Universal Credit (Liverpool)

Maria Eagle Excerpts

Tuesday 11th September 2018 Westminster Hall

[Dan Carden (Liverpool, Walton) (Lab)]

I beg to move,

That this House has considered roll-out of universal credit in Liverpool.

It is a pleasure to serve under your chairmanship, Ms McDonagh, although in this debate it will not be possible for me to do justice to the magnitude of concerns that have been raised with me about the imminent full roll-out of universal credit across Liverpool. Disability charities, trade unions, civil servants, housing associations, private landlords, advice agencies, food banks, local councillors and the local authority have all provided me with briefings, statistics and case studies, for which I am grateful. Together, they paint a bleak picture of what lies ahead this autumn.

Starting this month, and continuing into November and December, jobcentre by jobcentre, full service universal credit will be rolled out across my constituency. I am here because of the people I have met in my surgeries and food bank visits, and because of the harrowing stories I have been told. I am here because of the people I have seen—people who are broken and who feel worthless and trapped in a cycle of poverty that they cannot escape. The roll-out of universal credit is only the latest onslaught from a benefits system that is stuck in Victorian times; it is just the latest instalment of austerity for our city—a city that has borne the brunt of eight years of cuts that have hit the most deprived areas the hardest. Our local authority budget has been slashed by 64%—£444 million since 2010—and 40% of children in my constituency are growing up in poverty.

According to the Joseph Rowntree Foundation, Liverpool has the second highest level of destitution of any city in the UK, and there is a lack of basic essentials, including food, shelter and toiletries. That is the climate in which the Government are imposing their flagship welfare policy—a policy that had cross-party support when it was launched in 2011, but is now a byword for institutional incompetence. It is six years behind schedule, universally unpopular and, according to the National Audit Office, likely to cost more than the system it replaces.

[Maria Eagle (Garston and Halewood) (Lab)]

I have a case of a mum who has started a new relationship, and consequently she has been put on to universal credit because her partner, who is from another area, is already on it. Her tax credits were stopped at the end of May, but by 31 August her application still had not started to be administered. If it were not for the mayoral hardship fund, Liverpool’s citizen support scheme and Can Cook, which have fed the family for two months, that family would be absolutely destitute. Has my hon. Friend heard of similar experiences in his constituency?

[Dan Carden]

I will come on to some of the case studies and personal stories that I have been told. Well-documented design flaws and unresolved administrative issues have seen tens of thousands of claimants plunged into debt arrears and reliance on food banks. My casework is already loaded with people who are struggling to make ends meet, and piling universal credit—a policy that Citizens Advice has called a “disaster waiting to happen”—on to an economic situation that is already bordering on crisis will lead to levels of hardship not seen in the city since the 1980s. This is the last chance to apply the brakes, stop the roll-out of universal credit, and fix the flaws in its design and delivery.

Universal credit lists its stated aims as: to improve work incentives, reduce poverty and simplify the benefit system, making it easier for people to understand, and easier and cheaper for staff to administer. Who could disagree with that? However, the National Audit Office found in June that:

“Universal Credit is failing to achieve its aims, and there is currently no evidence that it ever will.”

Worse still, the evidence on the ground in areas where full service universal credit has been rolled out is clear: not only is universal credit failing to meet its aims, but it is having the opposite effect. It is punishing those in work, exacerbating poverty, and creating an unwieldy, arduous and inefficient system that increases pressures on claimants and staff alike.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I congratulate the hon. Member for Liverpool, Walton (Dan Carden) on securing today’s debate. I apologise to the House that the Minister for Employment is not able to be here, so I am deputising on his behalf.

We are introducing universal credit at a time when record numbers of people are in work and unemployment is at its lowest rate in more than 40 years. Since 2010, 1,000 jobs a day have been created, and in the north-west region more than 3.4 million people are employed, up 268,000 since the 2010 general election. The north-west employment rate is 74.3%, up from 68.7% in 2010. Nationally, according to the labour market statistics released today, the unemployment rate is now 4%—it has not been lower since 1975—and the employment rate is 75.5%, which is again a near-record high.

It is a pleasure to serve under your chairmanship, Ms McDonagh, and it is also an opportunity for me to make the point that, nationally, the number of children living in workless families is down 608,000 since 2010. As of March 2018, the employment rate of people aged 16 to 64 in Liverpool itself was 67.6%, up from 60.3% in March 2010, and in Merseyside, as of March 2018, the employment rate had increased from 64.2% before the 2010 election to 70.2%.

Turning to the points raised by the hon. Gentleman, I will try to address the issues relating to universal credit. As I am not the Minister, I may not be able to answer the specific questions raised, but, as the hon. Member for Garston and Halewood (Maria Eagle) has been artfully demonstrating to me across the Chamber, I will write to hon. Members, or the Department will write to them, on the specific questions they raised.

The Government believe that universal credit remains a vital reform. It replaces an outdated and complex benefit system; the six benefits are replaced with one simple monthly universal credit payment, designed to support people whether they are in or out of work. There is no doubt that the old system did not incentivise people to come off benefits and get into work.

[Maria Eagle]

Does the Minister accept that the administration of universal credit is chaotic? I had a constituent who ended up being sanctioned for a year after his father died and he was unable to cope with going to meetings. After my office intervened, his benefit was reinstated and the sanction was removed. He had eight letters telling him that, but when he received his first payment, which was supposed to be a back payment, it consisted of £5.

[Guy Opperman]

I cannot comment on the individual case, but it is unquestionably the case that the old system had inherent flaws and, as the hon. Member for Liverpool, Walton very fairly said in his speech, it was right for it to be reformed at that particular time. We may have a debate and a discussion about the quality of the system thereafter, but the reform of the old system was unquestionably the right thing.

Under UC, claimants are better off when they move into work and better off when they progress in work; the payment is gradually reduced as earnings increase, so claimants will not lose all their benefits at once if they are on a low income. There is no 16-hour ceiling, no 16-hour floor and no risk to people’s benefit as they move into work. It also means that the more people work, the more money they get in their pocket. We believe that universal credit lies at the heart of our reforms to transform the welfare system, because it supports those who can work and cares for those who cannot.

The UC full service is available in approximately 63% of jobcentres in Liverpool, with those remaining to be rolled out by December, as the hon. Gentleman outlined. I would urge all hon. Members to visit their local jobcentres and to speak to the staff in charge of the system, the work coaches and the claimants who are attending. I myself have visited a number of jobcentres and sat in on randomly selected interviews with dedicated work coaches. I held a jobs fair last Friday in Hexham with my Jobcentre Plus, and I am going to another jobcentre this week.

--- Later in debate ---

[Guy Opperman]

I totally accept that, but with respect, Ms McDonagh, the integration of services is a nationwide matter, and the roll-out is happening across 430 jobcentres.

[Maria Eagle]

Would the Minister like to have a go at answering my question about administration of the benefit in Liverpool?

[Guy Opperman]

With respect, that is what I am attempting to do and intending to come to. The hon. Member for Liverpool, Walton raised the issue of local authority funding. The Department for Work and Pensions provides local authorities with UC support funding and new burden funding to take account of additional costs. The local authority should provide the data, and he should be aware that £14 million has been paid out in this tax year alone.

On the managed migration, there was a “Universal Credit programme full Business Case summary” early this year, which showed that when UC is rolled out it will deliver £8 billion worth of benefits to the UK economy every year. The hon. Gentleman mentioned Citizens Advice in his speech; he will be aware that only recently, when the changes were made to universal credit, it was quoted as saying:

“These changes should make a significant difference to the millions of people who will be claiming Universal Credit by the time it’s fully implemented.”

Similarly supportive comments were set out at the time by the Trussell Trust and others.

I will ensure that the Department writes to the hon. Member for Liverpool, West Derby (Stephen Twigg) on the specific point he raised. In relation to the lady from Everton, if he provides the detail to the Department I will ensure that a specific point is raised, and I will also ensure that the point about the constituent case mentioned by the hon. Member for Garston and Halewood is addressed.

It is important to mention that there have been significant changes and a “test and learn” approach to universal credit as it is being rolled out. Changes were made in November last year following the Budget, and the Secretary of State herself made changes in June this year. We have made a commitment that anyone we move onto universal credit without a change of circumstance will have their existing benefit entitlement safeguarded until their circumstances change. That is to accommodate the changes needed; managed migration will be completed in 2023. We have also announced that people on legacy benefits receiving severe disability premium will stay on legacy benefits until we move them, even if they have a change of circumstances, and we will look at protection for people previously in receipt of severe disability premium who have already moved onto universal credit.