in London and the south-east. I can confirm that 60% of the growth in private sector employment since 2010 has been outside London and the south-east.

Various colleagues, including the hon. Member for Wirral West (Margaret Greenwood), made a point about zero-hours contracts. Such contracts represent less than 3% of all people in employment. The hon. Lady is right to say that that is around 900,000 people, but the number is down on the year. On average, someone on a zero-hours contract usually works 25.2 hours a week. Again, of those who stated a preference—to be clear, this is in the ONS’s own labour force survey—only 30% of those on a zero-hours contract stated that they wanted to work more hours. So when the hon. Member for Plymouth, Sutton and Devonport talks about only a small number of people valuing such flexibility, I have to say that that is not what we see from the independent figures—a point well made by my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant).

[Margaret Greenwood]

I thank the Minister for giving way again; he is being very generous. Is he aware of the issue of sexual harassment in the workplace among staff on zero-hours contracts? What advice would he give to a young woman on such a contract who is experiencing that? Where can she go for support? How can she tackle it, and how can she remain employed, but in a safe environment?

[Alok Sharma]

Frankly, any kind of bullying and any such acts are completely unacceptable, whether someone is on a zero-hours contract or a full-time contract. As the hon. Lady knows, there are avenues open to people, but if she has specific cases, she is welcome to come and talk to me about them. It is important that we have flexibility in work patterns, which is what zero-hours contracts allow, but it is also right that the Government have banned exclusive zero-hours contracts.

We have discussed employment outcomes by groups. If we look at some of the groups that have historically been under-represented in the employment market, we have seen a significant improvement in their participation in the workforce. The hon. Member for Edinburgh North and Leith (Deidre Brock) welcomed the record high of 71.2% in the female employment rate, which I of course welcome as well. There are now more than 3.8 million people from ethnic minorities in work—an increase of 1.1 million since 2010. The ethnic minority employment rate currently stands at 65.1 %, which is a record high. However, I completely accept that the employment gap between ethnic minorities and the white population is too high, at 12%, and we are working to address that. If I have time, I will talk about the response to the race disparity audit.

My hon. Friend the Member for Ayr, Carrick and Cumnock talked about disabled people. We have seen a welcome rise in the employment of disabled people—600,000 in the past four years—to around 3.5 million people today. He also talked about the Disability Confident scheme. More than 6,000 employers are involved in that and in Access to Work support. That is really important in encouraging everyone in our country who aspires to work to have an opportunity to do so.

My hon. Friend the Member for Mid Dorset and North Poole made a powerful opening speech and highlighted the excellent work of the all-party group on youth employment, which he chairs. He has shared with various ministerial colleagues reports from inquiries that the APPG has conducted. Of course, I would be delighted to come to the APPG to discuss its work and to meet the youth ambassadors, who I am sure will ask challenging questions. As my hon. Friend highlighted, we have made progress on youth employment. The employment rate for those not in full-time education stands at 74.9%, and youth unemployment is down by 40% since 2010.

My hon. Friend made international comparisons, some of which I will repeat. The UK youth employment rate is 18.3 percentage points above that of the euro area and more than 16% above the EU average, but of course I agree with him that we need to do more. We therefore have a skills agenda, with a focus on apprenticeships and technical education. Colleagues have talked about the youth obligation support programme, which started in April last year, and about the ability to get work experience. We have also been encouraging work-based academies, which I think have been very successful.

My hon. Friend talked about whether there should be better working across Government on these issues. Of course, many are joined up. I can confirm that we have a number of taskforce initiatives where Ministers work together. He will be pleased to know that straight after this debate I will be having a meeting with the Minister for Apprenticeships and Skills to discuss precisely these issues.

The Government are funding lifelong learning pilots, investing in a national retraining scheme, and delivering basic digital skills and careers advice for older workers who need them. We are also ensuring there is support to assist those with a health condition or disability, to make sure they are able to access the support they need to move into work.

On the cost of living, I know that all Members will welcome the fact that the ONS reported last month that salaries are starting to outpace inflation. I certainly want to see that very welcome trend continue. We absolutely recognise that people need additional support with living costs, and we have been providing that support. We have recognised that high childcare costs can affect parents’ decisions to take up paid work or increase their working hours. That is why, by 2019-20, we will be spending around £6 billion a year on childcare support. That includes 30 hours’ free childcare for working parents of three and four-year-olds. Within universal credit, claimants are eligible to claim up to 85% of their childcare costs. The outcome from independent evaluation in areas of early introduction shows that, with increased childcare support, parents are able to work more flexibly and increase their hours. We are championing shared parental leave and have introduced a right to request flexible working.

My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) welcomed the increase in personal allowances, which means that a typical basic rate taxpayer now pays more than £1,000 less in income tax than in 2010. We also introduced the national living wage in 2016, which increased by 4.4% this April. Thanks to the national living wage, full-time minimum wage workers have had a boost of £2,000 since 2016.

Numerous colleagues, including the hon. Members for Edinburgh North and Leith and for Plymouth, Sutton and Devonport and my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk, talked about job quality and the Matthew Taylor review. Although we need to continue to work to maintain high levels of employment, I absolutely agree that we must also address the important issue of job quality. Among its recommendations, last year’s Taylor review asked the Government to focus on the quality of work and to identify a set of measures to evaluate job quality.

A strand of the Government’s industrial strategy has a focus on the creation of good jobs and greater earnings power for all, so the Government have outlined five foundational aspects of good work: overall satisfaction; good pay, which includes perceptions of fairness relative to one’s peers; participation and progression in the workforce, which includes the ability to work flexibly and acquire new skills; wellbeing, safety and security at work; and voice and autonomy in the workplace. It is self-evident that if people feel a sense of control over how they carry out their job, they will generally feel much more positive about it. The Government are working with experts to identify a set of measures against which we can evaluate quality of work, and I certainly look forward to the outcome of that work.

I have time to go through a number of points that colleagues have raised. My hon. Friend the Member for Mid Dorset and North Poole talked about the hospitality industry, and we absolutely want to see a strong and vibrant hospitality sector. I recently met Brigid Simmonds, chief executive officer of the British Beer & Pub Association, to talk about the hospitality sector. In February this year, the Department for Work and Pensions ran the annual Hospitality Works campaign, which aims to raise awareness of the thousands of great career options that exist in the sector and to showcase some of the key employers we work with.