The Secretary of State’s Handling of Universal Credit

Ruth George Excerpts

Wednesday 11th July 2018 Commons Chamber

[Margaret Greenwood]

My right hon. Friend raises such an important point. I was as shocked as he was to hear the Secretary of State say that it was when she had left the Chamber that she realised her mistake. She should have replied that afternoon. He is quite right on that point.

The Secretary of State adopted the same approach at Work and Pensions questions, as has been noted, leading the head of the National Audit Office, Sir Amyas Morse, to take the extraordinary step of writing an open letter to her, taking issue with a number of claims that she had made in response to the report. The three key claims that he took issue with were, first, that the NAO report said that the roll-out of universal credit should be speeded up; secondly, that the report

“didn’t take account of changes made by the government in the Budget”;

and, thirdly, that universal credit is working.

Let us just think about the significance of this. The National Audit Office is an independent body that scrutinises public spending before Parliament. It is responsible for auditing central Government Departments. Its reports matter. I shall take each claim in turn.

On 21 June, the Secretary of State stated on several occasions that the report had said that the Government should speed up the roll-out of universal credit. She repeated that claim at Work and Pensions oral questions on 2 July, when questioned by my right hon. Friend the Member for Delyn (David Hanson) and me. Of course, the NAO report does not say anywhere that the roll-out should be speeded up. In fact, it says very clearly that the Government should

“ensure the programme does not expand before business-as-usual operations can cope with higher claimant volumes.”

[Ruth George (High Peak) (Lab)]

This is an incredibly important point. Does my hon. Friend agree that, as we are seeing 100,000 households rolling on to universal credit this year and 200,000 next year, with 40% in hardship, we are talking about millions of real people, real families, whose lives are being affected by the speed of this roll-out?

[Margaret Greenwood]

My hon. Friend is absolutely right. This is an issue of the utmost importance and the Government must take note.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

Universal credit was a good idea, but the problems we are seeing in our constituencies are very significant. The Trussell Trust told us in its briefing for this debate that when universal credit is fully rolled out in an area, demand for food banks in that area goes up by 52% in the following year compared with 13% in areas where universal credit has not been fully rolled out. I noticed that the National Audit Office looked specifically at what the Trussell Trust said about demand for food banks where universal credit has been fully rolled out. The NAO states that its analysis

“aligns with the Trussell Trust’s.”

Indeed, the Department’s own analysis—the survey that the Secretary of State referred to, which was published last month—makes the point, as the hon. Member for Airdrie and Shotts (Neil Gray) has told the House already, that four out of 10 claimants in both the survey’s waves that were looked at were experiencing difficulties keeping up with bills. That is a much higher proportion of people facing hardship than has been the case with the previous system.

Why is universal credit causing much greater hardship than the previous system? Above all, it is for the very straightforward reason that people have to wait for five weeks before they are entitled to anything other than a loan once they have applied. A lot of people—I think we can all understand why—struggle to survive during those weeks. The theory was this: someone who has just left their job has a month’s salary in the bank that will see them through for a month; and after the usual waiting days, their money will start to come in. But a very large number of people do not have a month’s salary in the bank. There are a lot of good reasons why that is the case, but the most obvious is that people are often paid weekly. A very large number of people are paid weekly, but Ministers—I asked the former Secretary of State about this some years ago—have never had an answer to how those people are supposed to survive. I am grateful that the Secretary of State has told the House that she is listening and that she wants to work cross-party to fix these problems, and I very much welcome the fact that last October the delay was reduced from six weeks to five, but a gap of five weeks is asking too much of people who very often have virtually nothing in the bank when they make their claim.

[Ruth George]

Ministers have been saying that the advance payments solve the problem of the long wait, but the evidence we are getting from the Trussell Trust, among others, is that the high rates of repayment of those advances mean that they do not solve anything, but just prolong the debt that people are in.

[Stephen Timms]

My hon. Friend is absolutely right. If people are forced to depend on an advance right at the beginning of their claim, they are by definition plunged into debt right at the start. I am pleased that the Secretary of State has I think told us today, in response to my right hon. Friend the Member for Birkenhead (Frank Field), that she will look at the repayment periods and, hopefully, offer a less demanding repayment schedule than is the case at the moment. However, just plunging people into debt at the beginning of a claim is a very serious problem.

The Trussell Trust, which I have referred to, said that we should pause the roll-out of universal credit to fix the problems. My hon. Friend the Member for Wirral West (Margaret Greenwood) made that plea from the Opposition Front Bench, as she has done repeatedly and rightly. The Secretary of State can perhaps discount those representations, but she should weigh carefully what the National Audit Office said, to which attention has already been drawn today. Its report said that the Government should

“ensure the programme does not expand before business-as-usual operations can cope with higher claimant volumes.”

I very much hope that the Secretary of State and her fellow Ministers will weigh that cautionary note very carefully indeed.

--- Later in debate ---

[Ruth George (High Peak) (Lab)]

I hope that everyone on both sides of the House would agree that a Secretary of State with responsibility to all the people of this country should at the very least be listening to the NAO’s advice, to the evidence from the Department’s widespread survey and to the mountains of evidence from third parties of overwhelming hardship and suffering under UC. The DWP’s own survey showed that 40% of claimants were in hardship after nine months on UC, including more than half of disabled claimants, so it is hard to the disagree with the NAO, which said that the DWP has not shown a

“commitment to listening and responding to the hardship faced by claimants.”

The head of the NAO said:

“Maybe a change of mindset will follow the publication of the claimant survey”.

Unfortunately, so far, in the Secretary of State’s statement and DWP questions last week, we have not seen that change of heart, but I hope that, in the spirit in which she has responded today, we will start to see some listening and some learning.

A false claim about the speed of the roll-out was made not once but multiple times. When I asked the then Parliamentary Under-Secretary of State, the hon. Member for North West Hampshire (Kit Malthouse), about the level of hardship among those on universal credit, I was told that

“the close and constructive relationship between work coaches and their clients should enable them as a team to get through any hardship that arises.”—[Official Report, 2 July 2018; Vol. 644, c. 10.]

That shows a staggering lack of listening among Ministers to what is going on in the evidence before them. As work coaches are due to see their claimant numbers increase from 85 clients per work coach to 373 clients per work coach, it will be impossible for them to have any sort of close relationship. We need a system that works.

The Secretary of State told the Select Committee this morning that she wants to listen to claimants’ experiences and to learn and said that the most disabled people will be better off under universal credit. I look forward to both those eventualities. Before coming to the House, I worked to support people on tax credits and universal credit. I set up the all-party group on universal credit to work across party lines to make the changes that are needed to really support people who can work and those who cannot. I look forward to working with the Secretary of State and the DWP team to make sure that we see those changes happen before universal credit is rolled out to 10 million adults and half of all children.