Universal Credit and Debt
Debate between Neil Gray and Lord Bellingham(5 years, 6 months ago)
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Neil Gray
My hon. Friend is absolutely right. Of course, she will know that a different system is being created for that in Scotland. I ask the Minister to look at the definition of terminal illness that has been adopted by the Scottish social security agency, which I think would help to deal with some of these problems.
Currently, deductions for indebtedness can be up to 40% of the standard allowance, and the Government are looking to reduce that to 30%. If we accept that the standard allowance is barely enough for anyone to live on in the first place—figures from the Joseph Rowntree Foundation show that adults without children on UC receive only 40% of the minimum income standard, while adults with children get just 60%—reducing that by a third is just going to exacerbate indebtedness. Most people would struggle if their income was reduced by a third without warning or negotiation, but I also acknowledge that there is a debt, so some effort must be made to repay it. There should be an affordability test and discussions in advance of a deduction being applied, and the recipient should be afforded expert advice and advocacy during that process. That surely has to happen if the DWP is going to give people help and breathing space for indebtedness.
As part of the summer pilot, the Government should consult extensively with key stakeholders, the devolved Governments and the expert charities, and those in receipt of universal credit themselves, particularly disabled people, to make sure that the system is got right and that no one is further impoverished as a result of universal credit.
Speakers from across the House have demonstrated in this debate, once again, that universal credit is still not working. It is time for the Government to listen, to restore and expand the funding available to universal credit and to fix the inbuilt technical issues and flaws that have been raised today and previously, which are contributing to a rise in food bank use and the impoverishment of those both in and out of work.
