Universal Credit

Ruth George Excerpts

Wednesday 17th October 2018 Commons Chamber

[Mr Mark Harper (Forest of Dean) (Con)]

I want to start my remarks by noting the presence of my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), whose decision to drive through this policy was very far-sighted. He was motivated by a desire to make the benefit system fundamentally focus on enabling people to get into work and to make sure that work pays. I think that is incredibly important, and I will say more about that later in my remarks.

I suspect that many of the Members who will speak in the debate will compare the situation under universal credit with some mythical universe of perfection where there are no problems. I was first elected to the House in 2005, in the aftermath of the introduction of tax credits. They had been introduced with a big bang, which was a disaster. Nearly half the recipients were paid the wrong amount of money—nearly £2,000,000,000 was paid in error. I had constituents who had been reassured over and over again that the money was theirs to spend, but then Her Majesty’s Revenue and Customs came to take it away. I had constituents in tears at my surgery. Let us not pretend that the legacy benefit system is perfect, because that is not what we are comparing universal credit with; we are comparing it with a legacy benefit system that is flawed and needs to be improved.

[Ruth George (High Peak) (Lab)]

Does the right hon. Gentleman not agree that the problems with tax credit overpayments resulted from a low excess income level, which was then raised by the Labour Government to £5,000 a year, meaning that we did not get overpayments? The previous Government reduced it back to £1,000, so we are again seeing overpayments because people earn more. That is the problem: we had a Government that did listen and learn, and now we have one that will not.

[Mr Harper]

I was in the House at the time, and I am afraid that the Government were pushed into action and threw huge amounts of taxpayers’ money around in a way that did not target the problem.

--- Later in debate ---

[Paul Masterton (East Renfrewshire) (Con)]

There are currently about 330 claimants of universal credit in East Renfrewshire. We moved to full service last month and there are about 5,200 people on legacy benefits who will be migrated to it in the coming months and years. There is no doubt that the phased roll-out has identified a number of issues which need to be addressed. My hon. Friend the Member for Amber Valley (Nigel Mills) set out very well why the Government were right to proceed cautiously through test and learn. I start by paying huge tribute to the work of the team at Barrhead jobcentre, whom the Secretary of State visited over the summer. They really are changing people’s lives for the better, and we in this House cannot pay testament to the frontline staff in jobcentres enough.

The principles that underpin universal credit were well set out by my right hon. Friend the Member for Witham (Priti Patel) and it is very easy to see why they have carried near-universal support. One of the reasons was that under the old system, as we have heard today, people who wanted more work would be penalised for doing so, which was a completely ridiculous situation.

One group who have not been mentioned today but who will benefit from universal credit are injured veterans. Under existing legacy benefits, those in receipt of such benefits, as well as payments through the war disablement pension or the armed forces compensation scheme, receive a statutory £10 disregard, but under UC, unearned income such as these benefits is completely ignored. There are 12,000 veterans across Scotland—120 are in East Renfrewshire—who receive compensation because of their injuries, and they will be better off under universal credit. That is something we should all welcome.

Other Members have set out the improvements that were made to universal credit last year, particularly in the Budget. Those have gone a long way to helping things. Coupled with the recent introduction of the two week run-on of housing benefit, this will help to safeguard those migrating from housing benefit to UC from rent arrears.

Despite these improvements, further progress is still required. In the lead-up to the Budget, the Government should now reinstate work allowances for single-parent families and second earners in families with children back to the level they were before the 2015 Budget, because the changes to those groups undermined the fundamental purpose of universal credit—to make work pay. This would provide targeted support to 9.6 million low-income families, like many in my constituency, and it would be the best way to ensure that UC is truly transformative, as it was always intended to be.

[Ruth George]

There never were any work allowances for second earners in couple households. Is the hon. Gentleman proposing that a new allowance should be introduced, which I am sure Opposition Members would absolutely support because of the high marginal tax rates on such families?

[Paul Masterton]

I was mainly talking about single-parent families, but I know of the work that the hon. Lady has done. We have both had discussions with the Joseph Rowntree Foundation—I think we sat around a table together when we were talking about some of its Budget asks—and I warmly welcome the work that it does and support a lot of its asks in advance of the Budget.

As MPs, we always see the worst of a system—nobody comes to our surgeries or pops into our offices to say how wonderful things are, how easy their application process was or how great it is—and those cases are frustrating and maddening, and we do our job to fix them. However, we also need to take account of the many, many people for whom this has worked. I am very pleased to be hosting a UC information event later this month, working with the citizens advice bureau, the jobcentre, my local credit unions and my local housing associations. I want people to know that they can come to me if they have a problem and that they can sit on the day and get help with their application. If they are having an issue, we will have lines set up directly to the DWP hotline and the HMRC hotline so that when people come—on Friday 26 October—to the Voluntary Action on Kelburn Street in Barrhead, they know that they have an MP whom they can come to for support if it is not working.

UC is a good benefit. It is the right thing to do. To scrap it and to go back to a system that traps people on welfare would be a mistake.

--- Later in debate ---

[Mike Amesbury]

That is a dreadful and, obviously, very sensitive case. I am sure the Secretary of State and the Minister for Employment will take up that individual case, which demonstrates some of the failings of UC.

My hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) referred to the explosion in casework in her constituency as a result of the universal credit roll-out. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) referred to a lack of money among his constituents and debt problems associated with food banks. My hon. Friend the Member for Wallasey (Ms Eagle) referred to the 34% increase in food bank use as UC was rolled out in her constituency. The hon. Member for Plymouth, Moor View (Johnny Mercer) highlighted concerns about cuts to the in-work allowances, but of course Conservative Members voted for those cuts. My hon. Friend the Member for Garston and Halewood (Maria Eagle) spoke about the chaos for her constituents, particularly with the administration of UC. The list goes on and on.

[Ruth George]

Will my hon. Friend give way?

[Mike Amesbury]

I must make some progress.

In among this procedure—the passion and politics of today’s debate—let us not forget that for millions of people universal credit is more than just a policy; it is a daily reality. That reality is insecurity. It is fear, hunger and, all too often, homelessness. Despite our political differences, I cannot believe that Members came into this House expecting to or wanting to back a policy that is causing such horrors to increase. I know that I did not and I can tell from the genuine contributions of so many Members in the House today that neither did they. So I say to the Secretary of State: she has heard the stories, she knows the risks of continuing along this road and she must recognise that, when even the architect of universal credit, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), says that the system is £2 billion short and this is what is needed, it is time to think again and probably add a few billion more.

The universal credit journey has not just been a bumpy ride; it has been crash after crash. It is a journey that is rapidly running out of road, with a driver, Captain Chaos, who thinks that dropping down a gear at the last minute will prevent catastrophe. The only thing that can halt this is putting the brake on. We need to stop, radically reform and fix this policy before it is too late. Indeed, the policy may well already be beyond fixing. It is certainly already too late for many of the constituents in my patch and beyond. The Government and the Secretary of State have a choice: they can carry on as they are and preside over another poll tax, or they can listen to the unprecedented number of voices from across civil society telling them to stop and think again. Sir John Major believes that universal credit is

“operationally messy, socially unfair and unforgiving”.

That assessment is shared by expert after expert, and by thousands who are affected by the policy. Delays and tweaks will not solve this. It is time to stop, fund and fix it.