Universal Credit Roll-out

Stephen Lloyd Excerpts

Wednesday 18th October 2017 Commons Chamber

[Angela Crawley (Lanark and Hamilton East) (SNP)]

rose—

[Stephen Lloyd (Eastbourne) (LD)]

rose—

[Mr Duncan Smith]

I apologise, but I am about to conclude.

Universal credit is the single biggest change to the welfare system. Those who care about it know that it is capable of dramatically changing lives for the better. My party should be proud of it. I will therefore not support the motion because it intends to stop the roll-out and damage universal credit for short-term political reasons. We should resist that, ask the Secretary of State to make the changes, but not stall the roll-out because universal credit changes lives and delivers an improved quality of life to thousands of people.

--- Later in debate ---

[Heidi Allen (South Cambridgeshire) (Con)]

I am fortunate to have served on the Work and Pensions Committee since my election in 2015, and that has given me a really detailed understanding of universal credit. To reiterate my question to the Prime Minister last week, I believe that universal credit will be the most significant positive transformation of the benefit system in decades. The principles of universal credit are different and the support provided by work coaches is different, but that must not detract from the concerns that I and many Members from across the House have with the design of universal credit. I am disappointed that the Government did not pause the roll-out of this service while some of the system build flaws are resolved, but the Secretary of State has already given the commencement order, and that moment has passed. There is, however, another one-month roll-out delay in January, so all eyes will be on that.

I want to focus my efforts now on convincing Ministers that there are easy and relatively inexpensive ways of improving the design. I wish to put on record my thanks to the Prime Minister for meeting me and colleagues yesterday afternoon to hear our proposals. We were joined by the Secretary of State, and I am positive that we were genuinely listened to and that there was a shared determination to make improvements.

The biggest single criticism of universal credit is the time it takes for people to receive their first payment. Although I appreciate the announcement that advance payments will be made available to all, it is clear to me that, as the number of people requesting these is already rising, it must mean that the inbuilt six-week wait does not work. If we want universal credit really to replicate the world of work, payments must be built around a four-week cycle. Removing the initial seven-day wait must be the very least we can do. At a minimal sum of £150 million to £200 million a year, this would be an inexpensive fix that would benefit all claimants.

Rather than developing another system to prop up a flawed system, let us stop convincing ourselves that advance payments are the answer. Of course there will always be vulnerable claimants who will need financial support today, and, for them, advance payments have an important role, but if, today, more than 50% of claimants have taken up an advance payment—that is before the Secretary of State has said he will advertise them more widely—we must accept that there is a reason that that percentage is so high. Let us stop administering and paying out advance payments hand over fist and reduce the default waiting time for all awards to fortnightly payments at two and four weeks from the moment of a claim. Let us keep paying fortnightly until the work coach and claimant together decide that being paid monthly is okay, and let housing payments go direct to landlords. That would dramatically reduce the number of families going into rent arrears, turning to food banks and spiralling further into debt.

Having discussed this personally with the Prime Minister—I would appreciate another 20 seconds if somebody could give me some time, please. Will anybody intervene? No.

[Stephen Lloyd]

rose—

[Heidi Allen]

I give way to the hon. Gentleman.

[Stephen Lloyd]

I thank the hon. Lady for giving way. I concur with a lot of what she is saying. Like many Members on both sides of the House, does she agree that the principle of universal credit can work if those two or three key changes are made? Without those changes, it will collapse.

[Heidi Allen]

I appreciate the hon. Gentleman’s intervention. I agree that we risk undermining the success of the system if we do not get these basic things right.

Having discussed this matter personally with the Prime Minister yesterday, it is probably too ambitious to expect a response just yet, but I am confident that she will consider our proposals. Why? Because as well as being the smart thing to do, it is the compassionate thing to do.

Two years ago, almost to the day, I made my maiden speech:

“a country and its economy does not function…if the people who run the engine cannot afford to operate it. We need every teaching assistant, care worker, cleaner and shop worker”—[Official Report, 20 October 2015; Vol. 600, c. 874.]

to secure our economic future. With Brexit looming, the call could not be more clarion than it was when I said it two years ago. To pull ourselves out of debt, we should not be forcing working families into it.

--- Later in debate ---

[Stephen Lloyd (Eastbourne) (LD)]

This has been an important and interesting debate on an important issue, and I thank the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) for bringing it to the House. I have been listening to speeches from both sides of the House for hours, and people from both sides have been constructive in their comments. Like many, I believe that universal credit could be a tremendous benefit—I supported it years ago—but unless the Government fix some remaining issues, it will fail.

First, I was disappointed that the then Chancellor took £3 billion from the universal credit budget shortly after the 2015 general election, meaning that work does not pay anymore. It may pay a tiny bit, but the original concept was that work really would pay. I urge the Secretary of State and the Government to put that money back into universal credit.

Secondly, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), a former Secretary of State, said that the Joseph Rowntree Foundation has supported universal credit. I was a bit surprised by that, so I did a quick check. The JRF actually said that it would support universal credit if it was properly funded—I just mentioned the £3 billion—and if payment and waiting times were reduced, which is exactly what many people have been saying today.

I have one final point to make in the limited time available to me. We have been discussing housing associations and housing benefit, but it is the private rented sector where there will be a car crash unless payments are made directly to landlords. Owing to the nature of their business models, private sector landlords will not wait two, three or four months for their tenants’ money to be paid. I urge the Government to fix those issues.