Universal Credit Roll-out

Marie Rimmer Excerpts

Tuesday 24th October 2017 Commons Chamber

[Damian Hinds]

I agree with my hon. Friend entirely. It is so important to go through the process and optimise the system, because universal credit prepares people for work, helps them into work and helps them to get on in work. Eventually, we estimate that about 7 million people will benefit from the advantages it brings, with a quarter of a million more people in paid work as a result. We know that it is working already. Three separate studies show that people get into work faster with universal credit than they do with jobseeker’s allowance. Once there, they face none of the hours rules and cliff edges that have held people back.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

The Government listened to some of the requests raised in a Westminster Hall debate on this issue in January 2016. There have been some changes and improvements. However, it is the cuts and the savage implementation of sanctions that are hitting people the hardest, and giving a loan to somebody already in debt is not a help at all. You should not be doing that, Minister.

[Damian Hinds]

We think that having a system with conditionality is important and the level of sanctions is down quite significantly year-on-year. The vast majority of people are not receiving sanctions.

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[James Cartlidge (South Suffolk) (Con)]

It is incredible fun to follow the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), who seemed to be commenting on whether or not the Speaker was here, as far as I could tell. Last Wednesday, when we had the Opposition day debate, was the first day of the roll-out of universal credit in South Suffolk. I will be keeping a close eye on that. Like everyone else, I am sensitive to what people are saying about the real cases that are out there, as we need to be.

I remind hon. Members that we are here today not just because of process or a parliamentary vote, but because Gordon Brown committed one of the greatest blunders in UK public policy. He extended the means-tested benefits system so that it covered not just the poorest, the incapacitated and those in areas of industrial decay, but every area of the income stream. He nationalised millions of families’ incomes and created a massive new era of benefit dependency through the so-called tax credit system, and that was a fundamental error.

I am not speaking theoretically. The Opposition have talked about the real world, so let me talk about my experience. When I ran a small business, I had members of staff who refused to work more than 16 hours a week, because they would lose their tax credits if they did so. I even had someone decline a pay rise because of the impact it would have on their tax credits. We have to understand that Gordon Brown created the road to serfdom—the idea that everybody should be dependent on the state—and I fundamentally disagree with that.

It is impossible to move from such dependency on the state through a cuddly process. When people have been made dependent, it is difficult to break them away from that in the way that is best for them, but universal credit does so. Of course the process is incredibly tricky, but we need to look at the benefits of universal credit. It encourages people to work more hours and make the most of their talents instead of relying on the state. It includes universal support from work coaches, to help people to make the most of their ability. That is the sort of system we want, and we should remember that principle.

[Ms Rimmer]

The last Labour Government lifted more than 1 million children out of poverty and paid off more debt—all inherited from a Conservative Government—than any previous Administration on record.

[James Cartlidge]

Fundamentally, we asked taxpayers to spend £30 billion a year putting a ceiling on wages and productivity. That is basically what happened, as I saw. Why would people want to earn more or be more productive, if they were so penalised through the benefits system? We ask ourselves why we have had such flat wage growth and such flat productivity. It is because we are paying people not to work harder.

That has a fundamental implication for the years ahead, because Brexit is coming. We need to remember what the country voted for. I campaigned to remain, but in my view the biggest issue was immigration. We want sustainable numbers of people to come into this country, but if that is to happen when we lose access to this almost limitless pool of very hard-working labour, particularly from eastern Europe, we will have to get the work done by people in the United Kingdom.

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[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

The Government ignored the decision taken during the Opposition day debate in Parliament last week. When will this Government of the fifth richest country in the developed world start to listen and learn to govern for the benefit of all people? They ignored the pleas expressed in the Westminster Hall debate on the north-west roll-out in January 2016. They ignored the warnings about fundamental flaws, public hardship, debt creation, complex systems, payment delays and the loss of client information. They were asked to fix the problems before the roll-out, but the roll-out continued.

There has been some improvement since then in the administration and some people have got jobs and got a named adviser—that has been helpful—but we have also seen the savage implementation of sanctions on people attending training provided by the DWP, on people going for interviews and on people who are hospitalised or on a hospital visit, just for being slightly late. I suggest that the Minister start to carry out some exit interviews among the staff.

The Government ignored the warnings from Government-commissioned IT companies on the complexity of the system and on the fact that the development timeframe could not be met. They also ignored warnings from councils and the Local Government Association that they could not develop their systems to fit universal credit in the time allowed. They also ignored the former Secretary of State, who quit days after the 2016 Budget after calling on the Prime Minister to reverse the cuts to universal credit.

The primary aims of universal credit were to simplify the system, to improve work incentives and to tackle poverty among low income families. This was wrecked in the 2016 Budget. Cuts in work allowances and changes to taper allowances resulted in 63% deductions—exactly the same as the tax credit threshold. The incentive to work was gone. Both measures were introduced by statutory instrument, using the negative rather than the positive procedure, so there was no parliamentary scrutiny. That is how they were sneaked through. There will be a £9.6 billion reduction in support to working families over the next five years, and the figure will be £3.2 billion each year by 2020. That illustrates the difference from the initial universal credit, for which there was much support. The incentives have gone, and a lot less money is going to the recipients. A former Prime Minister has described universal credit as

“operationally messy, socially unfair and unforgiving”.

Universal credit has been a universal shambles from the outset. This Tory Government were stopped in their tracks from cutting tax credits by slipping the cuts through via statutory instruments. Things have got worse under universal credit, with the Government deciding to implement further cuts in benefits for vulnerable people by rolling out the system. There was a public outcry on tax credit cuts because we had a debate in this Chamber and the media took up the issue. The results of these changes include increased personal borrowing and soaring debt, hungry children, cold children and schoolchildren suffering mental health issues and long-term damage to their lives. This must not happen in the fifth richest country. It must be stopped. The Government must listen to Parliament and to the Select Committees and make universal credit fit for purpose.