Universal Credit

Michael Tomlinson Excerpts

Wednesday 17th October 2018 Commons Chamber

[Steve Double (St Austell and Newquay) (Con)]

I am pleased to be able to contribute to this debate, and it is a joy to follow the hon. Member for Bury South (Mr Lewis). My experience of the roll-out of universal credit in my constituency bears no resemblance to the picture painted by Labour Members. Now, let me say that universal credit is not perfect, and there are still issues that we need to correct, but it has been a positive thing overall that is achieving the intended outcomes for those who are claiming it.

Reform of our benefits system was long overdue. I saw the impact in my constituency, which has some of the lowest-paid people in the country and where people were locked into a benefit system that abandoned them to being out of work and to not being able to earn more by working more hours. Basically, it provided a trap in which they lost their aspiration and their enthusiasm for work, because they saw so many people on unemployment benefits who were better off than those who were in work. Universal credit has begun to change that, and it is absolutely the right reform at this time.

The feedback from the DWP staff in my constituency, both at the Jobcentre Plus and the UC processing centre—it covers the whole south-west and now some London boroughs because the staff there have performed so well that they are being given other areas to process—is that UC is working well. The staff say that it is a simple system. They love it, and claimants like it. However, they also told me that one of the problems is all the scare- mongering, primarily from the Labour party. Claimants come in fearful and terrified of what UC is going to mean for them. Then, when staff sit down and work it through with them, they suddenly realise that UC is not like the terrible picture that is being painted of it and their experiences are actually positive.

As for evidence that that is happening, the Jobcentre Plus staff told me that people who move over to universal credit tell their friends how good it is after a few months, and they then have people coming into the Jobcentre Plus saying, “My friends have told me that UC is so good for them. When can I sign up for it? I want the positive experience that they have had.” That is what the jobcentre staff have told me.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

My hon. Friend is giving some powerful first-hand testimony of speaking to Jobcentre Plus staff. The work coaches at the Jobcentre Plus that serves my constituency say that UC is the right policy and that it is in fact helping them to do the job they want to do.

[Steve Double]

My hon. Friend is exactly right. That is what every single member of staff at the Jobcentre Plus is saying. They tell me that they love the new system, which is enabling them to help people to achieve the outcomes that we want everyone to achieve.

We need a balance here. Yes, not everything is perfect, but the Government have used the right method in rolling out UC by taking a phased approach, by evaluating, reviewing and learning, and by making changes where necessary to ensure that we get things right. That should be welcomed. We have seen in recent times how the Government made changes to the waiting times, to the advances and to other things to adjust the system to make it fit for purpose and ensure that it was achieving the outcomes that it was designed to achieve. I applaud the Government for taking that approach.

Many of us can remember the absolute shambles when tax credits were introduced with a big bang and all the problems at that time. This approach is right, and I encourage the Government to carry on taking the same approach as they roll out UC. They should keep listening to the feedback that comes back from DWP staff and from Members and make adjustments as necessary. It is clear that there is further work to do. We still need to look at the taper rate and the work allowance to make sure that work does pay. We have to make sure that people are incentivised to work, and to take on extra hours, by making sure they can keep as much of the money as possible.

We also need to consider extending the time for repaying the advances so that repayment is not a burden. People currently have to repay within a year, and perhaps two years would be better. People should be allowed to take the advance without being put under so much financial pressure to repay.

I say to the Department for Work and Pensions and to the Treasury that this reform is very important. Let us make sure it works by ensuring there is enough money in the system to make it work. It would be wrong if universal credit did not achieve what it is intended to achieve because of a lack of money. Let us make sure it has the funds it needs to work and achieve the outcomes we all want to see.

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[Chris Philp (Croydon South) (Con)]

My right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) is one of the most decent and compassionate men I have ever met, and the slurs we have just heard on his motivation are completely unacceptable and have no place in a calm and civilised debate. Some Labour Members, such as the right hon. Member for East Ham (Stephen Timms), have set an extremely fine example as to how these matters can be debated in a calm and proper way—I always listen carefully to what he has to say, because his speeches are always thoughtful and well delivered.

Let us remind ourselves of why universal credit was introduced in the first place. The previous system was broken and was not fit for purpose because there were in effect marginal taxation rates of over 90% in many cases, and there were cliff edges—at 16 hours of work, for example—that meant that people who worked more hours were worse off. People came to us, their Members of Parliament, and said, “We are not going to work any more hours, because there will be less money in our pocket afterwards.” That is clearly a completely unacceptable situation, which is why this reform, in principle, is so necessary.

We have heard today about individual errors in the system, which are obviously very regrettable and Ministers will want to correct them, but let us not forget that almost 6 million people are in receipt of these benefits—either the old ones or the new ones—and, when we are handing out 6 million payments a month, there are bound to be occasional individual errors. Let us not confuse those very regrettable individual errors with a more systemic issue.

Some systemic issues were identified during the roll-out of universal credit, and steps have been taken in the past six or nine months to address some of those issues.

[Michael Tomlinson]

My hon. Friend has mentioned two categories: systemic problems and individual problems. Surely people with individual problems should go to the Department or to their local Jobcentre Plus and say, “Please address this. Something has gone wrong.” In the case of systemic problems, we should adopt the Government’s approach of testing and learning to adapt and change the system.

[Chris Philp]

My hon. Friend is absolutely right, as always. Where there have been systemic issues, measures have been taken to address them. One example is that housing benefit now gets paid for another two weeks after the change to address some of the issues with rent arrears that Members have properly raised. Secondly, claimants can now get a 100% advance, which addresses the point raised by the right hon. Member for East Ham. The seven-day wait has also been eliminated.

The Minister will also want to think about fine-tuning the period when calculating eligibility. A person who receives their last salary payment, particularly if it is quite a large salary payment, towards the end of their last month in employment may not be eligible to receive a universal credit payment in the following month because their final salary payment counts towards the calculation. I have such a constituency case, and the dates need to be fine-tuned and studied a little more carefully. I would be happy to sit down with the Minister to go through the particulars of the case, which is quite technical and complicated, if it would assist him in his work.

Croydon South has the joint highest proportion of claimants who have been moved across to universal credit, at 43%. Only two or three other constituencies in the country have such a high rate, so we have quite a good base of evidence in my constituency. The SNP Front Bencher said that we should take with a pinch of salt what Conservative Members say—

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[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

I am pleased to be called to speak in the debate and to be given yet another opportunity to voice my full-hearted support for the universal credit policy. I also warn against some of the voices that we have heard from the Opposition Benches today and from outside this Chamber who have called for universal credit to be scrapped, not least the voice of the shadow Chancellor. We have heard today that that may now be the official policy of the Labour party. That is risky, taking us back to the days when Labour left office. We must never forget that, in 2010, the number of households in which no one worked almost doubled.

I have the privilege of being the chairman of the all-party group for youth employment. Each month, we look at the youth employment statistics—the number of people in work and out of work. We do that because the statistics are important but, of course, what is far more important is the lives of the young people that are transformed as they move into work and are given their first opportunity on the jobs ladder.

[Mr Harper]

My hon. Friend makes an important point. [Interruption.] If Opposition Members will be quiet, I can ask my short intervention. That will leave more time for them to speak. If they keep hectoring, it will take longer.

Will my hon. Friend confirm that, if we were to go back to the legacy system, what we would effectively be doing, given the withdrawal rates, is increasing the rate of tax on those young people going back into work?

[Michael Tomlinson]

I am grateful to my right hon. Friend for his intervention. I am sorry that he received the welcome that he did from Opposition Members because he makes a powerful point. Seeing young people’s prospects turned around is one of the greatest privileges of being the chairman of the all-party group. Those prospects will be put at risk if we wind back the clock and return to the legacy system—a system that disincentivised young people and, in fact, people of all ages from getting back into work. There was a marginal equivalent tax rate in excess of 90% and the 16-hour rule effectively disincentivised people of all ages, including young people, from getting back into work.

My hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) made a powerful point about the compassion of Members on the Conservative Benches. The hon. Member for Redcar (Anna Turley) said that this policy was cruel. There is nothing cruel about encouraging those who can work to get into work, just as there is nothing compassionate about trapping people in benefits. This is a progressive policy. It should be welcomed on both sides of the Chamber.

Earlier, my hon. Friend the Member for Cheltenham (Alex Chalk) said that he had gone to Jobcentre Plus and seen the difference that the policy was making for his constituents. My hon. Friend the Member for St Austell and Newquay (Steve Double) made exactly the same point. When we go into our jobcentres, we see the opportunity and positivity from the work coaches, who see that they can now do the job that they wanted to do when they went into it. This policy should be supported.

We have heard from the Employment Minister—I want him to confirm this in his response—that this policy helps people to get into work faster than under the legacy system. It means that, when they are in work, they stay in work longer, they have the potential to earn more and their progression is greater. I would welcome the Minister repeating that in his closing remarks. I invite Members on both sides of the House to support universal credit and to oppose the motion.