Universal Credit

Richard Graham Excerpts

Wednesday 19th April 2017 Westminster Hall

[Richard Graham (Gloucester) (Con)]

I want to speak today to try to balance the picture of doom and gloom that some Members have painted about not just universal credit but the entire welfare system and indeed all the welfare reforms of the past seven years.

In early 2009, I received an extremely emotional letter from a constituent who had tried to do the right thing by going back to work. However, she immediately found that by working more than 16 hours a week she was in fact far worse off. She asked me how that could be—why did welfare policy trap her and not help her? I promised then that I would work as hard as I could for a system where work always pays.

When I hear the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) saying that people working through universal credit are only 37p in the pound better off net of reduced benefits, rather than the 45p in the pound that was originally intended, I want to remind her that that same person was not only nought pence better off per pound under the previous Labour system but was significantly worse off as a result of being unable to keep any of the money she was earning and losing significantly as a result of the benefits lost. So universal credit delivers on the “work always pays” approach and I hope that we will never go back to a system where work does not pay.

Equally, when other Members complain about the delayed roll-out of universal credit, I remind them how disastrous the “big bang” approach of the roll-out of tax credits only a decade ago actually was. The gradual process of rolling out universal credit is infinitely preferable.

Let me also give some reassurance to the hon. Member for Strangford (Jim Shannon), who is not currently in his place. He is awaiting the arrival of universal credit, but it is good news for his constituents and, when it arrives in his constituency, he should go and see the people on it, as I have done in my constituency of Gloucester, and hear from them what their own experience is. In fact, earlier today I spoke to the Jobcentre Plus in Gloucester. Its staff are broadly very positive about universal credit. We now have 720 people on it, of whom roughly 220 are working. Many of the others are on training courses, including for things such as forklifts. That is broadly good news, but that does not mean that everything is perfect.

The Work and Pensions Committee started an investigation into universal credit only a few weeks ago. I am afraid we will be unable to finish it before Parliament is prorogued, but it has flagged up two issues that others Members have alluded to and which I hope the Minister will touch on in due course. The first is the delay in payments to individuals, and the second is the inability of some who are claiming universal credit to manage their finances adequately so that they do not get into arrears on their rent payments. Both are real issues. There is a case for saying that some housing associations need to engage with their tenants more effectively than they have in the past. Guaranteed payments are an extremely easy business for any landlord; none the less, there are problems, and most jobcentres and housing associations will confirm that.

In conclusion, universal credit is happening. The slow and arguably delayed roll-out is a good thing in terms of allowing for the problems that occur with any big system to be rectified early, before the system goes nationwide. It is coming on faster now, and there are two specific areas where the Department will need to look closely at whether improvements can be made.