Universal Credit and Debt

Peter Aldous Excerpts
Wednesday 5th June 2019

(4 years, 9 months ago)

Westminster Hall
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Peter Aldous Portrait Peter Aldous (Waveney) (Con)
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I hope that as I am the only speaker from the Government side, you might show me a little leniency, Sir Henry, but anyway, it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for High Peak (Ruth George) on securing the debate.

The full roll-out of universal credit in Lowestoft started in May 2016. The process has not been straightforward. Many of the most vulnerable in society have been put under enormous pressure and have faced real challenges in getting by day to day. The situation has improved: the Government have listened and introduced changes. However, much more needs to be done if universal credit is to achieve its goals of transforming people’s lives in a positive way; encouraging and supporting them into work; and simplifying the welfare system.

I sense that at the outset, the sheer scale of the task of introducing universal credit was not recognised. It is a mammoth task that requires a complete change of mindset by everyone involved and the implementation of an enormous IT project. Some of the assumptions on which universal credit was based have been shown to be idealistic and could not be implemented in a fair way in the real world.

Jobcentres, citizens advice bureaux and councils have stepped up to the plate and really worked hard to get the new system working fairly and properly. As I said, the Government have been listening, and have introduced changes to improve the roll-out. They are right to adopt the test and learn approach, but more needs to be done to ensure that debt, which burdens people, causing distress and worry, does not unnecessarily build up. I shall quickly highlight five areas in which action is required to alleviate the albatross of arrears.

First, serious consideration needs to be given to abolishing the five-week wait for universal credit. The think-tank Bright Blue has concluded that the initial waiting period is a design feature that is inherently flawed. Secondly, the feedback that I am receiving from constituents is that the lack of transitional protection for former recipients of the severe disability premium is pushing claimants into debt. The Government need to get on with addressing that.

Thirdly, universal credit needs to be adapted to address the needs of those on zero-hours contracts. Quite often, such work is heavily affected by the weather, and during lull periods, in which people claim universal credit, the delay in payments leads to an inescapable spiral of debt, which is never paid off from one season to another.

Fourthly, there is compelling evidence from organisations supporting those facing domestic violence that the single payment arrangements are putting the victims of domestic violence at added risk, with perpetrators having universal credit payments paid into their own bank accounts. That means that they can use the money as a tool for coercive control. To address that, universal credit payments should be separate by default.

Finally, East Suffolk Citizens Advice has advised me that the Department for Work and Pensions does not provide it with feedback when it makes a request for assistance with the journal of a client whom it is supporting. I appreciate that there are data protection requirements, but that issue needs to be fully addressed if universal support is to be fully effective.

I commend both the Minister and the relatively new Secretary of State—I hope that she stays in her post—for listening and responding. I acknowledge that theirs is a difficult task, but I urge them to take on board the further feedback from this debate. For the sake of the vulnerable people who rely on universal credit, we must get it right.