The Department for Work and Pensions is currently undertaking work to investigate the reality of rent arrears in universal credit. It aims to understand the true level of rent arrears for tenants, what is causing them, and any impacts universal credit may be having.
New findings say that 49% of landlords are less likely to rent to those in receipt of universal credit. In Kirklees, only 121 social homes are available for the 9,700 people on the waiting list. What steps will the Minister take to prevent those on universal credit from being discriminated against?
The hon. Lady is right to ask the question, but alternative payment arrangements are available. We have listened carefully to housing providers and we are seeing improvements all the time.
I listened carefully to the Minister’s answer, and I wonder whether it would be of any surprise to her that the chief executive of a large housing authority in the north-west of England recently told me that the authority had arrears of more than £2 million from universal credit alone. Claimants in one authority in Yorkshire and Humber have average arears of more than £1,100 each. Why is that happening and what is she going to do about it?
We have to be careful not to scaremonger on this issue. A National Federation of Arm’s Length Management Organisations report says that three quarters of tenants who started to claim universal credit were already in arrears, and research shows that after four months the number of claimants in arrears has fallen by a third.
The single biggest problem for some welfare recipients who move into universal credit is their high level of debt. Can my hon. Friend the Minister for Employment tell me what he can do to take forward his idea of an interest-free period to resolve outstanding debt, and to promote the use of credit unions in advising strongly against the use of loan sharks, particularly in the run-up to Christmas?
On behalf of the Minister for Employment, may I say that my hon. Friend makes a very important point? We do want people to address their levels of debt, and that is why we have this effective system of advance payments, which enables people to budget properly and to meet their debts.