Universal Credit

John Bercow Excerpts

Tuesday 10th December 2013 Commons Chamber

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

This is a major and challenging reform which will transform the welfare state in Britain for the better, ultimately accounting for some £70 billion of benefit spending each year, with 3 million people better off.

Rightly for a programme of this scale, the Government’s priority has been, and continues to be, its safe and secure delivery. This has been demonstrated throughout our approach to date, which started with the successful launch of the pathfinder in April 2013 and has continued with the controlled expansion of universal credit, starting as planned in October 2013 and running through to spring 2014. What is more, we are already pushing ahead with the cultural and business change required as part of universal credit. We are retraining 25,000 Jobcentre Plus advisers while implementing digital jobcentres and rolling out the new claimant commitment, which is now on track to be in place in half of all jobcentres by the end of the year, and across the country by the spring.

Yesterday I announced and discussed at length with the Work and Pensions Committee our plans for the next stage of implementing universal credit, following my Department’s work over recent months with the Government Digital Service to assess delivery options. That work has explored the use of the latest digital technologies and assessed the utility of the work we have done to date—[Interruption.]

[Mr Speaker]

Order. The Secretary of State is well able to make himself heard, and he is doing so, but it is frankly discourteous, when he is giving a statement to the House, for it to be peppered with constant heckling. Members will have the chance to question the right hon. Gentleman, but please do him the courtesy of hearing what he has to say.

[Mr Duncan Smith]

The conclusions of this work were set out yesterday. First, as part of the wider transformation in developing digital services, the Department will further develop the work started by the GDS to test and implement an enhanced digital service. This will be capable of delivering the full scope of universal credit and make provision for all claimant types.

Meanwhile, we will expand our current service and develop functionality so that from next summer we progressively start to take claims for universal credit from couples and, in the autumn, from families. Once safely tested in the 10 live universal credit areas, we will expand the roll-out to cover the north-west of England. This will enable us to learn from the live running of universal credit at scale and for more claimant types, including the more vulnerable and the more complex, while extending to more people the positive benefits of universal credit.

It is important to note that the information that we are getting back from the pathfinder tells that 90%—I stress, 90%—of people are claiming universal credit online and that 78% are confident about their ability to budget with monthly payments. It also tells us— [Interruption.] I know that Labour Members do not want to hear about this, because they have been wrong on welfare reform from day one. The majority of people who are on the programme tell us that it pays to work, with 65% to 70% reporting that universal credit offers better work incentives than jobseeker’s allowance and is less complex—upheld by the 65% who agreed that it was easier to understand their obligations as a result.

As we progress with the future delivery of this flagship programme, we will continue the same careful approach—test, learn, implement—as it is rolled out through the regions. On this basis—[Interruption.] Actually, I am going to pick this point up. The shadow Chancellor is sitting on the Opposition Front Bench. I will tell you, Mr Speaker, what we will not do: we will not take any lessons from the party that rolled out tax credits early. It rushed the delivery of tax credits, which cost £5 billion immediately and 400,000 people suffered directly as a result.

Once we have closed down the new claims, we will test, learn and implement—unlike Labour when it rolled out its information technology programmes. The new claims to the legacy benefits that universal credit replaced have been closed down, with the vast majority of the remaining legacy case load moving to universal credit during 2016 and into 2017. Final decisions on these elements of the programme will be informed by the development of the enhanced digital solution.

[Mr Duncan Smith]

Let me deal with a couple of the points raised by the hon. Lady. I said all along, and I repeat, that this programme essentially is going to be on time. By 2017, some 6.5 million people will be on the programme, receiving the benefits.

Let me deal with the hon. Lady’s comments about what is written down and what is written off. For somebody who was supposed to have been working for the Bank at one point, she does not seem to know the difference between equipment of no use that is being written off and equipment—this is the case in any company over a period of time—that is written down each year. That is exactly right. If she drives a motor car, I wonder whether she has noticed that, over a period of years, its value actually depreciates. Perhaps she has not; perhaps she is still trying to sell the car for the same value she bought it for.

The reality is very simple. Let us take the legacy systems right now. The legacy computer systems that are working were written down years ago, but they are still delivering value to the Government by delivering benefits. Maybe the hon. Lady needs a teach-in about the difference between written-off equipment and written-down equipment.

I want to deal with one other point that is quite clear and is the reality. We have been clear—[Interruption.]

[Mr Speaker]

Order. Mr Irranca-Davies, you have a beautiful voice, with very mellifluous tones. One disadvantage for you is that when it is loud, I can very easily hear it—some miles off, I think. We need to hear a bit less of it for the time being.

[Mr Duncan Smith]

We do not take any lessons from the Opposition about computer failure: the tax credit system crashed, the health system crashed and they lost billions and billions of pounds while the shadow Chancellor was at the right hand of the then Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown).

I might also say that although the Opposition have asked an urgent question on universal credit today, the truth is that they are themselves in denial about the legacy of welfare failure they left us. Welfare spending increased by 60% in real terms under the previous Government—£3,000 a year for every household in Britain. More than £170 billion was spent on tax credits alone. There were 5 million on out-of-work benefits, and nearly a quarter of working-age people were economically inactive.

This Government have already saved £11 billion on the welfare bill, £48 billion over this Parliament. The Office for Budget Responsibility has confirmed that welfare bills will fall in real terms to below the level at which we received them. Employment is up by more than 1 million. More households are now in work than ever before, with the lowest proportion of children living in workless households since records began. Child poverty is at its lowest level since the 1990s, and pensioner poverty is at its lowest for almost 30 years.

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[Mr Duncan Smith]

The funny thing about the Opposition is that they do not know what they want. They say that they support universal credit—[Interruption.]

[Mr Speaker]

Order. I know that there are strong views on this matter, but the House must calm down. Courtesy is necessary on both sides. Let us hear the Secretary of State.

[Mr Duncan Smith]

Do the Opposition want us to rush out universal credit, as they did with tax credits, or do they want us to take our time to implement it correctly? The reason we are not moving the support group and the work-related activity group on from employment and support allowance is that they are very vulnerable. We want to take our time so that those who are on those benefits are brought on to universal credit carefully. It seems that the hon. Lady’s party wants to rush those people on as fast as possible, rather like what it did with tax credits.

[Robert Halfon (Harlow) (Con)]

Is it not the case that under the last Government, 1.4 million people spent—[Interruption.]

[Mr Speaker]

Order. The hon. Gentleman is asking a question. Mr Leslie, you are chuntering extremely noisily from a sedentary position. You might be purporting to help the Secretary of State, but I do not think that he feels any need of your help and, at this stage, neither do I.

[Robert Halfon]

Is it not the case that under the last Government, 1.4 million people spent a decade out of work on benefits and 2.6 million people spent five years out of work on benefits? Is it not also the case that universal credit will get people out of dependency and back into work, that it will eliminate the poverty trap, and that 90% of people on benefits will be on universal credit by the end of 2016?

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[Mr Duncan Smith]

My hon. Friend is right. The problem is that the hon. Lady went touring around all the studios, also saying that we would be writing off hundreds of millions of pounds. She is wrong on that. I see she has dropped that today, but the point is that the Opposition have nothing to say about this, so they want to pick away at a plan which, apparently, they support. [Interruption.] When you support something, you support it. They actually oppose it. [Interruption.]

[Mr Speaker]

Order. Mr Robertson, your voice is substantially louder than that of your hon. Friend the Member for Ogmore (Huw Irranca-Davies). I do not wish to be unkind, but it is not always quite as mellifluous.

[Mrs Anne McGuire (Stirling) (Lab)]

On 11 September 2012, the Secretary of State said:

“For what it is worth, I take absolute, direct and close interest in every single part of the IT development.”—[Official Report, 11 September 2012; Vol. 550, c. 154.]

He said he held meetings and briefings, and worked on it at weekends from his box. He also said,

“we are testing stuff”—

I think that is a technical term—

“pretty much the whole time.”—[Official Report, 11 September 2012; Vol. 550, c. 157.]

Given that 15 months ago he was taking such a personal interest in that, why is he still in his job and facing this shambles today?

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[Several hon. Members]

rose—

[Mr Speaker]

Order. We must move on.