Universal Credit and Welfare Reform

Nick de Bois Excerpts

Tuesday 11th September 2012 Commons Chamber

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

I am grateful for the opportunity to speak in the debate, mainly because, since I was elected at the last election, I have been contacted every single week by constituents who are concerned about the Government’s plans to shake up the benefit system—the so-called welfare revolution—and about what it will mean for them.

Universal credit was supposed to lie at the heart of that revolution, but it appears to be unravelling. The Secretary of State’s flagship project is descending into chaos; it is £100 million over budget and the timetable has slipped by several months. He needs to get a grip on it before it sinks and takes £2 billion of public money with it. I am surprised that he did not take the chance of a free transfer to another team to get him out of the mess.

A welfare project as all-encompassing as universal credit is too important to get wrong. We are not talking about numbers and schemes but about people having enough money to feed and clothe their children and keep warm. In Scotland we have experience of the Tory Government testing out their flawed policies and failing in the face of mass opposition, and I worry that this policy will be as disastrous as the poll tax. I sincerely hope that it will not.

One of the few things that most Members agree on is the importance of a welfare system that encourages people who are able to do so to look for work. It is very difficult for people to find a job at the moment, and if the Secretary of State is as compassionate as he makes out, he should recognise that when he does his tour round Glasgow. In West Dunbartonshire more than 19 people are chasing every job vacancy. At times in the past year that number has been as high as 40 and it continues to fluctuate.

The Government have cut the number of public sector jobs in West Dunbartonshire, including at Jobcentre Plus. The Scottish National party Government have excluded my constituency from any assistance such as from enterprise zones and the youth unemployment strategy fund despite the fact that when they announced the areas that would get money, West Dunbartonshire had the highest youth unemployment and had been named as the most difficult place in the whole of Scotland to find a job. The SNP continues to ignore us.

The people of West Dunbartonshire feel let down by both the UK and the Scottish Governments, and that may be one reason they booted out the SNP council and elected a Labour one in May. They have never elected a Tory council, I am glad to say. Even for those people who are in work, many are now worse off as a result of the Government’s changes to tax credits. The new criteria on minimum working hours mean that some families will be better off out of work and on benefits. Is that really what the Government want; is it what their Back Benchers want? I really do not think it is, so I suggest that they look again at the system.

It should never be the case that it is better to be on benefits than in work—[Interruption.] Well, this is what the Government are doing. If Government Members do not like it, I suggest that they tell their Government.

[Nick de Bois (Enfield North) (Con)]

So does the hon. Lady support the benefit caps that mean that some will be better off working? That is presumably why she voted against them.

[Gemma Doyle]

I want work to pay for everyone and what the Government are doing means that it does not for some families, and that is the black-and-white truth.

In West Dunbartonshire 200 households are set to lose up to £4,000 a year as a result of the Government’s changes and, with the jobs market already very difficult and businesses struggling to keep afloat, it is almost impossible for people to increase their working hours.

Unemployment in West Dunbartonshire was falling before the Government were elected, but under their stewardship of the economy it is rising again. What the Secretary of State and his Ministers forget is that when they make a decision the people who pick up the pieces are the volunteers and staff who try to help people through the welfare maze. That includes the staff in Jobcentre Plus and in my constituency it includes West Dunbartonshire welfare rights service, the Independent Resource Centre and the citizens advice bureau. They are all swamped at the moment. They help people with appeals and frequently win them because Atos has such a low rate of getting it right the first time around. Even for people who win their appeal the stress continues because they are soon sent for further assessment; they are knocked back, taken off benefit again and go into a never-ending cycle of appeals and assessments.

One of the organisations has told me that often claimants are told on the phone that they have been judged fit for work, and that the clock has started ticking on the time within which they can appeal, but that they cannot make that appeal before they receive the formal decision notice, which often does not appear until more than a week later. I would ask Ministers to look at this issue; I hope that it is not an attempt to squeeze the amount of time that claimants have to make an appeal. The delay is certainly making it more difficult. The organisations in my constituency have also raised with me the problem of the IT equipment used to move towards the online system.

I also want to raise briefly a specific concern about the replacement of disability living allowance with the new personal independence payment. Earlier this summer the Prime Minister apparently intervened to ensure that injured veterans would not have to undergo further assessments for PIP and to protect their benefits, but I understand that no definite protections have yet been put in place. I have been contacted by a veteran who is very concerned that only those who qualify for the armed forces compensation scheme will be covered by the protections and that pre-2005 veterans who were injured during their service and receive a war disablement pension will not be covered under the protections. I ask the Minister to look at that issue and hope that we will have some clarity on it soon.

There were elements of the universal credit that sounded promising, such as a simpler and more streamlined application process, but there are many outstanding concerns, as we have heard today. I support a welfare system that makes work pay. I would also support a Government who create work, but this Government are failing to do that.

[Nick de Bois (Enfield North) (Con)]

I am grateful for the opportunity to contribute to the debate. I am not recognised for praising those on either Front Bench, but I must say that I am pleased that both sides genuinely seemed to take a workmanlike approach to the debate. Furthermore, I hope that there is a genuine consensus that the debate is about getting people back to work, rather than labouring on about welfare cuts and so on, which would be the more stereotypical debate. I think that the premise that it is about getting people back to work is genuinely accepted. At moments during the debate I wondered whether Opposition Members are fair-weather friends of that argument, but I hope I am generous in assuming that it is the main goal.

I will set out a little context before turning to some specifics. In 2010 around 5 million people—12% of the working-age population—were effectively trapped on out-of-work benefits. It is also true that many of them—about 1.5 million—had been receiving such benefits for a considerable time, which meant that we were dealing with not only a personal problem that was individual to each of those people, but a cultural problem that demanded change to help move them from a life of dependency to one of independence.

Reforming welfare is as much about driving cultural change as it is about the process. We are fighting something that has become intergenerational and almost institutional. Worklessness and welfare dependency are two evils that are very close together and they do not simply develop in difficult economic times; we have enjoyed long periods of growth, yet 11% of the working-age population—some 4 million people—were on out-of-work benefits during those years. It is interesting, although worrying, that during the last economic boom employment rose by around 2.5 million, yet a great deal of that was in the public sector and more than half was accounted for by non-UK nationals. This is not an immigration debate and I am not trying to make that point, except to register the huge challenge we face in driving the welfare system to help put people back to work.

The shift is now about moving from handouts being at the centre of the welfare system to putting work first. I know that we could look over the previous Government’s time in office and say that they continually grew the welfare state—it is a fact; it happened—and I suggest that they did so with entirely the right intentions, but it has led to this generational and cultural issue. I think that we can alter this cultural perception so that working becomes something to aspire to, rather than the exception in many families.

In that context, I should like to address one or two of the concerns that have been raised, starting with the question of managing money and monthly payments. This is about a practical need. If someone who is unemployed goes straight into a job, there is a strong chance that they will end up getting paid on a monthly basis, and not many employers will give a new employee an advance.

[Dr Whiteford]

The hon. Gentleman will be aware that many people who work in part-time jobs, particularly women, are still paid on a weekly basis. That is not unusual among lower-paid workers.

[Nick de Bois]

That is why I chose my words carefully. Many people will be paid in that way. However, in this debate we risk letting the whole programme be driven by a group of individuals, be it those that the hon. Lady mentioned or those who are unfamiliar with computers, who may be in the minority but are none the less significant. That is not the right approach. I would turn the telescope round and look the other way, and help those groups to aspire to have control over their money on a monthly basis or to become computer-literate. That is the difference in emphasis that I would suggest. I see the hon. Lady shrug and sigh, but I offer those comments in the spirit of our all wanting to improve the quality of people’s lives and their opportunities to move forward.

Managing money is also about individual responsibility. We have seen an attitude building up whereby people are almost saying, “The state will look after me and the state will do this for me.” We cannot accept that any more; it is wrong. It does not encourage the right motivation to take responsibility for our lives, when we can. There must be a practical and moral drive to increase personal self-sufficiency.

The argument about computers is valid, particularly where broadband issues arise. I am pleased that Ministers have recognised the problem and will try to provide access to computers to overcome it. We have talked in terms of percentages. There are about 3,500 jobseeker’s allowance claimants in my constituency; I am pleased to say that the number is slightly diminishing. We should not call into question the proposed universal credit merely because 700 of those people may not be able to get access to or use a computer. If 2,800 people can do it, we should work harder to help the other 700 to achieve it. Perhaps that is, again, another way of looking at the problem.

Like others, I am very cautious about IT systems. When I worked in my own company, we used to plan for a bill of £20,000 and it often came in a lot higher and with few of the results that we needed. That is a fact of life. It is daunting to see some of the Government projects that have gone wrong in the past, so I applaud the approach that this Government are taking, and I think that the House rightly gives it credit. This computer system is not going to be launched with a big bang on day one; it is being trialled and done in stages, and that is correct. To be fair, we should give credit to the Secretary of State and his team for learning from the lessons of the past in trying to drive good value. I wish him well in his task, as I am sure that the whole House does. I note that Labour Members have some concerns about this, but from the perspective of the overall goal, they are manageable.