Universal Credit Fraud

Stephen Timms Excerpts

Wednesday 10th July 2019 Commons Chamber

[Justin Tomlinson]

On the specifics of the meetings, I will have to write to provide a full answer. However, we are seeing that the cases that are being reported are clustered around particular areas, so there is a real focus in those areas on raising awareness and on targeting often very sophisticated criminal activity. As we bring forward prosecutions, we are finding that that is making a significant difference as a proactive deterrent, and rightly so.

[Stephen Timms (East Ham) (Lab)]

Ministers have made one monumental misjudgment after another with universal credit. The five-week delay is forcing people into debt and dependency on food banks, and now we learn that it has opened up a bonanza for crooks and fraudsters. Will the Minister now urgently review the catastrophic five-week delay policy?

[Justin Tomlinson]

As is very clear, any claimant can access financial support from day one where it is needed. We will continue to do all that we can to ensure that everybody benefits from the personal, tailored approach that universal credit offers, which is an integral part of how we are helping to deliver record employment across all regions of this country.

Inequality and Social Mobility

Stephen Timms Excerpts

Wednesday 12th June 2019 Commons Chamber

[Amber Rudd]

If Members will forgive me, I shall make some progress, and then I will take some more interventions.

Let me talk for a moment about the Government’s record. The hon. Member for Wirral West (Margaret Greenwood) went on at some length about that, so let me make some points to her in reply. I will begin with our record on employment. We have helped more than 3.6 million people to enter work; we have reduced unemployment to its lowest level since the 1970s; we have supported nearly 1 million more disabled people into work, and women’s employment is now at record levels.

Those jobs are not just in London or the south-east; more than 60% of the employment growth since 2010 has taken place in other parts of the UK. Nor—I can already hear the suggestions coming at me from the Opposition Front Bench—are they just part-time and temporary jobs. The jobs that make up this increase are overwhelmingly full-time, permanent roles, giving people the dignity and security of a regular pay packet. Behind every employment statistic is a person or family whose mental health, wellbeing and life chances are improved by participation in the workforce. This increased employment means that 660,000 fewer children are growing up in workless households, which makes them less likely to grow up in poverty.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State will know that the number of food parcels distributed by Trussell Trust food banks increased by 19% last year. Does she recognise the close link between the growth of that problem and the roll-out, with its current flaws, of universal credit?

[Amber Rudd]

I know that the right hon. Gentleman has been very engaged in this subject. He will be aware that there are many reasons why people turn to food banks. There were some issues with the early roll-out of universal credit in terms of the timeliness of the payment. That has been corrected, and between 85% and 87% of recipients are now paid on time, which compares favourably with the previous legacy system.

Let me now talk for a few minutes about income inequality. Since coming to office, we have lifted 400,000 people out of absolute poverty. Another key fact that I can give in response to the Opposition motion is that household income inequality is lower now than it was in 2010. However, that is not enough for us; we need to build and do better.

Our safety net is one of the strongest in the world. We deliver the fourth most generous level of welfare support in the OECD. In this financial year, total welfare spending will be more than £220 billion[Official Report, 15 July 2019, Vol. 663, c. 5MC.]. As has been acknowledged by the Institute for Fiscal Studies, thanks to the benefits system, overall income inequality has remained stable, even as earnings have increased for the most well paid. That is because we have what the IFS has described as a highly redistributive tax and welfare system. We have deliberately taken action, through the tax system, to ensure that income inequality is reduced.

Supporting Disabled People to Work

Stephen Timms Excerpts

Thursday 28th March 2019 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

The disability employment gap fell steadily in the years up to 2010. It has since got stuck at a level just above 30%. David Cameron, in the 2015 election campaign, promised to halve it by 2020, a pledge that was quickly abandoned after the 2015 election. What does the Minister now believe will happen to the disability employment gap over the next five years?

[Justin Tomlinson]

The right hon. Gentleman is one of the most constructive and proactive Members of the Opposition pushing on this very important area. When we came to office, disability employment stood at 44.1%. It has now gone to 51.5%. That is up 7.4%, with the gap closing by 3.6%. I expect that trend to continue over the next five years.

Households Below Average Income Statistics

Stephen Timms Excerpts

Thursday 28th March 2019 Commons Chamber

[Amber Rudd]

It is because I have acknowledged that these figures are disappointing and because I want to address this that I have come here to set out what we are doing, what we have already done, and what are going to be the important changes to make to the welfare system to ensure that we do address it. I am committed to making sure that we reduce poverty, and I will be putting in place the levers whereby we can do so. However, these figures are now nearly two years out of date. I have made sure that we are starting immediately to invest the money that the Chancellor put aside for us—£1.7 billion a year—to reduce the taper rate, increase the work allowance, and make sure that we address some of these issues.

[Stephen Timms (East Ham) (Lab)]

I welcome the Secretary of State’s new commitment to tackling child poverty, which these figures show is getting significantly worse. Will she look at the option of universal credit claimants forgoing their final benefit payment after they have got into a job, in exchange for an up-front payment to fill the five-week gap before entitlement to benefit, which is forcing so many families to use food banks at the moment?

[Amber Rudd]

The right hon. Gentleman has raised that with me before. I am always looking at ways to improve the way we deliver universal credit. I have said that I will look at that, and I will continue to engage with everybody across the House to find ways of improving the delivery of universal credit. I feel that the advances that are available to people on day one when they apply for universal credit are the way to ensure that people have access to money as soon as they need it. That is working well, with over 60% of claimants now taking advantage of it.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 18th March 2019 Commons Chamber

[Amber Rudd]

I thank my hon. Friend for pointing out this important element of universal credit. We are determined to make sure that universal credit really supports the most vulnerable. We are piloting a new scheme in Milton Keynes in which people with mental health difficulties are given an early referral to make sure that their needs are dealt with early on, so that they can be given the appropriate, personal, supportive care that they need.

[Stephen Timms (East Ham) (Lab)]

The five-week wait for universal credit assumed that everybody would have their last month’s pay cheque in the bank, but reality is not like that. Most claimants have to take an advance—a debt to the Department—the repayment of which often forces people to use food banks, as the Secretary of State has rightly acknowledged, or go into rent arrears. Will she scrap the five-week delay?

[Amber Rudd]

I thank the right hon. Gentleman for raising this important issue; we have addressed concerns about the five-week wait by putting in additional measures. One measure now in place relates to the receipt of legacy housing benefit over two weeks. All universal credit applicants can get an advance, and we now find that 60% of applicants take up that opportunity. That obviates the need for concerns about the early amount of cash that people get.

--- Later in debate ---

[Alok Sharma]

Our frontline staff deliver vital support to more than 20 million people across the country, and of course we are committed to supporting them in their roles. That includes monitoring staff levels and ensuring that their caseloads are indeed manageable.

[Stephen Timms (East Ham) (Lab)]

T5. When Bright Blue surveyed claimants for its new universal credit report, it found that the five-week wait was their biggest concern. According to the report: “Only a handful of interviewees said they had enough…to cover their expenses in this period.”The Secretary of State cannot justify the five-week wait. Will she scrap it?

[Amber Rudd]

As the right hon. Gentleman knows, we are introducing measures to help people gain early access to money so that that eventuality does not occur. They can receive benefit advances of up to 100%, which 60% now access, and can access the housing benefits run-on, which is additional money, and, from next year, other legacy benefits, which are also additional money and which will be paid within that two-week period.

Department for Education

Stephen Timms Excerpts

Tuesday 26th February 2019 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I want to raise one topic, which has already been touched on by my hon. Friend the Member for High Peak (Ruth George) in her excellent speech opening the debate: namely, the current five-week delay between claimants applying for universal credit and being entitled to their first payment. Like the hon. Member for Edinburgh West (Christine Jardine), I welcome the change of tone from the Secretary of State and her frank acknowledgment of the fact, long denied by her predecessors, that the roll-out of universal credit has increased demand at food banks.

The theory of the five-week delay was explained to us by the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) during the coalition period. He explained that people leaving a job will have their last monthly pay cheque in the bank, which will keep them going for a month. In addition to the normal waiting days, which have always been part of the benefits system, that results in a delay of five or six weeks.

There are some obvious problems with that justification. For example, what about those who are paid weekly? The hon. Member for Bexhill and Battle (Huw Merriman) told us that 75% of people are paid monthly—that may well be right; I think it is about right—but what about the 25% who are not? According to the latest annual survey of hours and earnings, 16.2 % are paid weekly and 2.9% are paid fortnightly. What are those people supposed to do during this five-week gap? The Government’s justification for the five-week gap clearly does not apply to them.

I have repeatedly pressed Ministers on this subject. They are not capable of providing a justification for the five-week delay for people who are not paid monthly. I do not blame them, because there is no justification. I confidently predict that we are not going to hear a justification that works for them when the Minister winds up this debate. What about people on zero-hours contracts? They cannot be confident of having had a monthly pay check when they left their last job either. Even more starkly, the five-week gap will also apply to the millions of people about to be transferred from legacy benefits to universal credit.

[Chris Stephens (Glasgow South West) (SNP)]

On zero-hours contracts, does it alarm the right hon. Gentleman that someone on universal credit who comes out of a zero-hours contract job could be sanctioned, whereas if they were on a legacy benefit, they would not be sanctioned?

[Stephen Timms]

The hon. Gentleman is absolutely right. On JSA, people could not be sanctioned for that and on universal credit they can. I agree with him that that is wrong. That was revealed in a very recent written answer.

Another written answer to a question I asked last week told us that 57% of new universal credit claimants are taking an advance. The proportion of those applying for universal credit who have a month’s savings, as the policy assumes, is less than half. Most applicants have to go into debt to the DWP and take an advance to stay afloat in the first five weeks. Having been forced into debt in that way by the Department, far too many people find it impossible to get out of it. That is why we have seen the big increase in demand for food banks.

The Secretary of State suggested that the problem was temporary, because of early glitches in the roll-out of universal credit. No doubt it is true that the extraordinary delays that were experienced at the start of the universal credit roll-out did make things even worse, but the fact that over half of applicants are forced into debt by taking an advance, because they do not have the money in the bank that the policy assumes they will have, is why so many people have to use food banks and why so many get into arrears with their rent. This problem is hard-baked into the Department’s current policy.

The Trussell Trust made the point that it found the increase in referrals to its food banks was 52% in areas where universal credit had been rolled out for 12 months or more, compared with a 13% increase for areas where it was, at most, three months since universal credit had been rolled out or it had not rolled out at all. In other words, when universal credit is well-established and has been there for at least 12 months, the increase in referrals to food banks is greater than when universal credit has just been introduced. The Trussell Trust has been pointing that out for a considerable length of time.

Another change of tone I welcome came in another written answer last week. It told us that the Department is now working with the Trussell Trust to see if it is possible to develop—I think this is how it referred to it—a “shared conclusion” about the impact of universal credit on food bank demand. I shall certainly be very interested to see that shared conclusion when it is published. The Trussell Trust briefing for this debate highlights the five-week delay as among the

“urgent problems causing significant hardship”.

It goes on to say that Trussell Trust food bank referrals due to benefit delays are increasingly driven by this initial wait. It is a huge problem that needs to be fixed.

Employment and Support Allowance: Underpayments

Stephen Timms Excerpts

Monday 25th February 2019 Commons Chamber

[Sarah Newton]

My hon. Friend makes a good point. In not only the process for claiming new benefits but this particular exercise, a lot of effort is going into ensuring that we find people and engage with them to check whether they are eligible for these additional payments. That happens through letters, telephone calls and even home visits, to ensure that we contact people in the most appropriate way possible for them.

[Stephen Timms (East Ham) (Lab)]

What is the Minister’s current estimate for how long it is going to take to complete this exercise and to correct all these very serious mistakes?

[Sarah Newton]

We anticipate completing the exercise this year.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 11th February 2019 Commons Chamber

[Amber Rudd]

My hon. Friend draws attention to a real failing of the previous system. There was such a high rate of tax—sometimes up to £9 out of every £10—that there was no incentive for people to get into work. I thank him for reminding us that universal credit adjusts to such situations and ensures that work will always pay.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State is, no doubt, right that delays in payment were part of the problem, but does she recognise that the fact that people are not entitled to any money for the first five weeks makes a big contribution to the problems that we are seeing?

[Amber Rudd]

I have acknowledged that people having difficulty in accessing money on time was one of the causes of the growth in food bank usage, but we have tried to address that. One of the principal ways of doing so is to ensure that every applicant can receive advance payments on the day that they apply. In fact, I visited a jobcentre just before Christmas and was told about a number of claimants who came in for the first time on the Friday before Christmas and got those advance payments.

Universal Credit

Stephen Timms Excerpts

Monday 14th January 2019 Commons Chamber

[Alok Sharma]

My right hon. Friend has highlighted a very important point. He has talked of the incredibly hard-working DWP staff in the Haywards Heath jobcentre, but the Secretary of State and I see the same hard work as we go up and down the country talking to our colleagues in jobcentres. They are all incredibly committed, and they see the benefits of universal credit in helping people and ensuring that claimants have the one-to-one support that was not in place before.

[Stephen Timms (East Ham) (Lab)]

I also welcome these modest steps in the right direction, but why did the Secretary of State and the Minister both deny a week ago the change that the Minister has now announced about the separate regulations for the 10,000 migration? Will the Minister respond to the point made by the Father of the House, the right hon. and learned Member for Rushcliffe (Mr Clarke)? The five-week delay is indefensible; it is forcing people to rely on advances, putting them into debt right at the start of their claim.

[Alok Sharma]

I know that we have had this exchange before, and I am sorry if the right hon. Gentleman feels that I repeat myself. Of course it is important that we get money in people’s pockets early. There is no question about that, and that is why we made the changes when we said we would make sure that absolutely anyone who needed it could get up to 100% of their advances up front. I have talked about the two-week run-on for those on housing benefit, which does not have to be repaid, and as the right hon. Gentleman knows in the last Budget we also announced that from July 2020 those on out-of-work DWP benefits will also get a two-week run-on.

Universal Credit: Managed Migration

Stephen Timms Excerpts

Tuesday 8th January 2019 Commons Chamber

[Alok Sharma]

I thank my right hon. and learned Friend for his support. We have always said there will be a test phase, and that is what we will have. He is absolutely right to highlight that the introduction of tax credits was not a success, whatever Opposition Members may say. It is absolutely right that we listen and learn, and that is precisely what we will do as we go through the test phase.

[Stephen Timms (East Ham) (Lab)]

Tax credits were a great success. In answering my question yesterday about the five-week wait before claimants are entitled to their benefit, the Minister pointed out that advances are available. That is true, but of course that means people are indebted to his Department right at the start of their claim. Press reports at the weekend stated that the roll-out would be paused because of worries about growing indebtedness. Are Ministers concerned about rising indebtedness among benefit claimants because of universal credit?

[Alok Sharma]

As I said yesterday, I know the right hon. Gentleman takes these issues extremely seriously, but so do we. That is why we introduced a change last year to ensure that advances of up to 100% are available on day one. Some 60% of those who come on to universal credit now take advantage of those advances. There is also the two-week run-on for housing benefit and, as he knows, we set out in the Budget further measures, which will come into place in 2020, when those moving across from out-of-work DWP legacy benefits will also get run-on.