Universal Credit Roll-out

Debate between Stephen Timms and Steve Reed

Thursday 16th November 2017 Commons Chamber

[Mr Steve Reed (Croydon North) (Lab/Co-op)]

I congratulate the hon. Member for Banff and Buchan (David Duguid) on a really powerful maiden speech. He made a good case for getting up to visit Banff and Buchan, so I will be booking a trip there as soon as possible to taste the whisky and see the wildlife that he talked about. He is a wonderful advocate for the area.

The hon. Gentleman also looked incredibly confident and relaxed as he gave his speech. I think back to how nervous I felt when I gave my maiden speech, but he made his like an old pro—[Interruption.] Seasoned might be a better term. We can look forward to many more excellent contributions from him and I wish him very well in his career in this House.

I thank my right hon. Friend the Member for Birkenhead (Frank Field), who is no longer in the Chamber, for securing this important debate. Croydon was one of the first boroughs to experience the roll out of universal credit, so we have had longer to see what a total and utter disaster it is. A long and growing stream of people have come to my office, many of whom have been close to tears because universal credit has forced them into debt. It has made it harder for them to stay in work and left many of them facing eviction for rent arrears.

Our local council has had to spend £3 million so far to stop people from being evicted because of late rent payments. Local food banks are running out of food because of the vast increase in demand from people who are going hungry because of what the Government’s scheme has done to them. More than 1,000 tenants in Croydon have over three months’ rent arrears and are at risk of losing their home because of the failures of universal credit.

[Stephen Timms]

Does my hon. Friend agree that one of the problems—it is certainly not the only one—although it is denied by Ministers, is the fact that the IT system for universal credit is not yet working properly?

[Mr Reed]

I absolutely agree with my right hon. Friend. I cannot for the life of me understand why the Government insist on ploughing ahead when it is quite clear that the IT system is not fit for purpose. They should pause the process and fix that before they inflict this damage on any more people.

According to my council’s figures, a tenant on housing benefit—the legacy system—had an average rent account that was £42 in credit. Under universal credit, a tenant has an average balance of £722 in arrears. This is supposed to be a system that helps low-income families, but it is instead forcing them into debt and out of their homes.

I wish to share just a few short examples from my own casework, and I suspect that we will hear many, many more throughout the debate. One constituent told me that he had £1,400 of debt and two months’ rent arrears because of errors with her universal credit. She had no money to buy food for her family or to heat her home.

A mother of five children was left waiting nine weeks for her first payment. She works part time and is desperate to keep working. She wants to do exactly what the Government tell her that she should be doing, but the new system has let her down and pushed her into debt.

A pregnant mother with two young children came to see me. She was not eating properly because of debt, which posed a serious risk to not only herself, but her unborn child. She had no option but to take out several high-interest payday loans and has been threatened with eviction because of underpayments. It is outrageous to leave anyone in those circumstances, let alone a pregnant woman.

Severely disabled people face the particular problem that universal credit does not include a severe disability premium. Although the Work and Pensions Committee raised its concerns about precisely that earlier this year, as yet the Government have done absolutely nothing.

Under the current system, a person with severe disabilities in receipt of income-related employment and support allowance with a severe disability premium gets £172 a week. Under universal credit, that is cut to just £146 a week. I became aware of that when our citizens advice bureau referred to me the case of a claimant with severe mental ill health who was moved on to universal credit when he became liable for housing costs. The effect was that he lost more than £100 from his benefits to cover his living expenses, and he had no transitional protection because he had experienced a change of circumstances. When a person has so little income, financial loss on such a scale is utterly devastating.

Universal credit is an unmitigated disaster for hundreds of the most vulnerable people in Croydon North. If the roll-out continues before the system is fixed, those hundreds will become thousands. People just cannot cope. What kind of system penalises the poor, and forces people out of jobs and on to benefits and into food banks? The Secretary of State for Work and Pensions and the Minister for Employment must do what this House instructed them to do in a recent vote: pause and fix the system before it devastates any more lives.

Budget Resolutions and Economic Situation

Debate between Stephen Timms and Steve Reed

Thursday 17th March 2016 Commons Chamber

[Stephen Timms]

There is a lot of worry about the proposals, and I hope that the Government will assure us that there will be no real-term cuts in the funding of individual schools. Half a billion pounds could go a long way to achieving that, and it would be helpful if the Minister could give us that assurance.

As we have heard, the Red Book contains a chapter called the “Devolution Revolution”, but the Budget ends local authority influence over education, which always used to be devolved. The hon. Member for Taunton Deane said that it was wonderful that we will have one system for education in the future, but I thought the Government were in favour of devolution, and the Red Book claims that they are. It is a big contradiction to proclaim devolution on the one hand, at the same time as ending local influence over education.

I am particularly sceptical about the benefits of turning every primary school into an academy, because I have seen no evidence that doing that will be a good thing. The Minister and the Secretary of State will know of local educational authorities—other Members have spoken of them in the debate—that do a very good job in supporting the local network of primary schools, enabling schools that are struggling to be supported, for example by a gifted head from another school nearby. I therefore want to put this question to the Minister and ask him to respond on behalf of the Secretary of State: what is the case for simply dismantling and smashing up all the successful arrangements of that kind?

The Church of England referred in its response to

“the particular challenges that many smaller primary schools will face as they seek to develop such partnerships”.

The Sutton Trust was quoted by the Secretary of State and by me in an intervention. It rightly makes the point in its impressive research that good

“academy chains are having a transformational impact on pupils’ life chances”,

which is a very good thing, but it also says that

“others have seriously underperformed and have expanded too rapidly.”

That is why I pressed the Secretary of State specifically on whether the mass process of turning every primary school and every remaining secondary maintained school into an academy will be done by adding those schools on to existing chains, too many of which are underperforming. Only about a third are doing well, according to the Sutton Trust. The chains that are doing badly are doing badly because they have expanded too quickly. The process could make that far worse by forcing hundreds of additional schools into those same underperforming chains. I therefore press the Minister again. I did not get the assurance I was seeking from the Secretary of State that the process would not be done by adding new schools on to underperforming chains. I hope he can give us that reassurance in his response.

Local authority support for families of primary schools is successful. Do the Government envisage those simply being rebadged as multi-academy trusts? Perhaps that is one way out of the problem. Destroying those arrangements is potentially very damaging.

[Mr Steve Reed]

My right hon. Friend makes an interesting observation. What are his thoughts on the initiatives of Labour councils such as Brighton and Hove, which are setting up co-operatives for their schools to join together to try to undermine the Government’s attempts to isolate and atomise schools?

[Stephen Timms]

I very much welcome that. I thought everybody agreed that diversity in school provision was a good idea rather than having the one-size-fits-all model for which the hon. Member for Taunton Deane argued. Surely we should be encouraging exactly the kind of arrangement that my hon. Friend draws attention to, so that we can enjoy the benefits of the diversity that results.

I am glad that, in opening the debate for the Opposition, my hon. Friend the Member for Hayes and Harlington (John McDonnell) focused on the failures that the Budget highlighted yesterday. The OBR pointed out to us that the Chancellor had three fiscal rules in the run-up to yesterday’s Budget. He has broken two of those. He has broken his commitment, which was made less than a year ago, to reduce debt as a proportion of GDP in every year. We had that rather puzzling passage in the Budget speech when the Chancellor talked about numerators and denominators and a paradoxical outcome. It turns that he was saying that he had failed on that rule.

The second rule he failed was on the welfare cap. It is hard to think of any Treasury legislation of the past 20 years that has backfired so spectacularly as the welfare cap. It was legislated for last summer with great fanfare, but within weeks it was announced that it would be broken. The OBR now tells us that it will be broken in every single year of this Parliament. The whole thing has become a complete fiasco.

The third rule that the Chancellor went into the Budget with was the commitment on delivering a surplus. Of course, in the last Parliament, the centrepiece of the Chancellor’s project was to eradicate the deficit by 2015. He failed on that, and it now looks very likely that he will fail to achieve the surplus he has promised by 2019-20. To deliver it would require extraordinary fiscal tightening in what will almost certainly be the year leading up to the next general election. I cannot see that happening. By then, the Chancellor will have failed on all three of his rules.

The Budget raises important questions and I hope we get answers on the specific education points when the Minister winds up.