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I beg to move,
That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that the following papers be laid before Parliament: any briefing papers or analysis provided to the Secretary of State for Work and Pensions since
Universal credit, the Government’s flagship social security programme, has been beset by flaws in its design and delivery. It is causing immense hardship for many people wherever it is rolled out. It is hard to believe now, but universal credit was designed to lift people out of poverty and smooth the transition into work to ensure that it always pays. The reality is that universal credit is a vehicle for cuts: cuts in support for families with a disabled child for whom the basic rate of support is half what it is in tax credits; cuts in support for disabled people in work, such as the disabled person who wrote to us saying that they are more than £300 a month worse off since switching from claiming working tax credits; and cuts in support for lone parents bringing up children who will get more than £20 a week less on average, with many losing far more.
My hon. Friend is absolutely right to start with the issue on how universal credit is impacting on those with disabilities, the vulnerable and the unwell. I have a constituent who is caring for her disabled daughter and who has her own mental health problems. She was given the wrong advice from the Department for Work and Pensions and was left with £1,000 of rent arrears and universal credit not paid. What a shambles this policy is.
Let me make some progress.
Overall, 3.2 million families with children could lose around £50 a week. People are worried, but there is no clarity from Government. The Prime Minister told this House that no one would be worse off, yet The Times reported that the Secretary of State told Cabinet colleagues that households could lose up to £200 a month. Being forced to manage on a low income that is then cut still further means tough choices for the families affected. The DWP’s own survey of claimants published in June showed that nearly half of new universal credit claimants are falling behind with bills. Even six months later, four in 10 are still struggling to cope financially.
I will make some progress and then I will take some interventions.
For more than a year now, those of us on the Opposition Benches have been calling on the Government to address the policy’s many flaws. I am talking about: the insistence on digital by default when many people trying to make a claim are either not able to use IT or do not have access to it; the monthly payment in arrears when so many people on low incomes are used to being paid fortnightly or even weekly; its inability to cope with fluctuating income that is part and parcel of life on low-paid, insecure work or self-employment; and the payment to a single person in a household that can make it more difficult for someone suffering domestic violence to leave an abusive relationship.
I thank my hon. Friend for giving way. Does she agree, first, that we should call a halt to this process; secondly, that many people have been driven into the hands of money lenders; thirdly, that many people have found themselves in rent arrears; and, fourthly, that usage of food banks has gone up as a result of this policy?
My hon. Friend makes a number of pertinent points. He is absolutely right to call on this Government to halt the roll-out of universal credit.
Other flaws include: the online journal in which people have to record the jobs that they have spent 35 hours a week applying for, but which work coaches often struggle to find the time to monitor; and the five-week wait for a payment at the start of a claim. According to the latest Government figures, 17% of claims were not paid in full and on time, and one person in 10 did not receive any payment at all. Groups such as carers or parents who need help with childcare are more likely than others to have to wait for their first payment. The latest figures show that only a third of people who are ill or disabled were paid on time.
Will the hon. Lady also spare some time to talk about the 700,000 people who will be better off by an average of £285 a month under universal credit and those who find work through it?
The hon. Gentleman is getting ahead of himself, because there is no evidence that the Government can demonstrate whether universal credit gets people into work.
The Government’s answer to the delays was to provide advances, but they have to be paid back as well as debts for utility bills, council tax or rent arrears that people will probably have built up while waiting. The maximum percentage that can be taken out of universal credit for repayments is 40%. How is someone already trying to manage on such low income supposed to cope when such a large slice of their support is taken away at the source? And yet—in the face of all of the evidence—the Government have insisted on pressing ahead and accelerating the roll-out of universal credit since May this year, at the same time as carrying out a rapid programme of closing one in 10 jobcentres. The Government plan to increase the workload of work coaches fourfold and that of case managers sixfold as the roll-out continues. Staff are under constant pressure and are switched back and forth between processing claims and answering phone calls about problems with them.
From next year things are set to get a whole lot worse, as the Government prepare to embark on the next phase of universal credit—so-called managed migration—which will require almost 3 million people claiming the benefits that universal credit is replacing, such as tax credits and employment and support allowance, to make a new claim for universal credit instead. As hon. Members are aware, there is nothing managed about it.
Does my hon. Friend agree that one of the real issues is that, under this migration system, people who are in work are becoming worse off? How on earth can a system encourage work when it makes people in work worse off?
My hon. Friend hits the nail on the head; he is absolutely right to raise that issue.
The Government plan to place the entire burden on the claimants themselves to successfully make a claim, rather than the DWP automatically transferring them across. Under the Government’s regulations—as currently drafted—a letter will drop through the letterbox on to the mat, telling people that their existing claim will end and that they will have a month to make a new claim for universal credit. Labour believes that it is without precedent for a UK Government to place all the responsibility of making a claim on the millions of individuals who the Government know to be in need, putting people at risk of falling out of the system altogether. The Government are doing this despite all the evidence of the serious difficulties that people are facing when making a claim.
Does the hon. Lady agree that one of the strengths of the system is that people apply for only one benefit under universal credit, so it is much less complex? Indeed, many people will get a benefit to which they did not previously know they were entitled.
When the hon. Lady looks at the drop-out rate and the number of people who actually fail to complete a claim, I think that she will probably revise the comment that she just made.
Over half the households that will be required to move across will be working families—people in work whose income is too low support them—while over a third will have been claiming ESA, which means they have been assessed by the Government as too ill or disabled to work. Just receiving the letter will be very unsettling for someone with a mental health condition or a learning difficulty.
I am taking no more interventions. [Interruption.] Well, I am short of time and many people have put in to speak.
Receiving the letter will also be unsettling when people have been on their existing benefit for a significant period. Of course, some people may miss the letter altogether. Also, they may well struggle to fill the form in on time and to get the necessary advice because, due to this Government’s cuts, the advice agencies are stretched to the limit. There is provision for the deadline to be extended but many people will not be aware of that. The Government have admitted that they do not know how many people overall will need additional support to make a new claim.
The Prime Minister assured us last week that people required to transfer to universal credit would not be worse off because they will receive transitional protection—an additional payment that tops up someone’s universal credit to the same level of the benefits that they were previously receiving. However, that only lasts for two years and could be lost when someone’s circumstances change, which can include such basic life events as moving in with a partner or separating from them.
If people lose transitional protection, they will find that the support they receive under universal credit is often significantly lower. For example, there is no enhanced disability premium, which is currently claimed by over 1.4 million people, and no severe disability premium, which is claimed by another 500,000 of the most severely disabled people who live alone. There is even a danger that many of the most vulnerable will fall out of the social security system altogether and be left without any income at all. According to the latest figures, almost 30% of universal credit claims started are never completed. Do the Government not care about what happens to these people?
The Government say that universal credit will bring greater take-up, but not if people cannot make a claim in the first place. People with low literacy skills, a learning disability or no IT access are likely to find it difficult to cope with a complex online system. [Interruption.]
This is a really serious matter and the hon. Gentleman would do well to focus on the issue at hand.
If we translate the percentage of claims that are closed before they are completed to the nearly 3 million people the Government want to transfer across, we can see that nearly 1 million people are at risk of falling out of the social security system altogether.
Food banks are reporting that they are running out of food. In August, Department for Work and Pensions officials carried out a study to identify areas where DWP operational practices contributed to such a rise in demand for food bank services. I think that any Member of the House will know the answer to that.
I am going to make some progress.
When the National Audit Office raised the alarm with its damning report back in June, the Government misrepresented its findings and stubbornly claimed that it did not take account of changes that they had made, but they will not publish the figures that would enable the public and Parliament to hold them to account. This week in the Chamber, the Secretary of State met criticism of universal credit with accusations of scaremongering, so I will ask again: are Citizens Advice, the Child Poverty Action Group, the National Association of Welfare Rights Advisers, Mencap, Mind, Scope, Parkinson’s UK, the Residential Landlords Association, the National Housing Federation, the Resolution Foundation, National Audit Office, the Archbishop of Canterbury and two former Prime Ministers scaremongering? The confusion of the last fortnight has caused families real concern about the transfer to universal credit and they deserve answers, so will the Government publish all reports and analysis that they have carried out into the effects of universal credit since the Secretary of State took office? People have a right to know.
The social security system should be there for any of us should we need it, yet the Government’s flagship programme has brought real hardship. How did it come to this—that people are facing hunger and destitution in the fifth largest economy in the world? It cannot be right. The Government must wake up and open their eyes to what is happening. That is why the Labour party is calling on the Government to stop the roll-out of universal credit.
It is good to be here again to update the House on universal credit for the third time this week. I know that many Members want to speak in this debate. I know too, Mr Speaker, that you are always anxious to hear Back Benchers speak, as am I, so I will keep my remarks as brief as possible.
I have been forthright with colleagues across the House—and in my speech at Reform earlier this year—about universal credit’s strong merits and the areas that we need to improve. In fact, in my Reform speech, I said that I would improve universal support, and I delivered on that this month. Since becoming Secretary of State, I have changed the system to provide extra support for those with severe disabilities, vulnerable young 18 to 21-year-olds and kinship carers. I am also working with colleagues to identify areas where we can make more improvements.
Will my right hon. Friend confirm that, although the Government will always want to do more, eight out of 10 universal credit claimants are actually satisfied with their experience, and believe that it is good and helping them into work?
My hon. Friend is correct. Those are the figures and that is what people are saying. We know that it is working and getting people into work because our employment figures that came out yesterday show that over 3.3 million more people are in work since 2010. So we know that we are moving forward.
I will continue just a little bit further.
In less than 10 months, my ministerial colleagues and I have met over 500 colleagues, charities and stakeholders; come to the House on 56 occasions; visited 46 jobcentres, service centres and pension centres; tabled 34 written ministerial statements; and appeared in front of Select Committees 12 times. My Department has published 637 responses to parliamentary questions, 153 pieces of guidance, 102 statistical releases, 30 research reports, and 23 consultations. We have gone to great lengths to be open.[This section has been corrected on
I am very grateful to the Secretary of State, who is doing an excellent job in improving an intrinsically good system and dealing with the little difficulties we need to sort out. Given that it is crucial that there is enough incentive for people to get into work, will she confirm that one of the improvements is to lower the rate of withdrawal so that it is more worth while to work, and will she push for that to be improved further?
My right hon. Friend is quite correct. As he will know—and everybody in the House should know—under the legacy benefits there were punitive tax rates of over 90%. We have now brought that down to 63%. As an advocate of people who want to get into work, he is right: we should aim to get that taper rate down even further.
We also took the unusual step, earlier this year, of publishing a summary of the universal credit business case, which explained the economic case for universal credit, showing that it will help 200,000 more people into work when fully rolled out, and empower people to work 113 million extra hours.
Before the hon. Gentleman intervenes, can I just point out that there are approximately 65 hon. and right hon. Members who wish to speak in the debate, and considerably less than four hours in which people can be called, so the less noise, the greater the progress.
One in four workers in my constituency is self-employed—obviously, they are working and contributing. Is the Secretary of State aware that the minimum income floor means that many of them will be ineligible for universal credit if they cannot pay themselves the living wage in any given month? Surely we should be encouraging self-employed people, not penalising them.
Obviously the hon. Gentleman will understand a lot about the minimum income floor because he was in the coalition when we came forward with those policies. We decided at the time that if people were not earning enough—if their business was not earning them enough and they were not on a minimum wage—we would then help them to go into work, and therefore they could have a better wage if their business was not working in that regard.
We published the information I mentioned alongside hundreds of reports on universal credit each year by outside bodies—independent organisations like the Office for Budget Responsibility, the National Audit Office, the Institute for Fiscal Studies, the Resolution Foundation, the House of Commons Library, and numerous others. So we are open with our information.
One of the representations the Secretary of State will have received is from the Residential Landlords Association saying that a majority of its members are now not willing to let accommodation to universal credit claimants because they quickly get into arrears and cannot pay the rent. Is she proposing some change to address that specific problem?
As the right hon. Gentleman will know, we have made various changes to make sure that we can pay direct to the landlords—that we can give alternative payments. It is only right that we do that. However, when we talk about the difficulties that claimants have got into, it is good to look at the legacy benefits and Labour’s track record. Between 1997 and 2010, benefits claimants’ debt to local authorities increased by £1.8 billion through overpayment and errors in the legacy system. On tax credits, introduced by the Opposition, claimants got into £5.86 billion-worth of debt through error and overpayments. That is a shameful record from the Opposition.
Let me get back to the independent reports, what is happening, and what is being made publicly available. We are learning from that evidence, building on that evidence, and making decisions so that we can improve the system as it goes further. [Hon. Members: “Give way!”] The power to choose who is going to get a question!
Is not the real way to combat poverty to get people off benefits and into work, is not the evidence that people on universal credit are more likely to get back into work than people on the old benefits, and is not that the real test of this system’s success?
Order. I say to Neil Coyle, whose grinning countenance belies an aggressiveness of spirit in this matter, that it is not really in order to yell out, “On the same point”, as a way of trying to ensure that one is called.
Believe me, the hon. Gentleman does that perfectly satisfactorily in any case.
Conservative Members have made sure that since 2010, 1,000 people each and every day have got a job. I want to give out a very, very important statistic that came out yesterday—youth unemployment has fallen by 50% since this Government have been in office. That is thousands of young people with a future that this Government have given them.
I did not have any impression that the Secretary of State was having any particular difficulty; I think she was spoilt for choice and taking a little while to exercise her choice. But we are always grateful for the right hon. Gentleman’s advice, solicited or otherwise. [Interruption.] Well, I am not going to comment on the glasses situation—it is rather beyond the ken of the Speaker. However, we note the right hon. Gentleman’s well intentioned advice.
The Secretary of State is making her usual robust case and claims that the system has improved. Why is it, then, that the Department acknowledges that thousands of landlords, especially private sector landlords, will never be part of the landlord portal; that the Government have had to exempt supported housing fully from universal credit; that 300,000 people will get late payments this year, according to the Department; and that underpayments and overpayments are increasing under universal credit to levels not seen with the legacy benefits?
To be fair, 76% of people coming on to universal credit had arrears in their housing benefit, according to the report by the National Federation of ALMOs. That is the reality of it. I have given the figures for the extra debt people got into under the previous Labour Government.
Some very interesting speeches were given in the House in 2016, when people understood that we had to get the benefits bill down. This is what was said on the Floor of the House:
“The deficit has to be eliminated. We believe in controlling the cost of social security so that it is fair” on
“the people who are paying for it”—[Official Report,
Vol. 598, c. 1265]— and for those who need it. That did not come from a Conservative Member but from Labour’s acting shadow Secretary of State for the Department for Work and Pensions. We all believe in making a fair benefits system and getting people into work, and that is what universal credit is doing.
As a northern MP, I know that there was a much slower uptake of really great work in the north. Will the Secretary of State confirm that unemployment has fallen by half in the north-west, which is giving the security of a pay packet to so many more people?
My hon. Friend is right that unemployment has fallen by more than half in the north-west. I am surprised that Margaret Greenwood did not know that but, then again, the Opposition are not always too hot on their figures.
I want to give another important piece of information. Labour’s position on the Welfare Reform and Work Bill in 2016 was, through the Labour Whip, to abstain on the changes. Some of them broke the Whip, but the position was to abstain, and this is why: in 1997-98, the welfare cost per household was £5,603 but, by 2010-11, when Labour left office, that figure had gone up to £8,350—up by nearly £3,000 per household. That is why everybody agreed in principle that universal credit was the way forward and that we had to get the benefit bill under control.
The Secretary of State pointedly remarked at the start of her contribution that this is the third time she has had to come to the House just this week. Does that not tell her how badly these reforms are going? We are all receiving hundreds of representations, and few of her own party’s Members are willing to turn up to support her. Is it true that, at the end of the debate, she will not have the confidence to ask her Members of Parliament to vote against the motion, because she knows that many of them agree with it?
I thank the hon. Gentleman for his kindly words and advice but, when the Division goes, we will see what happens. I am convinced that Government Back Benchers know how many millions more people we have got into work. I am convinced that they know that 1 million more disabled people will end up with more money under universal credit. That is what this is about—supporting the most vulnerable claimants.
On a point of order, Mr Speaker. I wonder whether you could provide advice. I understand that it is a matter of record whether the Government intend to vote for something. I have asked the Secretary of State specifically whether the Government will vote against the motion. Is it reasonable to ask that question?
It is perfectly reasonable for somebody to ask, and the Secretary of State can answer if she wishes or not if she does not, but there is no breach of order in there not being a declaration of intent on that matter at this stage in the debate. At what point it becomes clear that there will or will not be a Division remains to be seen, but nothing disorderly has occurred. We were about to hear an intervention from Vicky Ford.
Does my right hon. Friend agree that protecting the most vulnerable is key? Can she reconfirm that over 1 million disabled households will be over £100 a month better off and that it is the Government’s policy to continue to work for improvements, to protect the vulnerable?
I am glad that there was some calm and hush for that question, so that I could hear it and give the response that it deserves. My hon. Friend is right: around 1 million disabled households will receive on average around £110 more per month through universal credit. If we were to follow the advice of the Labour party, those 1 million disabled households would be £110 worse off per month. That is what the Opposition are asking for.
Universal credit pays for 85% of childcare costs, compared with 70% under the legacy benefits. Because it is a simpler benefit, as I hear from Government Back Benchers, 700,000 households will get entitlements that they were not claiming under legacy benefits, worth an average of £285 per month.
We have taken a mature approach to rolling out universal credit. We have said that we will test, learn, adapt and change as we go forward. That has resulted in a series of improvements, and I will read some of those out. We are providing extra universal support with Citizens Advice, an independent and trusted partner. We have brought in the landlord portal. We have brought in alternative payment arrangements, 100% advances and housing running costs. We have removed waiting days and are providing extra support for kinship carers and those receiving the severe disability premium.
Do the Government recognise that, in constituencies such as mine in London, work does not pay the rent for most people, because rent levels in the private sector are almost equal to take-home pay? Universal credit is therefore essential. The majority of claimants in my constituency are working. Do the Government recognise the problems with pay-outs, delays and so on, particularly for people whose income changes from month to month, and will the system recognise the needs of the many working families in high-rent accommodation?
I thank the hon. Lady for her question. Those are all things that we have to consider, in terms of how payments are made and how they work for the person in work. That is what we are doing, and that is why we have had a slow and measured roll-out. That was one of the things I said in my reform speech, if she cared to listen to it.
I would like to point out the news yesterday that we have seen the strongest wage growth for nine years. That is what this Government are doing—getting people into work and turning the corner of more wage growth. We will continue to roll out universal credit, and we will engage with colleagues across the House. I met Frank Field yesterday—I think he saw me with my glasses on then, which is maybe why he felt the need to mention that—and I will meet him again. My door is always open. We will make sure we get this benefit right, and Government Back Benchers, who have genuine concerns, want to get it right.
I thank my hon. Friend for those kind words. She has fought tirelessly to make sure that universal credit is the best system possible. Like all our party’s Back Benchers, she is not scaremongering but wants to help people into work and make sure that work pays.
Order. I thank the Secretary of State for what she has said. Before I call the spokesman for the Scottish National party, I remind the House that in excess of 65 Members wish to speak in the debate, therefore there is a premium upon brevity, and the starting time limit for Back-Bench speeches will be five minutes each. I remind the House also that interventions should be brief. If Members want to know what the textbook is, they can consult the right hon. Members for New Forest West (Sir Desmond Swayne) and for Wokingham (John Redwood), to give but two examples, although the book may by now be out of print.
Mr Speaker, I will of course endeavour to get through what I have to say in the protected time I have been given.
I very much thank the Labour party for using some of its Opposition day time today to bring universal credit back to the House. We will support the motion this afternoon. However, for maximum pressure to be exerted on the Chancellor ahead of the Budget, we are calling on Labour and on Tory Back-Bench MPs to work with us to make the case for the investment in universal credit that is desperately needed to make it work. The papers called for in the motion are required to be published fully to inform the political and civic debate that is being had in the country ahead of the Budget. We know what the expert groups are telling us. I imagine they are telling UK Ministers, too, so to what extent are they being listened to?
In some ways, we have the wrong Minister sitting on the Treasury Bench this afternoon. The Secretary of State for Work and Pensions has suggested that she has already made the case to the Chancellor for further investment in universal credit. We do not know how much she has asked for and for what purpose she wants those cuts reversed, but that is now for the Chancellor. Universal credit is already causing misery to millions. The Chancellor should be here to hear that, not just the Secretary of State.
There has been much rumour over recent days about what the UK Government’s plan for universal credit is, with some reports suggesting a delay to the roll-out until 2023. The Minister for Employment said yesterday that he does not comment on rumour, but when I asked him to circumvent that rumour by detailing the plans in the House, he came back with the same “flat-earth rhetoric” that was described by the BBC’s Michael Buchanan as his experience of talking to UK Ministers about universal credit.
Does the hon. Gentleman share my puzzlement at the experience of those of us in our constituencies where we have had universal credit rolled out and we have seen increases in food bank usage—in my own area, of 34%, which is 30 tonnes of extra food—and does he share my worry that the Government do not seem to understand that this demonstrates there is a real problem with this benefit?
I absolutely take what the hon. Lady has said, and I think she is absolutely right. At the weekend, the UK Health Secretary claimed that he had not received any correspondence on universal credit, only—three hours later—for the Mirror’s Dan Bloom to prove that was inaccurate as he had received an email from a constituent in West Suffolk just three days earlier. I will take with a lorry load of salt Conservative Members saying that they have had no problems with universal credit in their areas.
Let us be clear: even if the rumours are true, just delaying the roll-out will do nothing to sort out the problems people are facing with universal credit right now, such as those in Airdrie and Shotts; it will only delay the inevitable for others. It will not solve the misery that is soon to be thrust on people in Aberdeen, Edinburgh and Glasgow. The only way to sort out those problems is by accepting that a significant investment needs to be made in universal credit at the Budget so that radical change can follow.
The biggest problem with universal credit is that, for years, it has been an all-consuming cash cow for Treasury cuts to social security. George Osborne’s 2015 Budget and the subsequent Welfare Reform and Work Act 2016 cut universal credit to ribbons. Everyone’s memory of the Budget in 2015 was George Osborne’s U-turn on tax credits, but as we and others warned then, that U-turn did not cover universal credit and the cuts were engrained but to be seen another day. For the many Tory MPs who thought George Osborne’s U-turn was enough, that day of reckoning is soon to arrive.
Before the hon. Gentleman finishes his speech, will he address the question that I wanted to ask the Secretary of State during her contribution: can we not have the roll-out until all these difficulties have been dealt with, so that we can safely ensure that each and every one of our constituents will not be messed around in the terrible way so many of them have been?
This week, South Lanarkshire Council informed employees that they could lose their universal credit over the Christmas period simply because they are paid four-weekly. Does my hon. Friend agree that this is yet another example of the shambles around universal credit, and will he urge the Secretary of State to do everything in her power to ensure that low-paid staff at South Lanarkshire Council are not penalised this Christmas?
My hon. Friend is making a very good speech. I am advised by one of my housing associations that every tenant—every single one—who has been moved on to universal credit so far has either gone into rent arrears or has seen their rent arrears rise. May I urge my hon. Friend to continue to press not simply for more money for universal credit, but for a complete halt to the roll-out and a complete redesign of the system?
I will give again later, but I will make some progress now.
When universal credit is thrust on people, it is catastrophic. The Secretary of State said as much last week. For many people on universal credit, incomes will fall by £2,400 a year, which is £200 a month or £50 per week. The Child Poverty Action Group estimates that taking all working age social security cuts together since 2010, they reach £37 billion. The benefit freeze is the single biggest cut, as support has failed to match rent or inflation rises for years. Over the decade, this will cost the poorest 10% of households over 10% of their income, and by far the worst hit are families with children and particularly those with more than two children.
Some 500,000 disabled people have lost £30 per week from the ESA work-related activity component cut, while 100,000 disabled children and 230,000 severely disabled adults will also have their money cut via universal credit. Bringing that together, the CPAG estimates that a single parent with a disabled child is set to lose £10,000 from tax and benefit reforms this decade. That should bring shame on every single Government Member. We cannot sit back and allow that to continue; we have to act for proper change. This does not need tinkering at the edges, but fundamental reform.
Talking about the incredible losses under this policy, is it not tremendous that the Scottish Government are continually being asked by the UK Government to mitigate the policies and mistakes this UK Government have made and that Scotland never even voted for?
As ever, my hon. Friend is absolutely right. The Scottish Government have already spent £400 million mitigating the Tory mess on social security. We have used flexibilities on universal credit to make the system better, but we cannot be expected to fill the gaps forever; the change has to happen at source.
Is the hon. Gentleman aware that total spending on benefits relating to disabled people stands at about £50 billion a year and that it has gone up considerably in real terms? Since 2010, spending in total has gone up, not down.
The hon. Gentleman has completely ignored the points I mentioned that have been made by the CPAG and other expert groups. He has completely ignored that. Government Members are deaf to the facts.
There are of course some cheerleaders for the version of universal credit before us. There are those who say nothing needs to be changed, and those whose loyalty makes them blind to reality. They continually say it gets people into work, but the National Audit Office has explicitly said that this claim is absolute patent nonsense. Page 10 of its report states:
“The Department will never be able to measure whether Universal Credit actually leads to 200,000 more people in work, because it cannot isolate the effect of Universal Credit from other economic factors in increasing employment.”
I would love to hear the evidence that directly correlates universal credit alone as the factor in increasing employment.
Is the hon. Gentleman concerned, as I am, by the fact that not only the NAO, but the Universities of York and of Glasgow have shown, in a two-year study, that there is no evidence universal credit actually gets people into work and still less that it improves in-work progression? The Government continually misrepresent these facts. Is he concerned, as I am, about their doing this?
I could not get an answer to this yesterday. On the fact that the Government cannot prove that universal credit gets people into work, the number of claimants in my constituency is 930 higher than a year ago, which is an increase of 54%. The Library now confirms that we cannot make comparisons between one constituency and another where universal credit has been rolled out. It is a complete sham, and there is no way to measure this.
My hon. Friend is absolutely right. On making work pay, the CPAG says that rewards from work are limited. A single person on the minimum wage would have to work full-time for an extra two months in the year just to make up for the cuts—I would love to hear Work and Pensions Ministers explain how 14 months goes into 12—because the taper rate for work allowances make those who are on universal credit the most highly taxed workers in the UK, at 63%. For every £1 earned, 63p is clawed back. That needs changed.
I will make some progress, to allow other Members to speak. [Interruption.] The Secretary of State ignored my colleagues the entire time she was speaking, so it is only fair that I allow them to contribute to the debate.
We should also take with a lorry load of salt any claims from those cheerleaders on the Tory Benches who say, “Universal credit has been rolled out in my area and everything is fine,” after the UK Health Secretary’s embarrassment at the weekend.
No, I need to make some progress.
I have had dozens of emails about universal credit from constituents over the past few days, in the run-up to this debate. One was Leeanne from Salsburgh. She is unable to work but volunteers at her local citizens advice bureau, so she, too, is seeing at first hand the misery of universal credit. She says that it is having a major impact on the food bank she attends weekly to help give advice. She wants the message to get across and for this change to happen.
In my constituency office we have had 10 new UC cases already this month—we receive about 20 to 30 a month, and that is just from those people who know to come to their MP. People are being left in poverty and having to go through an appeals process just to obtain what they are entitled to. While they appeal the DWP decision, they can be left with no money at all. People regularly wait hours on the phone to solve problems, and being able to put food on the table is literally a matter of survival. Does my hon. Friend agree that this delay is another admission?
My hon. Friend is absolutely right. That is why we need to call for the changes to follow as quickly as possible.
At my surgeries, I have met constituents desperate for help with universal credit. I will give just two examples. The first is Shelby Bowrman from Airdrie, who has become a casualty of the disgraceful two-child cap. Shelby gave birth to her daughter, her third child, after the roll-out of universal credit locally—she was due to give birth before the roll-out but was late. Shelby has now been migrated on to universal credit, and it has cost her thousands of pounds. She has been told that the two-child limit, which did not apply to the childcare element of tax credits, now kicks in for universal credit. She returned to work just two weeks after giving birth, to provide for her three children, who are aged two and under. She worked as a dental assistant during the day and for Domino’s at night. The two-child cap in universal credit has made it impossible for her to work. After I raised the case with the Secretary of State on Monday, Shelby has been told that she can get support with childcare costs but has to pay up front and then be reimbursed. She therefore has to find £2,000. That is just ludicrous and highlights why the two-child cap is discriminatory, unfair, a barrier to work and needs to go.
Another constituent at one of my Friday surgeries highlighted how universal credit completely fails to support people with mental health conditions. Her son Jordon, from Airdrie, is currently receiving acute mental health treatment but needs his universal credit application to progress, for obvious reasons. Jordon’s mental health condition is such that he is in crisis and in hospital.
With respect, Madam Deputy Speaker, I have protected time and there is a great deal that needs to be said in this debate. I will do my best to get through it as quickly as possible.
Order. I am simply pointing out that a lot of Members wish to speak, and that the hon. Gentleman has now been speaking for longer than the Opposition Front Bencher.
The Opposition Front Bencher obviously made a decision about the length of their speech, and I am doing my best to get through what I have to say.
Yet jobcentre staff told Jordon’s Mum that his claim could not continue until he signed his claimant commitment—[Interruption.] I think it important that Members listen to this, because I am talking about someone with an acute mental health condition. If he did not sign, he would have to apply for jobs from his hospital bed if he was to avoid a sanction. At what level is that not an abuse? I am not criticising jobcentre staff; they do the very best they can while implementing a disastrous policy from this UK Government. I suggest that the experience of frontline jobcentre staff rather differs from what Ministers would have us believe.
Universal credit, in its current form, is doing real damage to individuals and families. It is not just me saying that; experts are calling for change. The Joseph Rowntree Foundation says that cuts announced in 2015 will mean that 3.2 million households will typically be around £50 a week worse off on universal credit compared with tax credits.
Policy in Practice said this month that almost two in five households on universal credit will lose an average of £52 a week and that some 2.8 million households will see their income cut. Gingerbread says that the cuts to work allowances mean that the average single parent will lose £800 a year, and some will lose £2,000. Figures from the Office for National Statistics suggest that 91% of single parents are women, so they are being disproportionately affected once again. Trussell Trust data from March shows that in areas of full universal credit roll-out foodbank use was up by 52%, whereas analysis of foodbanks yet to receive the roll-out showed the rise to be 13%.
“ongoing roll out of Universal Credit, the benefit cap reduction and the capping of housing benefits...directly threaten tenancies and risk pushing more people into homelessness.”
Other expert groups are demanding change, included the Resolution Foundation, Macmillan Cancer Support, Together for Short Lives—I could go on and on. The Scottish Government are using what limited powers they have to influence change, but as I have already said, we cannot continue to mitigate the mess forever.
So what needs to change? At the Budget, the Chancellor should start by investing to lift the benefit freeze, restore work allowances, scrap the two-child limit, lift the application waiting time, reduce the clawback from advances, sort the self-employed income floor, cut sanctions and restore the ESA work-related activity group and the disability components of UC. There should then be a halt to the roll-out until a fundamental review of universal credit is carried out, which should look at areas such as the digital-only approach, implicit consent, introducing split payments, rethinking the way people with mental health problems interact with the system and fixing the problems with the assessment period.
The problems with universal credit are fundamental and are causing misery, but they are problems that can be fixed with political will. This afternoon is the first test of that political will. We need to see the Government’s analysis and the papers should be released. When that confirms what we all know, this House should unite and force the desperately needed change.
I want to start my remarks by noting the presence of my right hon. Friend Mr Duncan Smith, whose decision to drive through this policy was very far-sighted. He was motivated by a desire to make the benefit system fundamentally focus on enabling people to get into work and to make sure that work pays. I think that is incredibly important, and I will say more about that later in my remarks.
I suspect that many of the Members who will speak in the debate will compare universal credit with some mythical universe of perfection where there are no problems. I was first elected to the House in 2005, in the aftermath of the introduction of tax credits. They had been introduced with a big bang, which was a disaster. Nearly half of the recipients were paid the wrong about of money—nearly £2,000,000,000 was paid in error. I had constituents who had been reassured over and over again that the money was theirs to spend, but then Her Majesty’s Revenue and Customs came to take it away. I had constituents in tears come to see me in my surgery. Let us not pretend that the legacy benefit system is perfect, because that is not what we are comparing universal credit with; we are comparing it with a legacy benefit system that is flawed and needs to be improved.
Does the right hon. Gentleman not agree that the problems with tax credit overpayments resulted from a low excess income level, which was then raised by the Labour Government to £5,000 a year, meaning that we did not get overpayments? The previous Government reduced it back to £1,000, so we are again seeing overpayments because people earn more. That is the problem: we had a Government that did listen and learn, and now we have one that will not.
I was in the House at the time, and I am afraid that the Government were pushed into action and threw huge amounts of taxpayers’ money around in a way that did not target the problem.
No, I have made that point and want now to move on to the design of the system.
For me, the biggest advantage of the universal credit system is that it gets rid of the hours caps on what people can earn and the reduction in the withdrawal of benefit. Neil Gray, who speaks for the Scottish National party, talked about taper rates and the reduction of benefit as you earn money. He is right about that, but what he forgets to say is that under the legacy benefit system that withdrawal of benefit could be up to 90%. It meant that it was not worth people—[Interruption.]
We do not have very much time to speak. I am afraid the SNP Front Bencher took up a huge amount of time, so I am not going to take any more interventions from the SNP. He spoke for longer than the official Opposition.
We have reduced the effective tax rate for people on benefits from up to 90% to 63%. It was 65% to start off with and we were able to reduce that.
The second important point is that for many people on benefits who had hours caps, jobs had to be designed not around the needs of businesses or individuals, but around the needs of the benefit system. My experience when I was a Minister in the Department for Work and Pensions was of meeting businesses that designed jobs around the needs of their business. However, when they took on a fantastic employee who did a great job and they wanted to increase their hours and offer that person increased opportunities to earn a living, that person had to say, “I’m terribly sorry. I can’t take that promotion or those hours because it will put at risk my benefits and I will not be able to guarantee a roof over our head for my children.” That has changed and that is a radical improvement.
For the record, I was one of those employers, and I got very frustrated that I could not give more hours to people working for me. On the taper rate, it is better than it was. Given the choice, I would restore the taper rate to 50%, where it was originally designed to be. Does my right hon. Friend agree that if we are going to have to choose wisely where to spend money, we should pump money into work allowances for those claimants most adversely affected? That is where we should focus money on in this Budget.
I agree with my hon. Friend that if the Chancellor is able to find some money—I always think it is very good to not try to write the Chancellor’s Budget in advance—the work allowances are an area to prioritise. I know that that is what my right hon. Friend the Member for Chingford and Woodford Green thinks, too. I am sure the Chancellor will have heard the call in the letter that he wrote and in the debate today from my hon. Friend. Getting rid of the hours caps is really important. It means that jobs can be better focused on individuals and that we give people the opportunity to get into work, progress in work, and be able to earn for their families.
The final point I want to make in the one-and-a-half minutes I have left—I will not take any more interventions, because it takes time away from other Members—is on the experience of constituents. I still get constituents writing to me about universal credit—of course I do. But in the past year, since we rolled out universal credit in my constituency, I get about half the number I once did. I now get about half the number of problems that I used to get with the legacy benefit system.
I also want to take this opportunity—I hope the Secretary of State can take this back to the Department—to say that of course when one is rolling out a benefit system to millions of people there will be errors, but the experience of my constituency staff is that when we raise those issues with the Department it looks at them properly and we get considered, detailed responses to solve them for my constituents. The members of staff in the Department are very focused on doing their best for our constituents. I certainly had the experience—I have heard the Minister of State say this as well—from when I was in the Department of frontline staff saying that the introduction of universal credit was the first time they feel they could do what they came to work at the Department for, which is to help constituents get into work, earn more money and be able to provide for their families. That is a fantastic thing and I urge the Secretary of State to continue to roll-out the benefit in a careful way.
I should not really be shocked. I have been an MP for long enough and I have heard the rhetoric from the Government for long enough not to be shocked. I have to say, however, that listening to the Secretary of State today, and the tenor of the interventions and comments we have heard from some Government Members, beggars belief. Their approach is utterly divorced from reality. This programme was supposed to be about so-called compassionate conservatism. If the Government really believed the rhetoric behind the programme when they set it up, that it was about making work pay and all those high ideals, they, and the Secretary of State in particular, would show some humility in their approach to the debate.
Clearly, the Secretary of State has made the political decision to front this out while our constituents are being forced to live in misery and face destitution. That is not compassionate, that is not humane and that is not moral. I urge the Secretary of State to reflect on the attitude she is displaying to the House, our constituents and the country in the way that she is approaching this debate, because it is not acceptable. It flies in the face of the rhetoric the Government themselves use. What they are doing today is unbelievable.
I will not.
It is not unusual for Government programmes to run into trouble. I am a member of the Public Accounts Committee and it is our bread-and-butter work every week to look at Government programmes that run into difficulties. A Government who cared about a programme —one that is not a vehicle for cuts and is not designed to force people to have less money than the system it is replacing—would actually engage properly and genuinely to learn lessons and make the programme better. Instead, the Government said that talk of cuts was somehow fake news. The Secretary of State then had to admit that people are going to be worse off. We have heard the figures of £200 a month and £2,400 a year being mooted. That is a staggering sum of money to lose every year for the working poor and the vulnerable in our community. We know that the self-employed will potentially be up to £2,500 a year worse off compared with those who are not self-employed under the new system. These are the realities that the Government cannot deny. That is not fake news; that is just the truth.
The Government and the DWP said to the National Audit Office—this was recorded in its most recent report—that the organisations at the coalface of helping our constituents to deal with the troubles they face because of universal credit, whether the Trussell Trust, other people who run foodbanks or local government, which is now facing much higher levels of rent arrears than previously, are motivated by a desire to lobby for changes rather than accurately reflect what is happening on the ground. That is a disgraceful attitude for the Department to take towards organisations that, yes, may well have a different vision for how they think the social security system should work, but are absolutely telling the truth about the destitution and difficulties our constituents are facing.
I invite the Secretary of State and any of her Ministers to come and spend a day in my constituency office and to see the explosion in our case load that has been created by the roll-out of universal credit. My staff spend most of their time every single day on the phone trying to sort out difficulties arising from universal credit. I shall highlight just two cases we have had recently, the first regarding delayed payments. The Government say they are taking action on that, but I have a constituent who has not received any money since
I thank the hon. Lady for taking an intervention. What I say to her, and I have said this before in the House, is that if there are individual cases Members should bring them directly to Ministers. [Interruption.] I am sorry, but that is not what happens. What we hear are general comments. After this debate, if she is willing, I will talk to her directly about the cases that are affecting her constituents.
I wish it was just one case. I would happily bring them all to the Minister and he can tell me how I should respond to my constituents, but my experience of engaging with the Department on this matter is not a happy one. If he wants to become the constituency caseworker for the whole of the House for universal credit cases, he will be a very busy man. In fact, it would be easier for him to improve the system and fund it properly so that people are not forced into destitution in the first place.
There is a particular difficulty in my constituency relating to constituents with autism and other mental health conditions moving on to universal credit, often because they have failed the assessment—they had previously been in receipt of employment and support allowance—having not been supported as they tried to navigate a very complicated online system. The support that is available is simply not enough. I invite the Government and the Minister, in that spirit, to revisit some of those issues, because they are not ones that he will be hearing from me for the first time.
In this context, it beggars belief that the Government wish to continue with managed migration. There is only one fair, humane and compassionate thing that they could do for all the people facing difficulty under the system: stop the roll-out and try to genuinely engage and fix the problems of universal credit right now, before they move on. Most importantly, however, they need to fund it properly, because this is a vehicle for cuts—they know it, we all know it, and our constituents are paying the price for it.
My constituency has been operating the universal credit full service since January this year, so I like to think that I know something about what is being delivered at a grassroots level and the effect it is having on my constituents who claim it.
Let me begin by saying that UC is not perfect, but nor is any benefits system that we have ever had in this country. UC replaced a legacy system that was deeply flawed and offered no incentive for people to work. It is true to say that despite a number of improvements that have been made to UC since its roll-out started, it still has a number of faults, which I will come to later. However, it is certainly not the disaster caricatured by right hon. and hon. Members on the Opposition Benches. For some time, the Labour party has been busy whipping up opposition to UC, criticising it at every opportunity. These continual criticisms are not only a metaphorical two-fingered insult to the incredibly hard-working staff in my local DWP offices—they are delivering an excellent service to my constituents—but are misleading the public and frightening some very vulnerable people.
Of course, the introduction of any system can be problematic. I, too, had concerns about how it would affect people in my area when it was rolled out, so I visited my local jobcentres and sat down with the staff to go through their plans with them to ensure that none of the claimants moving from the legacy system to UC would be disadvantaged. I was impressed by the commitment and enthusiasm of the staff and was satisfied that they would be prioritising the most vulnerable claimants.
At the time, I urged staff to contact me should they come into contact with anybody they were unable to help because of the system, and I promised to take up those problems with DWP ministers. No such problems have been referred to me by the jobcentres.
Like my hon. Friend, I went along to the Jobcentre Plus in Cheltenham and I had the same experience. Staff were enthusiastic about the benefits that it was creating, and crucially, people in work were, on average, receiving an additional £600 a year. Does he not agree that that important factor should be weighed in this conversation?
Yes, that is an important factor. I also point out that Opposition Members often quote concerns raised by citizens advice bureaux about the impact of UC on local people. Well, I visited my local citizens advice bureaux and suggested that they work closely with my office to identify people with a problem, so that they could be helped. I did the same thing with a local church group that contacted me expressing concerns about UC. In addition, I used social media to ask people to contact me if they were facing difficulties because of UC, or if they knew of somebody facing difficulties. I have had only a handful of people referred to me since we went live in January and all the problems raised were resolved quickly by my staff.
The Opposition have also made much of the use of food banks, and I want to touch on that issue. My first experience of food banks in my constituency was when our local steelworks closed down and some workers were left without any money to buy food for their families. There was a long delay in getting those people the financial help that they needed and to which they were entitled. That delay did not arise under UC, but under the legacy benefit system. We hear repeated claims from Opposition Members that the transition to UC has forced more people to use food banks, so to check their claims, I went to visit a food bank in my constituency last week to find out for myself. [Interruption.] The volunteers who run that food bank are wonderful people for whom I have the utmost respect, as are the volunteers in the other food banks in my constituency.
I hope that my friends in the Opposition will forgive me for saying this, but everybody in the Chamber genuinely wants to get UC right, and I would rather that Opposition Members did not belittle my hon. Friend, who is genuinely trying to do his best to find out what is happening in his constituency.
As my hon. Friend will understand, the claim is being made that some people who use those food banks were forced to do so because of the difficulties faced when claiming UC. When I pressed them about those difficulties, they said that one was the requirement for claims to be made online, which was also raised by the shadow Secretary of State. Some people claimed that they either were not computer literate or did not have access to a computer.
I will not give way again because I do not have time. I pointed out that such people could visit the local jobcentre, where they would be able to use one of the bank of computers installed there. In addition, they would be helped to navigate the system by a member of staff or a volunteer from one of the voluntary organisations that are now based in the jobcentre.
Of course, there were people who faced other difficulties, so I asked the food bank to provide me with details of those people so that I could get somebody to contact them to investigate and take up their cases with the DWP. When we received that information, we discovered that many of the people were living in a local hostel that provides temporary accommodation for homeless adults. A member of my staff contacted the people concerned and it soon became obvious that some of them suffered from underlying problems that affected their ability to manage the transition to UC, and that forced them into using the food bank. Those problems included drug addiction, alcoholism, mental health problems, an inability to manage money, or plain fecklessness. Automatically blaming their problems on UC, which is what the Opposition appear to be doing, is doing those people no favours. If somehow the delivery of UC could be made perfect overnight, that would not make them any less dependent on drugs or alcohol. It would not solve their mental health problems. It would not help them to manage their money better and it would not make them less feckless. Of course, we have to do something to help those people, but the truth is that they would still have the same problems, whatever benefits system was put in place.
Luckily, such people are in the minority. However, there are some people who have genuine concerns, which leads me nicely on to the faults in the system that I mentioned at the beginning of my speech. My No. 1 concern is the five weeks’ delay in the receipt of the first benefit payment made under UC. I urge the Department to look at whether there is a way in which that can be phased in over a longer period. Of course, people can get an advance payment, but some people are simply unable to manage that money well enough for it to last five weeks, so again, I ask for that to be looked at. I know of claimants, by the way, who spend the money in the first week and then have to resort to food banks for the remaining weeks.
The second problem is the repayment requirement for an advance payment. That is something else I would like the Department to look at to see whether it could be done over a two-year, rather than a one-year, period. The third problem is that under the legacy system, claimants were provided with a letter confirming what benefits they were receiving. Under UC, that is not provided and I would like that to be changed if possible. The final thing, which I have taken up with the NHS, is that there is no box for UC on the back of prescriptions, and I would like that to change as well.
Universal credit is causing undeniable and massive hardship in my constituency. I see it in my advice surgery, and we see it in the 34% increase in food bank usage in the Wirral since the full roll-out of universal credit. When we talked to the Trussell Trust, which provides the 15 food banks in the Wirral, it said that half of all the usage of food banks in the area is a direct result of the problems with universal credit.
The DWP is under huge pressure to deliver a huge change programme, which was badly designed to begin with and which the previous Chancellor took huge amounts of money out of—there were £4 billion-worth of cuts. It is trying to deliver a change programme and save vast amounts of public money at the same time, while visiting the effects of this disaster on some of the poorest and most vulnerable members of our community.
It does not take long to realise that this benefit is in trouble when we see two former Prime Ministers, Gordon Brown and Sir John Major, both giving very stark warnings about it. Gordon Brown has predicted civil unrest if something is not done, because the benefit is too complex and causing huge suffering. As we have heard from my hon. Friend Shabana Mahmood, people already under financial pressure are being expected to absorb the loss of £2,400 a year, or £200 each month. John Major, the ex-Conservative Prime Minister, has said that
“that degree of loss…is not something the majority of the British population would think of as fair, and if people think you have removed yourself from fairness then you are in deep political trouble.”
The Government are in deep political trouble with the roll-out of this benefit, and they know it. If they have nothing to hide, and if we are to believe the scarcely credible comments from Conservative Members, who seem to think that absolutely nothing is going wrong, they should vote to allow these papers, which the motion seeks to have published, into the public domain so that we can see the advice that they have been given, including the costs and benefits of the roll-out, and the analysis that seems to make the Conservative party so complacent.
The hon. Lady has said that many people on the Conservative Benches seem to think there is nothing wrong with universal credit. Could she indicate just one of them, for the benefit of the House?
I am tempted to say the Secretary of State, who has just left the Chamber and so is not listening to the rest of the debate. There is enormous complacency already evident in this debate on the Conservative Benches, perhaps because they do not have people in tears in their advice surgeries trying to get by with absolutely no money and no prospect of getting any.
The National Audit Office itself has said that more than half of those who apply for this benefit do not complete an application form on the first time of asking. That increases the delays. It is almost as if the benefit has been designed to put people off. In my constituency, I have recently had a case where somebody was advised in the jobcentre to migrate themselves voluntarily on to universal credit. They were told they would be eligible for £935 a month, but after the deductions, it was £513. By following the advice given to them by somebody in the jobcentre, they have made themselves much worse off. I could go through many such cases if there was time.
When people object to what is going on with universal credit, they have to go to a tribunal, but tribunal waiting times have increased massively. A recent written parliamentary answer told me that there was a 16-week waiting time in the north west, but a constituent has just received a letter saying there is a 33-week waiting time. Even if someone appeals against a dubious decision, they have to wait, with no money, for more than half a year. This is no way to treat the poorest and most vulnerable people in our society. As the previous Prime Minister, Gordon Brown, has said, this is turning our social security safety net to dust, leaving people reliant on charity rather than the social security system. That is the baleful legacy of this Government.
I wrote a speech for today, but I am not going to stick to it. I must be honest: this place absolutely stinks today. This debate concerns some of our most vulnerable people. [Interruption.] I am sorry? If you want to make an intervention, make an intervention, do not just shout something angrily that I cannot hear. Some of the behaviour here has been appalling. I indicated to Ms Eagle that she made something up to score a political point, on a subject concerning some of the most vulnerable people in this country, and it absolutely stinks.
How are we going to reform a welfare sector that in cities such as mine sapped the ambition from a generation of young people who wanted to go out, build a family—[Interruption.] Would the hon. Lady like to make an intervention?
I am more than happy to make an intervention, although I am rather sorry I gave way to the hon. Gentleman during my speech. What I see in my constituency is a benefits system—universal credit—in serious trouble and causing serious hardship, and listening to Conservative Members pretending nothing is wrong is not a good use of time.
With the greatest of respect, I have listened, and nobody has said that; nobody believes that universal credit is perfect. People in this House can keep repeating this stuff—to make themselves believe it, to get a clip for social media so they can say they have had a rant at the Tories—but it is poor politics and it has to change.
No, I will not give way to the hon. Gentleman. The other thing I will not accept in this House is the illusion that Conservative Members come to work to keep the poor poor and to feather their own nests. You gave the impression that nobody on the Conservative Benches cares about getting people out of poverty, but that is simply wrong. Individuals like me would not speak up against universal credit—and so become the lightning rod for abuse whipped up by some of the creatures on social media—and do something about it simply for our own ends. We would not be able to change this policy if we listened to you—
Order. Obviously this debate is heated, but it is important that the hon. Gentleman not refer to other hon. Members using the word “you”. If you use the word “you”, it is to me.
The thrust of my speech was an appeal for Conservative Members to listen to the experts. I listed dozens for them to listen to. Are they scaremongering?
If any Member assumes that individuals on the Conservative Benches are driven by anything other than the evidence, they are seriously mistaken. I absolutely accept that there are groups in this sector working night and day that agree that we need to do more on things such as taper rates and work allowances, and we on the Conservative Benches will keep pushing for that, but the assertion that we do not see any of this evidence in our constituencies and act on it is just plain wrong. We have plenty of people coming into our surgeries talking about universal credit, but instead of launching into a diatribe about how the Conservative party is attempting to keep people in poverty, we should look at the things that this Government have done, such as the reduced waiting times and the landlord portal—things that are actually making a difference in places such as Plymouth.
Does the hon. Gentleman not remember that it was a Conservative Government who introduced universal credit, including the taper rate and the work allowance, a Tory Prime Minister who cut £4 billion from it, and a Conservative Secretary of State who in recent weeks admitted that more than 1 million families will be £2,400 a year worse off? Does that not worry him?
The hon. Gentleman will be as aware as I am that people in this country are absolutely sick of Labour and Conservative politicians blaming each other for the situation we are in. The legacy benefits system sapped the ambition of a generation of young people in cities such as mine to go into work, to get a job and to build a family. That system needed reform. You cannot marry the idea that you should bin universal credit with a commitment to improving the life chances of our most vulnerable constituents: the two are not intellectually compatible.
We have heard about a lot of the problems with universal credit—
No, I will not give way any more. I have been on my feet for far too long already.
We must be realistic. When it comes to the most vulnerable in our constituencies—and I have plenty of them in Plymouth—the single biggest factor in improving their life chances, which should be the driving motivation for every single individual in the House regardless of political background, is having a job. Whether we like it or not, unemployment is at record low levels in this country, and employment is at record high levels.
No, I will not give way any more.
Have we more to do? Of course we have. Am I happy? Do I think that this is an area in which we can reduce our financial commitment? Absolutely not. Do I think that the Conservatives can come up with a policy and not follow it through with funding? Absolutely not. I will continue to lobby, along with my colleagues, to ensure that, in his Budget, the Chancellor reinvests some of that money so that the policy works. Ultimately, however, this should be one of the defining principles of a modern, compassionate Conservative party. People out there in the country want welfare reform. They do not want to pay into a welfare system that does not encourage people to work, and, ultimately, they pay our wages. It is their politics, not ours. They want welfare reform, and we have a duty to deliver that.
Can we consider a different group, those with terminal illnesses such as motor neurone disease? At present, they are required to turn up at a jobcentre and speak to a job coach about universal credit and their work capability. Despite being terminally ill, they are still expected to talk about their work aspirations. Will the hon. Gentleman support my Bill to remove that?
Conservative Members deprecate the personal experiences of any individuals who have been at the wrong end of unacceptable circumstances, and I know that Ministers will work as hard as possible to ensure that people such as that are looked after. But let us get away from this whole idea that Conservative Members have no interest in improving the lives of the most vulnerable and that all that lies with the Opposition, because it is rubbish.
Order. There have been so many interventions that speeches have lasted much longer than five minutes. After the next speech, I shall have to reduce the speaking time limit to four minutes.
The implementation of universal credit has been an object lesson in how not to carry out social security reform. A system that was meant to be fully implemented by April 2017 will not now be fully operational until December 2023, but some of us doubt that even that deadline will be met.
The evidence that we have seen is damning. The National Audit Office says that universal credit has been too slow to roll out, causes hardship and is not delivering value for money. Some claimants waited eight months for payment In 2017, 25% of new claimants were paid late. A fifth of those were the neediest, and waited five months or more. Eight years in, only 10% of claimants are in the system, and the administrative cost is currently £699 a claim—four times as much as the Government intend to spend.
This type of chaos, and the hardship that results, is certainly what we have experienced in Liverpool. I will give just one example, although there are many more in my caseload. My constituent Kelly Redmond has three children, and her mother, who has chronic obstructive pulmonary disease and dementia, lives with her. Tax credits formed an important part of her income. On
Her Majesty’s Revenue and Customs cancelled Kelly’s tax credit claim, and told her to claim universal credit. The DWP said that she could not claim universal credit because it had not been rolled out in Liverpool, and told her to claim the tax credits that HMRC had just cancelled. HMRC told her that she could not claim tax credits for six months because her partner was claiming universal credit. It then told my office that it had reinstated her tax credit claim, but it never did. The DWP promised my office on numerous occasions that the issue would be sorted out, but did not sort it out. By the middle of August, the DWP hotline was telling me that the DWP service innovation team and the HMRC transformation team were trying to untangle the mess, and that it would be sorted out by
Meanwhile, after three months of this chaos, Kelly had been deprived of much of her income and driven into extreme poverty. She was unable to pay for electricity, so her mother, who is supposed to use a nebuliser four times a day to ease her COPD, was frequently unable to do so, and she could neither clothe nor feed her children. The Mayor of Liverpool and local charities were the only people to whom she could turn for help. Only the Mayor’s citizens support scheme, which provided an urgent needs award and a home needs award, provided some relief.
The children were only able to get the school uniforms that they needed because of a grant from the mayoral hardship fund. The family were only able to eat because a local charity, Can Cook, provided three weeks of food for them for nothing. Without Can Cook and the Mayor of Liverpool, the family would literally have starved. The children would not have been able to go to school in appropriate uniform, and Kelly’s mum might be facing even more deterioration in her health because of her inability to pay for electricity. Destitution was certainly beckoning. Instead, Kelly has to cope with severe debt and huge amounts of extra stress.
So far, only 13% of families in Garston and Halewood who will be eligible are receiving universal credit. There are 6,000 more families on legacy benefits who will be subjected to the same nightmare. Only 10% of the children in households in my constituency have been put on universal credit, which means that 5,600 households with children may be about to go through that nightmare. My constituency is about to experience a tsunami of further hardship and poverty because of the roll-out of universal credit. Last year, the Liverpool citizens support scheme and the mayoral hardship fund spent £25 million on supporting homeless people and those in immediate need, but it will not be possible for that to continue on the scale that will be necessary if the roll-out goes ahead, and there will be nowhere else to turn.
It is not enough to slow the roll-out; universal credit must be scrapped. It will never work. It will punish the poor and create more destitution. Any Government who seek to continue with this reform when it is not working and cannot work—when it is not meeting and will not meet its objectives—should be slung out of office, and the sooner the better.
Let me say at the outset that I do not claim that everything about universal credit is perfect, or that everything has gone according to plan. I think it is inevitable that such a huge reform will involve issues that will need to be dealt with. To suggest that it should be scrapped, however—as Maria Eagle has just done—is to risk losing the significant benefits that it has brought about. We should not be in the business of throwing the baby out with the bathwater, but that is precisely the attitude of those who say that this whole benefits system should be scrapped.
It is worth noting why it was necessary to bring in universal credit and to consider where we have come from. Under the last Government, we had a system that was confusing, bureaucratic and unfair, and ensured that people did not receive the benefits to which they were entitled. Indeed, that was factored into the budget of the DWP, which knew that the system was so complicated that it would not have to pay out the money that it would otherwise have had to pay out. Those arrangements also led to the worst aspect of the system, which was that it prevented people from working.
The hon. Gentleman is telling us about the faults of the previous system. Single parents are particularly hard hit by universal credit: cuts in the work allowance mean that the average parent loses about £800 a year, and some lose up to £2,000 a year. Given that 91% of single parents are women, this system discriminates hugely against women. Does he agree that that is unfair and should be addressed?
I do not agree. There have been these transitional protections that we need to have in place. I am not saying that every aspect of universal credit has been correctly implemented—I do not think anyone is claiming that—but I think it is right that we try to ensure that people are better off under this system and that it is a fairer system. Most important, as I have said, is that it should enable people to work.
Under the previous system, I lost count of the number of times people said to me, “I cannot afford to work.” They used to say that they could not possibly get a job even though they would love to do so because they would lose their benefits as a consequence. That was as frustrating as it was wrong. It trapped people into staying on benefits and ensured that people got out of the habit of working. The best way out of poverty is through work and we need a benefits system that allows for that, and we did not have that under the previous Administration. What we saw was excessive tinkering, which added to the confusion surrounding benefits. Myriad different types of tax credits were introduced and abolished during that time; it was described at the time as being like a gardener going around pulling up plants to see if the roots were still there. That is how complicated the system was that we had to take over. We needed change and we had the courage to bring about that change. We should take the credit for having done so.
The strength of universal credit is that it simplifies things and encourages work. Benefits should mirror the working world. That is why it is right that most UC payments are monthly; most salaries are paid monthly. It should provide a way back into work and not provide a way of life.
One major test for UC is whether it is helping people get back into work. The answer to that is an emphatic yes. We have seen huge increases in employment. Youth unemployment is at its lowest rate ever and wages have exceeded inflation every month for the last seven months. Part of the reason for this is that we have a benefits system that facilitates work. We were told—I think it was Ed Balls who said this—that our policies would result in unemployment going up by 1 million, but the contrary is the case: employment has gone up by 3 million as a consequence of our policies. No one is claiming that the system is perfect—I am certainly not—but it is a massive improvement on what we previously had, so is well worth keeping.
One of the reasons we have low unemployment in the UK, while it is much higher in other countries, particularly on the continent, is that we have a benefits system that allows people to get back to work. Yet some people inexplicably say that that system should be scrapped.
I will cut my comments short now, as I am running out of time. Care and consideration are needed during the rest of the implementation of UC. It needs to be done and it needs to be adequately funded. I ask the Minister to be cautious in doing this. We must not be complacent about it, but we should not scrap UC, as we have been asked to do.
The Government’s 2010 White Paper said:
“The Government is committed to ensuring that no-one loses as a direct result of these reforms. We have ensured that no-one will experience a reduction in the benefit they receive as a result of the introduction of Universal Credit.”
That is a complete contrast to the Secretary of State’s admission to the Cabinet just two weeks ago, when she allegedly acknowledged that people could be £2,400 worse off. I may have missed it, but I have not heard a denial of that. This has happened because of the former Chancellor’s—now editor or something, with a number of other jobs—£3 billion raid on the UC pot in the 2015 Budget. The Budget on
My second ask is that the Secretary of State considers the issue of rent arrears. St Leger Homes, which manages 21,000 homes for Doncaster Council, advises me that there are over 2,400 council tenants on UC in Doncaster. Over three quarters of them are in rent arrears. UC has added another £190 to the average person’s rent arrears since it was rolled out in Doncaster in October 2017. Ministers can say that those people were already in arrears, but I do not think we should dig a hole and keep on digging; they must deal with the problem that UC has compounded this problem not only on the tenants, but on the social housing landlord, who relies on those rents to help support repairs and, we hope, the building of new social homes.
St Leger Homes also told me that when it slightly changes the rent across the board, each and every household on the list has to inform the DWP; that is another issue that affects arrears. This then creates extra work for the landlords who have to confirm the changes. The DWP has created a “tolerance” limit, which means that if the rent changes by just a little the landlord does not need to confirm the tenant’s rent change. That is welcome, but the system worked better before. During UC’s “live service”, landlords could upload a schedule of rent changes, so the DWP knew automatically whose rent was going up and when. Now that has gone. Why cannot the Department allow organisations such as St Leger to let it know of changes and allow a data transfer so that technology can play its part, thus relieving individuals of the need to inform the DWP, with all the errors that can result?
My third ask is that the Government outline their next steps for universal support. On Monday, I asked the Minister to tell us what resources citizens advice bureaux across the country will receive and when. I received no reply. Doncaster Council’s chief executive, Jo Miller, advises me that it had no warning of the changes made to universal support prior to a press release from the DWP. It is essential that Citizens Advice, working with others, knows exactly what the resources are now, so it can better plan to ensure that, whatever happens with the discussions in this House, people who are already on UC get the support they need if it continues to be rolled out. First and foremost, however, the Government must take action in the Budget and put the money back in that was cut.
I want to focus on the principles behind UC and why it has been brought in, as that is the key to understanding how we can ensure UC works as it was supposed to. Present changes and issues with the roll-out and the detail of implementation are of course important, but they should not take attention away from the core principles of UC and how it transforms lives.
I was here in the Chamber in March 2011 when my right hon. Friend Mr Duncan Smith introduced the Welfare Reform Bill in one of the most passionate speeches on addressing poverty that this Chamber has heard. He said at the very beginning of his speech that day that the reform of welfare was needed because, despite the economic growth and job creation between 1992 and 2008, there was a group of working-age people that was effectively left behind.
I remember the situation back in 2010 when the coalition Government were formed: there were too many households who were not being supported into employment; there were complexities with the legacy benefits; there were cliff edges faced when people left benefits and went into employment; and there were cases of intergenerational poverty in this country, with children being raised in households where two or three generations were affected by periods of worklessness. And, of course, we had to do more to change that, and my right hon. Friend was right at that time to pursue a holistic approach to tackling poverty and helping people get back into work. UC was a response to a system where at the peak of the Labour boom there were 3 million people on out-of-work benefits, 1 million of whom did not work a day for many years under a Labour Government because they were caught in a welfare trap and written off. A great many were on incapacity benefit as well, and things had to change.
The principles of UC are clear. It is intended to simplify the benefits system, reduce complexity and support more people into employment and into higher paid employment. UC was needed to help get people work-ready, and transitioning people on to UC helps understand and identify the underlying financial difficulties they face.
We have heard from Caroline Flint about issues with withdrawal rates and taper changes and what happened in 2015 and 2016. I was in the Department at the time, and my right hon. Friend the Member for Chingford and Woodford Green left the Government because of what happened when we fought back and presented the Treasury with distributional analysis showing the impact the cuts would have on households and individuals.
It is important that we now get this change right. I do not believe in scrapping UC at all, but we need the modifications to deliver the life-changing support and the opportunities that the benefit was designed to provide. Yes, my right hon. Friend the Secretary of State has gone through the process of testing, learning and rectifying the problems, but we must now go back and invest in the right way to modify the changes that happened. We must bring back the choice; Governments have choices and this Government now have the chance to support the principle of making work pay and support independence and dignity in work.
No, I will not. I do not have time.
We must also ensure that we fully provide the ladder of opportunity to give a foothold to people and families who want to work and support them into work, as well as addressing the challenges in our welfare system. The task of this Government and the Treasury is well-versed, and I know that the Minister will not have to cover this point later. We must now ensure that we revert to the principles and purpose of universal credit, to bring back the independence, dignity and value of ensuring that work fully pays.
Priti Patel is absolutely right to say that change is urgently needed, and I hope that her Front-Bench colleagues will have heard that. Of all the many flaws in universal credit, the worst is the five-week delay between claiming and being entitled to benefit. Ministers can justify this—the Minister had a go at doing so again yesterday—only in the case of people who have just left a monthly paid job and therefore have a month’s salary in the bank. The reality is that a very large number of people do not have a month’s salary in the bank when they make a claim for universal credit. Many are paid weekly or on zero-hours contracts; for all sorts of reasons, many are simply not in the position to have that much money in the bank. I spoke to a claimant on Merseyside at a time when the delay was even longer than it is now. She told me that the jobcentre had sent her away to live on water for six weeks. She reached the point at which she attempted to take her own life. Five weeks without support is not a realistic or acceptable feature of this benefit.
I thank the right hon. Gentleman for raising that important case. Would his constituent not have been eligible to receive an advance payment, had she applied for one? They are now available at 100%.
She was not told about the availability of an advance payment. They are now being better publicised than when she made her claim, but the problem with advance payments is that people are being plunged into debt right at the start of their claim. For many, it is impossible to get out of debt once the system has forced them on to that slope. The result is that they have to go to food banks. We know that food bank demand rockets when universal credit comes in, because people get behind with their rent and other debts mount. I say to Conservative Members—many of them are fully aware of this—that this is not the way to treat our fellow citizens. Universal credit must be changed to stop this happening.
I appreciate the right hon. Gentleman giving way, not least because I might run out of time and not able to say all that I want to say in my speech, including suggesting that it might be a wiser idea to make the advance payment into a first payment. It could be a bit like when people who do not pay their last month’s rent do not get their deposit back. We would look to take something back if anything was due, right at the end of the claim. Does the right hon. Gentleman agree that we should turn the advance payment on its head so that it is no longer a loan that we need to take back?
The hon. Lady makes an interesting suggestion, and I hope that her Front-Bench colleagues will listen to it. We certainly need urgent change on this point.
Ministers have, perhaps understandably, developed a tin ear to the voices that they should have been listening to over the past eight years, as the warnings about what they were getting into were being sounded. They have not been listening to those warnings, but I hope that they are at least listening to the Residential Landlords Association. They might have heard Paul Cunningham, the chair of Great Yarmouth Landlords Association, on the radio last week, as I did. He said that the majority of landlords in Great Yarmouth were now unwilling to let property to universal credit claimants because they inevitably got into arrears with their rent. He said:
“It is a social experiment that’s gone wrong”.
Of the Department for Work and Pensions, he said:
“They remain in denial about the system”.
His concluding point was that
“it doesn’t make business sense to let a property to a tenant who has no idea of when their claim is going to be processed or how much money they are going to get, and who will invariably end up in arrears”.
That is the reality of the experience of private landlords, let alone the organisations representing claimants that have been making submissions to the Government.
Among the many representations that the Government have received about managed migration, they will have seen the report prepared by the Resolution Foundation, and I hope that they have looked at it carefully. A lot of the submissions expressed deep foreboding about where we are heading with the managed migration programme. The Resolution Foundation made the following recommendation, which I commend to Ministers:
“and the Work and Pensions Committee. We suggest this should be that 90 per cent of new claims are paid in full and on time”.
The recommendation—an excellent one—is that managed migration should not commence until that level of service can be achieved, and I hope that the Minister will be able to respond to that when he winds up. I commend that idea to him.
It is clear that we are heading into very difficult territory if this goes ahead on the current basis, as is still likely. The Conservative party has been warned about what happens to parties when they go ahead with such projects, given the prospects for universal credit. There is now, however, a chance—there is a moment here—for Ministers to fix these problems. They could take the necessary action; the Chancellor could do so in the Budget on Monday week. I urge them to stop the roll-out until these problems are fixed and not to press ahead in the way that is being proposed. Universal credit was a perfectly sensible idea. Unfortunately, its implementation has been very badly handled. The problems went right back to the start, when the July 2010 Green Paper stated:
“The IT changes that would be necessary to deliver”— universal credit—
“would not constitute a major IT project.”
How wrong they were, sadly.
I am happy to follow Stephen Timms. I agree with much of what he has said and with his constructive suggestions for making this work. That is where I want to start my speech. I still believe that this is the right thing to do. Universal credit is the right sort of benefit system. It replaces a much more complicated system that people did not understand and found really hard to work with, but it is important that we get it right and do not start rolling it out for even greater numbers until we are sure that it will get the right amount of money to the right people at the right time. I agree with the right hon. Gentleman’s point about the Resolution Foundation’s recommendations, although I am a little surprised that it asked for only a 90% accuracy rate. That implies that we are happy to have 10% of people who roll over to universal credit getting the wrong amount of money on the wrong day. I would hope that we can put in place a much more reliable system than that.
I agree with the Government’s approach on test and learn. I can remember being on the Work and Pensions Committee when the full roll-out was originally planned for 2014, which drifted by a little while ago. I think we are now aiming for a nine-year roll-out. However, it was absolutely right that we did not press ahead and roll this out so fast that we ended up with hundreds of thousands of people taking on huge amounts of debt because they were being given the wrong amount of money. We saw that happening with tax credits and we do not want to repeat it. However, test and learn cannot just be a software thing. It must also be about the design of the system and the way it actually works. If it becomes plainly apparent, as we carry on the roll-out, that things are not right and that people are not getting the amount of money they are entitled to at the right time, let us fix it and remove the rough edges. In that way, we will end up with a far better system, and people will not be in debt when they do not need to be, with all the consequences that that would have.
I support what the Secretary of State has been asking for from the Chancellor. We saw some interesting ideas being leaked yesterday, and I think that most of us in this House would welcome most of them as a great improvement. Let us build on the reform that we put in place a year ago to allow people to keep an extra two weeks’ housing benefit. Let us at least add employment and support allowance to that, to ensure that people do not have a gap in their income right at the start. It is just not right to expect people to live for five weeks without any money if they do not have a redundancy paycheque or a final paycheque in the bank. Let us fix that and try to find a smoother transition. That would cost a significant amount of money, but in the great scheme of things, it would be a tiny fraction of the overall £160 billion a year welfare bill. It would not break the bank, and if that is what we have to do to get this right, let us do it.
Does the hon. Gentleman agree that the indifferent broadband coverage in remote constituencies such as mine does not help the roll-out of UC and that we should try to tick that issue off before we go any further?
That is probably a debate for a different day. Sticking with universal credit and managed migration, as I said to the Employment Minister yesterday when he referred to moving people over, that is exactly what we ought to do, particularly for vulnerable people who may not get the process right. We have all their information. We have all the details we need. Let us move them seamlessly from the old benefit on to the new one. We should not expect them to do that for themselves—that just risks them missing out because they have not opened their post, they do not understand it, or they are too scared to do it. There is no need to add that stress to their lives. Moving them over will not cost anything at all; it is just a far better way of the Government using the system.
Finally, the motivation for UC was to make it absolutely clear that work would pay. That is what the staff in my jobcentres really value. It is a simple system. They can explain how it works and show people that they will always be better off in work. The problem that has arisen from the savings that the previous Chancellor introduced three and a bit years ago is that it is not entirely clear how we can demonstrate to some groups of people that they will always be better off in work—lone parents and second earners are the two cases most often cited—so let us put clarity back in the system. If we want this welfare change, which we all support, to work, the fundamental promise that people will always be better off in work must be made demonstrably clear to them. Let us put money back in and get the work incentives right. That way we will have a system that we can make work.
We are having this debate because of one man’s vision to radically reform the benefits system. Having lost the Conservative party leadership, Mr Duncan Smith decided to focus on the challenges facing the poorest in our society. For that, he deserves credit, not derision. He saw for himself what many of us came into politics to address: the horrendous social injustice and inequality that scar too many of our communities, the intergenerational disadvantage, the wasted talent and the lack of hope and dreams that hold back too many of our fellow citizens. The right hon. Gentleman decided that one of our top priorities needed to be the simplification and streamlining of people’s benefits, which would support them more effectively and remove some of the disincentives to work—an objective that has been shared by many progressive reformers since the welfare state was created.
Where did it all go wrong? First, it is not possible to be a champion for social justice while presiding over a hostile environment for those who were the greatest victims of social injustice. Secondly, to successfully implement radical whole-system reform significant extra resources are always required up front, both to manage the organisational transition and to address unintended consequences. Those resources were never made available. Instead, budgets were cut.
Like many right hon. and hon. Members, I have seen for myself the human impact of the failings of universal credit, and the roll-out in Bury has been only limited so far. One constituent works for the local authority. She sometimes gets two wage payments in one assessment period, and the rigidity of the assessment period means that she does not get universal credit when that happens. That then affects the housing element that she may have received. She is in private accommodation, so the landlord will not tolerate any arrears, causing extreme financial pressures in the months when she has to pay rent. She is not able to budget in the same way as with tax credits and cannot access any other loans. Consequently, she is considering payday lenders.
Another constituent is single and lives with her six-year-old child in privately rented accommodation. She was transferred from income support to universal credit around the end of 2017. She suffers from dyslexia, anxiety and severe depression. When she was transferred on to universal credit, she was not given the option of claiming employment and support allowance. She was asked to attend a universal credit interview outside of our area, which took two hours to reach by three buses and the same in return. When she got there, a piece of paper was pushed under nose, and she was asked to read and sign the document. The same woman was asked to attend a working well interview. She used the sat-nav on her mobile to find it, but unfortunately her phone died. She went home immediately, and her friend phoned the DWP, but she was still sanctioned.
Our society should always be judged by how we support the most vulnerable to have a decent quality of life and empower those who are able to exercise maximum power and control over their own lives. Universal credit is failing in both respects. The Government have behaved appallingly in denying the scale of the impact of their failed policies on our constituents. They must now take full responsibility and stop the distress and hardship that their incompetence has caused, so that thousands of others are not affected in this way in the future.
I am pleased to be able to contribute to this debate, and it is a joy to follow Mr Lewis. My experience of the roll-out of universal credit in my constituency bears no resemblance to the picture painted by the Labour Members. Now, let me say that universal credit is not perfect, and there are still issues that we need to correct, but it has been a positive thing overall that is achieving the intended outcomes for those who are claiming it.
Reform of our benefits system was long overdue. I saw the impact in my constituency, which has some of the lowest-paid people in the country and where people were locked into a benefit system that abandoned them to being out of work and to not being able to earn more by working more hours. Basically, it provided a trap in which they lost their aspiration and their enthusiasm for work, because they saw so many people on unemployment benefits who were better off than those who were in work. Universal credit has begun to change that, and it is absolutely the right reform at this time.
The feedback from the DWP staff in my constituency, both at the Jobcentre Plus and the UC processing centre—it covers the whole south-west and now some London boroughs because the staff there have performed so well that they are being given other areas to process—is that UC is working well. The staff say that it is a simple system. They love it, and claimants like it. However, they also told me that one of the problems is all the scare- mongering, primarily from the Labour party. Claimants come in fearful and terrified of what UC is going to mean for them. Then, when staff sit down and work it through with them, they suddenly realise that UC is not like the terrible picture that is being painted of it and their experiences are actually positive.
As for evidence that that is happening, the Jobcentre Plus staff told me that people who move over to universal credit tell their friends how good it is after a few months, and they then have people coming into the Jobcentre Plus saying, “My friends have told me that UC is so good for them. When can I sign up for it? I want the positive experience that they have had.” That is what the jobcentre staff have told me.
My hon. Friend is exactly right. That is what every single member of staff at the Jobcentre Plus is saying. They tell me that they love the new system, which is enabling them to help people achieve the outcomes that we want everyone to achieve.
We need a balance here. Yes, not everything is perfect, but the Government have used the right method in rolling out UC by taking a phased approach, by evaluating, reviewing and learning, and by making changes where necessary to ensure that we get things right. That should be welcomed. We have seen in recent times how the Government made changes to the waiting times, to the advances and to other things to adjust the system to make it fit for purpose and ensure that it was achieving the outcomes that it was designed to achieve. I applaud the Government for taking that approach.
Many of us can remember the absolute shambles when tax credits were introduced with a big bang and all the problems at that time. This approach is right, and I encourage the Government to carry on taking the same approach as they roll out UC. They should keep listening to the feedback that comes back from DWP staff and from Members and make adjustments as necessary. It is clear that there is further work to do. We still need to look at the taper rate and the work allowance to make sure that work does pay. We have to make sure that people are incentivised to work, and to take on extra hours, by making sure they can keep as much of the money as possible.
We also need to consider extending the time for repaying the advances so that repayment is not a burden. People currently have to repay within a year, and perhaps two years would be better. People should be allowed to take the advance without being put under so much financial pressure to repay.
I say to the Department for Work and Pensions and to the Treasury that this reform is very important. Let us make sure it works by ensuring there is enough money in the system to make it work. It would be wrong if universal credit did not achieve what it is intended to achieve because of a lack of money. Let us make sure it has the funds it needs to work and achieve the outcomes we all want to see.
The Government’s universal credit policy is an utter shambles and a disgrace. Even if the original vision was well intentioned, it is forcing families into poverty, homelessness and destitution. According to The Times, some households will be £200 a week worse off after transferring to universal credit. Half of lone parents and two thirds of working-age couples with children are likely to be £2,400 a year worse off.
The Government have used universal credit as a vehicle for cuts. Instead of helping to lift families out of poverty, it is increasing dependency on food banks, increasing homelessness and increasing indebtedness. The context of this policy is that 4.5 million children are already living in poverty in this country. With disability benefits being cut by £5 billion, child benefits being cut by £2.8 billion and housing benefits being cut by £2.3 billion, universal credit will add to people’s suffering. This is not about transferring people from worklessness and unemployment into employment; it will increase in-work poverty.
The Government talk about ending austerity, but the reality is that this policy will add to people’s suffering. The Government rapidly need to find the additional funding to make this policy achieve its original objective of creating an opportunity for people to make the transition into work and to be able to lift themselves out of poverty. That is not what is happening.
I agree with the hon. Lady that universal credit needs to be adequately funded. Is she as surprised as I am, therefore, that the Labour party did not support the extra £1.5 billion given to universal credit in the last Budget?
The hon. Gentleman should talk to the Chancellor about sorting out this policy, because, too often, his Government experiment on the British people without having a clue about what is happening in people’s lives and dismiss the problems that our constituents face. That happened with the national health service reform. Where is the former Health Secretary, Mr Hunt, who introduced those policies that have devastated the health service? The same is happening with welfare reform. Ministers mete out incredibly devastating, damaging policies on the population, just as they are with Brexit, and then they leave. That is not good enough. Take responsibility and sort out this policy.
If universal credit were a workable policy that improved people’s lives, the Minister might have support from other parties, but that is not where we are. People are being forced into poverty and destitution—that is the legacy of the former Secretary of State for Work and Pensions, Mr Duncan Smith, who introduced this policy. Frankly, he went on a discovery exercise in opposition and found poverty in this country. He decided to come to this House to introduce universal credit, but the reality is that it will make matters worse.
Even those of us who gave the right hon. Gentleman the benefit of the doubt when he founded the so-called Centre for Social Justice now find that his intentions were utterly disgraceful. He presided over a policy that will devastate millions of people’s lives, and Ministers should get a grip and make sure that those mistakes do not end up causing more suffering in our country, because that is his legacy. He should be here taking responsibility for what is happening in this country.
Over half the population of my constituency, including over half the children, live in poverty—the proportion has gone up significantly. Local government funding has gone down by 24% since this Government came to power. Furthermore, families with more than two children are facing cuts to their benefits. The two-child policy will devastate children’s life chances. The policies introduced by this Government are an attempt to cut much needed funding. Although they might have been well intentioned, they are making a mess of a policy that might have commanded support on both sides of the House. The Government need to get a grip, sort out the policy and delay the roll-out until universal credit is absolutely watertight and protects people’s lives, rather than damages them.
My right hon. Friend Mr Duncan Smith is one of the most decent and compassionate men I have ever met, and the slurs we have just heard on his motivation are completely unacceptable and have no place in a calm and civilised debate. Some Labour Members, such as Stephen Timms, have set an extremely fine example as to how these matters can be debated in a calm and proper way—I always listen carefully to what he has to say, because his speeches are always thoughtful and well delivered.
Let us remind ourselves of why universal credit was introduced in the first place. The previous system was broken and was not fit for purpose because there were in effect marginal taxation rates of over 90% in many cases, and there were cliff edges—at 16 hours of work, for example—that meant that people who worked more hours were worse off. People came to us, their Members of Parliament, and said, “We are not going to work any more hours, because there will be less money in our pocket afterwards.” That is clearly a completely unacceptable situation, which is why this reform, in principle, is so necessary.
We have heard today about individual errors in the system, which are obviously very regrettable and Ministers will want to correct them, but let us not forget that almost 6 million people are in receipt of these benefits—either the old ones or the new ones—and, when we are handing out 6 million payments a month, there are bound to be occasional individual errors. Let us not confuse those very regrettable individual errors with a more systemic issue.
Some systemic issues were identified during the roll-out of universal credit, and steps have been taken in the past six or nine months to address some of those issues.
My hon. Friend has mentioned two categories: systemic problems and individual problems. Surely people with individual problems should go to the Department or to their local Jobcentre Plus and say, “Please address this. Something has gone wrong.” In the case of systemic problems, we should adopt the Government’s approach of testing and learning to adapt and change the system.
My hon. Friend is absolutely right, as always. Where there have been systemic issues, measures have been taken to address them. One example is that housing benefit now gets paid for another two weeks after the change to address some of the issues with rent arrears that Members have properly raised. Secondly, claimants can now get a 100% advance, which addresses the point raised by the right hon. Member for East Ham. The seven-day wait has also been eliminated.
The Minister will also want to think about fine-tuning the period when calculating eligibility. A person who receives their last salary payment, particularly if it is quite a large salary payment, towards the end of their last month in employment may not be eligible to receive a universal credit payment in the following month because their final salary payment counts towards the calculation. I have such a constituency case, and the dates need to be fine-tuned and studied a little more carefully. I would be happy to sit down with the Minister to go through the particulars of the case, which is quite technical and complicated, if it would assist him in his work.
Croydon South has the joint highest proportion of claimants who have been moved across to universal credit, at 43%. Only two or three other constituencies in the country have such a high rate, so we have quite a good base of evidence in my constituency. The SNP Front Bencher said that we should take with a pinch of salt what Conservative Members say—
He said we should take with a lorry load of salt what Conservative Members say about how UC operates in their constituencies. That was of course a slur on the integrity of Conservative Members, but I contacted my caseworker during this debate to ascertain the facts. In Croydon, about 4,000 people are currently in receipt of UC, because 43% have migrated; that is my estimate and so it may not be exactly right, but the figure is probably somewhere in the region of 4,000. In the past six months there have been 21 cases where someone has contacted me as their constituency MP, some of which were to do with eligibility questions, such as where the person lives. I would say that 21 individual cases out of about 4,000 is not an excessive number of queries, but when they are raised I know that Ministers will look to deal with them.
Opposition Members have suggested that this is about cuts, but I respectfully remind them again that benefits paid to people who are disabled have gone up to £54 billion in total—that is a substantial real-terms increase. This is not about cuts, as more money is going into disability benefits now than at any time in history. I shall conclude by saying that a measure of compassion, and of Government success in policy and welfare, is not how much money we spend on aggregate, but how many people we get out of poverty and into prosperity, and that is done through work.
Order. I am sorry, but there continue to be interventions and if we are to have any chance of getting everybody in, I am going to have to cut the time limit to three minutes, as of now.
I am going to try to whizz through my points in the short time available, Madam Deputy Speaker. Worryingly, no impact assessments on UC have been produced since 2011. UC has changed a lot since then and it is now a very different system. If it is a “test and learn” system, why have we not seen these assessments coming through? Where is the learning in that?
My local citizens advice bureau manager has sent me a message ahead of today’s debate, saying:
“Universal Credit’s big impact is on people’s mental health. We are seeing so many people who cannot deal with UC due to the fragility of their mental health. It’s making underlying mental health worse. We are aware of clients attempting suicide due to the anxiety of the whole thing.”
That is worrying, but it is also worrying that in response to my multiple parliamentary questions asking whether there are any statistics on the link between suicide attempts or suicide, and UC, I have been told that there is no data on that at all. I am very concerned about that, too.
I held a local roundtable to pull together different charities, organisations, people on UC and the Public and Commercial Services Union to talk about the issues. It recommended a delay on the repayment of advance payments—that was mentioned by a Conservative Member. We spoke about the digital aspect, which has been spoken about a lot. Yes, it can be an ambition to upskill people digitally, but what about those who cannot access digital, cannot get online or are unable to use it? Many people come in to my office and to my local jobcentre and we help them to get on to the system, but the issue then is about maintaining their claim and getting notifications about meetings and things like that. I therefore urge a review of the digital aspect, too.
During today’s Prime Minister’s questions, I spoke about split payments and asked the Prime Minister what her thoughts were about those. I have raised that issue a few times and spoke about it in last week’s Westminster Hall debate. When I have asked the Minister who is on the Front Bench today, the Prime Minister and the Minister who responded last week about this, I keep getting the response, “Oh, you can request a split payment.” That just does not take any consideration of what someone living in an abusive relationship might be going through, so I urge an urgent rethink on that.
The case for UC long predates this Government. Opposition Members will recall that Labour welfare Secretary James Purnell proposed something very similar in 2008, and the Institute for Fiscal Studies called for the same thing. Why was there that consensus? Why is this the right thing to do? It is because we had a system that had grown up in a piecemeal way over time, and that had led to perverse consequences. In particular, large numbers of people on housing benefit and tax credits were losing 90p in every extra pound that they earned. There were mad situations, such as the one trapping people on 16 hours a week because there was no incentive to earn more. I know some of those people and it is good that we are fixing that problem through UC.
“UC will still strengthen work incentives overall. Importantly, UC will have the welcome effect of strengthening work incentives for groups who face the weakest incentives now: the number of people who keep less than 30% of what they earn when they move into work will fall from 2.1 million to 0.7 million. ”
So we are talking about a huge improvement; UC is breaking that welfare trap. Maria Eagle said we should scrap UC, but, with respect, I do not think even the more sensible Members opposite believe that.
UC is one reason why we are seeing more people moving into work and we have record employment. It is why youth unemployment has been halved under this Government and 3.3 million more people have been helped into work.
Let me add a significant statistic: there are more than 800,000 vacancies in this country, so the opportunities to go even further in terms of employment are there before us—it is a great prize.
High employment helps lots of different groups in our society, and so we have record rates of employment for ethnic minority people and for lone parents, we have 600,000 more disabled people working and employment for women is at a record high. As a constituency MP, it is wonderful for me to have 3,000 extra people in Harborough working than there were when we came into office.
I am sure my hon. Friend was about to mention that we also have record employment levels among another group—young people. We have record levels of youth employment now.
My hon. Friend has taken the words out of my mouth; she has spiked my guns.
Of course we need to make sure we get this reform right, so I particularly welcome the move to restore the severe disability element within UC. As Ministers know, I have been in touch with them about that, and I hope we will pass the regulations to do it as soon as possible. I am glad the Department is spending an extra £1.5 billion ensuring that people can get the full amount paid up front, in order to make the system smoother. I am also glad it is solving some of the problems relating to the administration of the scheme, for example, by making it easier to get housing benefit paid directly to the landlord.
In some parts of this House, there seems to be a view that it is a measure of machismo to spend ever more on benefits, but we should reflect on what we inherited from Labour: nine out of 10 families, including Members of this House, were eligible for tax credits; people were getting more than £100,000 a year in housing benefit alone. That is why the welfare bill had increased by more than £3,000 per household. That is not a sensible way to run a country and it was not a good economic policy. It ended in not only national bankruptcy, but with a million extra people thrown on the dole under Labour. Labour Members should be ashamed of that record.
I am happy that we are now bringing in one of the highest minimum wages in the world. I am glad we are taking the lowest paid out of tax. That is the right approach, in order to lift people out of poverty. I am glad that members of our welfare team are listening to the important points made by colleagues such as my hon. Friends the Members for Amber Valley (Nigel Mills) and for South Cambridgeshire (Heidi Allen), who have continued to make the case for sensible reforms, in order to get right, rather than scrap for political reasons, an important reform that has powerful potential to improve the lives of people in our society.
When the Prime Minister stood on the steps of Downing Street two years ago, she talked about fighting against the burning injustices of poverty. How hollow those words sound now to people who are “working around the clock”, doing their “best”, “struggling” through life—those were her words—and are on or will be transitioning to universal credit. Her words have turned to dust, with her promises sacrificed on the altar of austerity. Her Ministers sit here today clinging doggedly to a cruel and toxic policy that is pushing people into destitution, and which will be their legacy. Not content with devastating lives and communities through the bedroom tax; not content with a brutal sanctions regime that demoralises and degrades, not content with a work assessment regime that tells people with degenerative diseases they are fit to work and not content with a rise in child poverty, this Government are pushing on with a reform that has been proven—I stress, proven—to push people into debt and poverty since 2012. I know that Conservative Members have had enough of experts, but when they have the Trussell Trust, Citizens Advice, the National Audit Office, Mind, Shelter, local authorities, the Archbishop of Canterbury, more than 80 disability charities and their own former Prime Minister telling them that it is not working, surely they have to stop and think.
After universal credit goes live in Redcar and Cleveland on
We all know that this is about more than just simplifying the welfare system and making work pay. Those are aims that many Members from all parties would support, but the reality is that this reform is being used to bring in £3 billion of welfare cuts through the back door and, despite the protests from Government Members, it is affecting people who are already in work. Analysis from the Child Poverty Action Group shows that, far from making work pay, as many have tried to argue today, the cuts reduce the gains made from work. Parents who are already working full time on the increased minimum wage would have to work the equivalent of an extra month per year, and single parents two months, just to recoup the cost. Moreover, the transitional protection that is meant to ensure that families do not lose out will not actually be available to many of those who need it.
Universal credit is being used by the Conservative party to disguise massive cuts to welfare. Rather than making work pay, as Government Members claim they want, the new system will leave vulnerable people reliant on food banks and forced into personal debt.
I am pleased to speak in this vital debate, not only because when universal credit is rolled out it will affect millions of lives, but because two significant parliamentary events are coming soon: the Budget and the regulations on managed migration.
I have been a member of the Work and Pensions Committee since 2015 and I have seen the Government do the right thing time and again. We halted the planned cuts to tax credits in 2015, we reduced the taper rate from 65% to 63% in 2016, and last year we invested a further £1.5 billion to reduce the six-week waiting period to five weeks and provide two weeks of extra housing benefit run-on for people who move on to UC. We know that when presented with facts, the Government will act, so that is what I shall do today.
I wish to talk about how we can improve universal credit. Let me start with the existing system. The awarding of a national contract to Citizens Advice will transform the experience of claimants struggling to get on to the system for the first time, but it still will not fix the risk of debt faced by those who cannot wait five weeks for their first payment and who subsequently struggle on reduced payments when they are paying back their advance loan. If press rumours that the pay-back rate will be reduced from 40% to 30% are true, that is welcome, but for me that does not go far enough. Does the fact that we are paying advances to 60% of claimants not tell us that people cannot wait for five weeks, so the system design is flawed? As we are paying out taxpayers’ money at the start, let us give them better value for money by making that first payment the actual payment itself, not an advance loan. If our estimation was wrong, we can readjust slightly at the end of the month and claw back any slight overpayment at the end, when the claimant’s life is more settled and their debts are under control. I believe that that would tackle the majority of debt and food bank-related cases that we hear about. Let’s just do it.
As we have heard today multiple times, we need to make sure that universal credit can handle occasions when there are two pay cheques in a long month and ensure that that does not disproportionally affect the following month’s benefit. We should support the Scottish Government trial to see whether split payments give greater support to sufferers of domestic violence, and we need to look again at how universal credit works for self-employed people.
Totnes has a vibrant arts sector. My hon. Friend will know that many self-employed artists take longer to establish themselves as a business, and there may be great variation, month to month, in what they are paid. In the light of her detailed work, does my hon. Friend have any suggestions about how we can improve the situation for self-employed artists?
My hon. Friend is absolutely right: it is a fact that universal credit was not built for self-employed people, and it shows. The monthly assessments do not work and the minimum income floor needs to be looked at again because it typically takes more than a year for people’s businesses to settle down.
To make the existing system really fly, I suspect that we need a boost to IT and admin man and womanpower behind the scenes, because let us make no mistake: universal credit is not yet fully automated. Claiming for childcare costs is a prime example of the manual work that is still being done. That brings me on to how we move legacy claimants across and the regulations that we have still to vote for—in November, I suspect. I am pleased that migration will start a lot later than originally planned, but I and many others still have concerns about the regulations. As a Government, we are choosing, for all the right reasons, to move people—that is people—across to a new system. I fail to see why that should be the complete and utter responsibility of those claimants. I have led on IT transformation projects in business and it would be unheard of for there not to be some kind of automated population of data from the old system to the new. We need to look really seriously into doing that, because it would save us hardship in the long run. Let us not forget that a third of migrated claimants are on ESA—the most vulnerable in society who have some kind of illness or disability—and we should look after them and not let them drop off the system. The population of data should be automatic and there should be no break in those people’s payments at all.
Finally, when people arrive safe and sound on universal credit, the work allowances need to be what they should have been prior to 2015. How in this fair Great Britain that we call home can we have two families in identical circumstances living next to each other, but one has been protected across through migration and their next-door neighbours are £2,500 worse off a year? That is not Great Britain.
Last Friday, I hosted a successful jobs fair in conjunction with my local jobcentre. The event was a huge success, with more than 50 employers attending, together with more than 500 jobseekers. I was really pleased to be doing my bit to help to get people into work. I mention that because I always seek to do everything possible to support people into work, because that is the right thing to do. If the Government were genuinely trying to simplify the benefit system and achieve a seamless transition from welfare to work, I would welcome that. However, that is not the situation with which we are faced.
To date, attempts to roll out universal credit have been absolutely shambolic and the sheer incompetence has had a devastating effect on families and individuals who need benefits to live. In the short time available to me, I wish to demonstrate that the problems are not the untypical problems of individuals, but in-built system failures that need to be tackled. I am really concerned about the five-week waiting time. How on earth are families expected to manage five weeks with no income whatsoever? Many of these families have no support mechanisms and I fail to see how making families choose between food and heating is in any way incentivising work.
I am concerned about managed migration, particularly in respect of vulnerable people. We ought to be supporting vulnerable people, not punishing them by making it difficult to transfer from one benefit to the other. I am also worried that the amount that those migrating from legacy benefits will receive under universal credit will be a reduced amount. I hear that an initial transitional top-up will be available for the first payment, but what of the subsequent payments? By definition, these are already some of the poorest people.
I also wish to raise the issue of student loans, which are being classed as income in assessments of entitlement to universal credit. Student loans are, by definition, a loan repayable with interest. Under the legacy system, they did not count as income because they were not income. Then there are the mistakes that are made in administration where overpayments are made and claimants are left with huge debts for which they must take responsibility.
In conclusion, I support a benefits system that helps people into work, but I cannot support a system that sends children to school cold and hungry, or that is doing more to punish the poorest and most vulnerable households than ever it did to help anyone into work.
I am pleased to be called to speak in the debate and to be given yet another opportunity to voice my full-hearted support for the universal credit policy. I also warn against some of the voices that we have heard from the Opposition Benches today and from outside this Chamber who have called for universal credit to be scrapped, not least the voice of the shadow Chancellor. We have heard today that that may now be the official policy of the Labour party. That is risky, taking us back to the days when Labour left office. We must never forget that, in 2010, the number of households in which no one worked almost doubled.
I have the privilege of being the chairman of the all-party group for youth employment. Each month, we look at the youth employment statistics—the number of people in work and out of work. We do that because the statistics are important but, of course, what is far more important is the lives of the young people that are transformed as they move into work and are given their first opportunity on the jobs ladder.
My hon. Friend makes an important point. [Interruption.] If Opposition Members will be quiet, I can ask my short intervention. That will leave more time for them to speak. If they keep hectoring, it will take longer.
Will my hon. Friend confirm that, if we were to go back to the legacy system, what we would effectively be doing, given the withdrawal rates, is increasing the rate of tax on those young people going back into work?
I am grateful to my right hon. Friend for his intervention. I am sorry that he received the welcome that he did from Opposition Members because it is a powerful point. Seeing young people’s prospects turned around is one of the greatest privileges of being the chairman of the all-party group. Those prospects will be put at risk if we wind back the clock and return to the legacy system—a system that disincentivised young people and, in fact, people of all ages from getting back into work. There was a marginal equivalent tax rate in excess of 90% and the 16-hour rule effectively disincentivised people of all ages, including young people, from getting back into work.
My hon. Friend Johnny Mercer made a powerful point about the compassion of Members on the Conservative Benches. Anna Turley said that this policy was cruel. There is nothing cruel about encouraging those who can work to get into work, just as there is nothing compassionate about trapping people in benefits. This is a progressive policy. It should be welcomed on both sides of the Chamber.
Earlier, my hon. Friend Alex Chalk said that he had gone to Jobcentre Plus and seen the difference that the policy was making for his constituents. My hon. Friend Steve Double made exactly the same point. When we go into our jobcentres, we see the opportunity and positivity from the work coaches, who see that they can now do the job that they wanted to do when they went into it. This policy should be supported.
We have heard from the Employment Minister—I want him to confirm this in his response—that this policy helps people to get into work faster than under the legacy system. It means that, when they are in work, they stay in work longer, they have the potential to earn more and their progression is greater. I would welcome the Minister repeating that in his closing remarks. I invite Members on both sides of the House to support universal credit and to oppose the motion.
We are here today because this Government are intentionally concealing what they know to be the truth about universal credit. The concealment of impact studies and papers relating to the roll-out of universal credit is an injustice not just to the current recipients of UC, but to each and every future recipient in this country, of which there are thousands.
Those hundreds of thousands of people up and down the UK right now are nervously awaiting their turn for what must feel like a benefits executioner’s block. People are being told time and again that it will not hurt and that the impact of the change will be swift and clean, but we all know that to be untrue. Benefits are being cut and cuts hurt. Universal credit in its current form is a cruel blade and such cuts have a terminal effect. I mean that quite literally, because the bungled roll-out of universal credit is causing severe hardship for many people, at a time when this Government say—to quote the Prime Minster—that “austerity is over”. We have learned three facts this afternoon: first, austerity is not over; secondly, the universal credit roll-out is failing; and thirdly, this Government are concealing the truth about universal credit’s failings.
When the Secretary of State for Work and Pensions said at the recent Conservative party conference that reports of cuts to budgets were fake news, it is possible that she was a little confused. Perhaps she has not read the reports suggesting that cuts to universal credit will total £3.6 billion a year by 2020. Perhaps the reports that she has seen, but has so far refused to put before the House, say otherwise. We will not know until she does lay the reports before Parliament, as well as any analysis produced by her Department since
Universal credit was designed to lift people out of poverty. It started with laudable ambition in 2011, with the Government saying that 350,000 children would be taken out of poverty because universal credit would have higher take-up and wider entitlement than legacy benefits, so might they be willing to tell us today how many hundreds of thousands of children are currently better off for their families being on universal credit? They will not, because almost none are—far from it, in fact. As we have heard this afternoon, organisations such as the Child Poverty Action Group know that 4.5 million children in Britain are living in poverty in 2018.
Might the Government be willing to tell us how far they are from achieving their 2011 aim of lifting 600,000 working-age adults out of poverty through the roll-out of universal credit? They will not tell us because, instead of 600,000 people being better off, we have a system that has allowed rent arrears to climb, food bank referrals to spiral and thousands of adults to be plunged into despair, turning to friends, family and charity for help when they cannot pay the bills to keep them warm.
Yet again we are debating universal credit and yet again I feel as if we are in a parallel universe in this House. However, I am convinced that every single MP wants the very best for their constituents, which is why we all get passionate about this issue.
My constituency of Erewash has had full roll-out for some time now, and universal credit is working. Prior to universal credit being rolled out, much of my surgery time was taken up with sorting out tax credit issues. I am still sorting out some of these historical cases and it is a nightmare, but my surgeries have changed since full roll-out of universal credit. I am pleased to say that they are not full of universal credit cases. I am not going to deny that there are some, but the proportion of such cases in relation to other issues has completely changed compared with the situation before universal credit.
I pay tribute to the staff at my local jobcentres in Long Eaton and Ilkeston. It is because of their hard work and commitment to those who need their support that universal credit is working in Erewash. I am sure that the jobcentre staff and claimants alike would not want to return to the previous system, which was clunky and, more importantly, did not encourage people to return to work, as we have heard from quite a few Conservative Members this afternoon. My local jobcentre staff tell me that more people are getting into work and, more importantly, staying in work as a result of universal credit; they no longer have to sign on and sign off.
In the run-up to this debate, I have received numerous emails from constituents on the subject of universal credit, many of which are identical. Sadly, someone has misinformed them about many aspects of the system. One element of universal credit that has been adjusted since April is that of housing benefit. It is often the housing element that causes problems in Erewash. But now claimants already on housing benefit will continue to receive their award for the first two weeks of their universal credit claim. I thank the Government for making those changes. In addition, the Government have promised to make it easier for claimants to request that their housing element be paid directly to their landlord, so the Government are listening.
Universal credit is working in Erewash and, more importantly, more of my constituents are working too.
On behalf of all the constituents who have contacted me about a range of difficulties to do with their experience of the universal credit system, I reiterate the calls in this debate to halt the roll-out, fix the problems identified so far, and fully fund this policy so that universal credit claimants do not bear the brunt of the Government’s cuts.
Following the Secretary of State’s alleged remarks to the Cabinet that some families will be £200 per month worse off, which is a significant loss, she is now talking about a slower managed migration that will start later next year, and claims to be listening and learning along the way. Well, I do not want my constituents, particularly those with disabilities and mental health problems being moved on to ESA, to have to go through hardship so that the Government can learn from them; I want the Government to learn the lessons now.
This is clearly not a system that is ready for the full migration. New claimants and people with changes to their circumstances—the roll-out started with them—should be the easier cases, but we have already seen long delays in processing and payment, driving people to food banks, with social landlords and private landlords reporting not only a dramatic increase in people going into rent arrears but bigger arrears. I urge the Minister to look at the evidence on this from Community Housing Cymru, and specifically to look at the issue of the two-week run-on of housing benefit, which is not always working in my constituency cases.
As Mind has pointed out, there is huge anxiety out there among those who are going from ESA on to universal credit. Mind says that the Government safeguards for vulnerable people are not good enough. I say that on behalf of a constituent who is hugely worried about the process. Housebound, with no computer, they have to apply for universal credit and, without very close support, they are at risk of losing the benefit. No one should have their benefit stopped until their universal credit claim has been successfully submitted.
I ask the Minister to look at the specific issue of under 25-year-olds with children who are being paid at the under 25-year-olds’ rate, not at the normal rate as under tax credits. That will increase child poverty.
I want to raise the issue of a single mother in my constituency who loves her permanent, part-time job in a school. She is being trained up, with the potential shortly to go full-time, but she is being told that she has to give that up and take on full-temporary retail work in the run-up to Christmas, with no guarantee of work afterwards. Why is this in anyone’s interest? Making someone in work worse off is not work progression.
I have huge respect for DWP staff out there having to deliver this. It is the policy that is flawed, and I know they are doing their best, despite the cuts, to help people. We should thank them. As a constituent said to me yesterday, there is nothing wrong with the idea of simplifying the benefits system, but instead it is being used as an exercise in saving money at the cost of those who can least afford it. It is time to halt it, fix it and put the funding in.
The full roll-out of universal credit in Lowestoft that started in May 2016 has not been straightforward. Almost from the outset, my office received a very large number of complaints, some of which have been addressed through working with the DWP, the council and Citizens Advice. However, it is clear that many people, often the most vulnerable in society, have been put under enormous pressure and have faced real challenges in getting by on a day-to-day basis.
One of the main challenges initially faced was rent arrears in the private rented sector. This has been addressed, to a large extent, by the changes that make it easier for landlords to receive direct payments. This, together with the additional funding introduced in last year’s autumn Budget, has been helpful and has addressed many problems. The roll-out has presented a significant challenge to local DWP staff, who have had to acquire new skills to work with people in a completely different way from the way they worked in the past. They have risen to this challenge. It is vital, going forward, that the necessary support and training are available as the Government move on to the managed migration phase of the roll-out.
What has emerged from the roll-out is the vital importance of the DWP working with local authorities, Citizens Advice and other voluntary organisations. Over the past two years, the east Suffolk universal credit support partnership has evolved. This grouping is co-ordinated by Waveney District Council and is providing vital support to universal credit customers. That includes budgeting and digital support, special disability advice and liaison with landlords. The creation of the partnership means that the area is better placed to handle the increase in demand that will emerge from the managed migration. It was, therefore, very disappointing that on
The torrent of complaints that my office was receiving in 2016 and early 2017 has reduced, but it would be wrong to say that it is now down to a trickle. We probably receive three new complaints per week, most of which revolve around the migration from ESA to universal credit. Some of the complaints are resolved quickly, while others are not. The latter largely revolve around customers who are placed in serious financial difficulty as a result of the withdrawal of severe disability payments. That shortcoming needs to be addressed. With managed migration, the Government need to move very gradually, learning and adapting as they go along.
Wigan became a pathfinder because it wanted to influence the design and delivery of universal credit, while being guaranteed that no individual would lose out, and it has identified problems. Full service roll-out began in April, and there has been a steady increase in claimants. We currently have 7,000 claimants, nearly 3,000 of whom are council tenants. Around 22,000 people are likely to eventually migrate to universal credit, most of them in work.
The challenges are many. Tenants on universal credit have a 97% likelihood of going into arrears, a 90% likelihood of breaching £200 in arrears and a 60% likelihood of breaching £600 in arrears. Much of that is due to the waiting period and, in many cases, delays. An eight-week delay is not unusual in Wigan, and that leads to an average £600 in arrears for a council tenant. The waiting period, as my right hon. Friend Stephen Timms said, is completely unreasonable. Some 16 million people nationally have less than £100 in savings. They can ask for an advance, but it is repaid at 40%. A Government agency does not have to do affordability checks, which even payday lenders have to do.
Food banks in Wigan have seen a massive increase in demand. Since the roll-out in April, the already high demand has increased by 50%. Some 112 people a month in Wigan ask for help from a range of council services with universal credit and complex benefit issues, and 92% of those people say they have no food or money due to delays in payment. If we couple the roll-out of universal credit with the slashing of local welfare schemes, we have a perfect storm.
Wigan has used the pathfinder trials to build up a network of support agencies, but it feels that the primary purpose of helping the DWP to design a system that is fit for purpose has not been achieved. There is no point in pathfinders and pilots unless lessons are learned. So what is the purpose of a pause? Will Ministers return to the pilots and learn the lessons? Will they listen to the agencies, which say that there are systemic problems?
“We will simplify the benefits system”—I have heard that many times over the years, and no one could disagree that we should, but two decades as a CAB manager has taught me that people’s lives are complicated. The system has to be flexible and person-centred and allow for a vast range of circumstances. It has to be easy to access; there have to be enough resources—staff and computer systems—to allow it to operate from day one; and no vulnerable group should be worse off by the implementation. I am afraid that universal credit is failing on all three of those tests.
I am grateful to speak in the debate.
The real reason we are talking about universal credit and welfare reform is a desire to get more people into work. This is not because of some accountancy-driven exercise. It is because work is a fundamental social good that helps people to provide for themselves. [Interruption.] Alison McGovern says that that is wrong. It is remarkable to take issue with the idea that work is a social good, and I assume she does not actually believe that.
Universal credit was designed to help people move into work and progress in work, and studies of it have repeatedly shown that it is capable of doing just that. That does not mean that it is without need of improvement. Indeed, I have been honoured to be part of the process of improving it. The work that I did with my colleagues on the Work and Pensions Committee in advance of the Budget in November last year led to a series of improvements that have greatly enhanced the way that universal credit serves the people on it. We have seen advance payments increased from a maximum of 50% to 100%, and the repayment period has been extended from six months to 12 months. The seven-day waiting period has been removed, and claimants already on housing benefit have continued to receive their award for the first two weeks of their universal credit claim.
My hon. Friend raises a very important point. I can say that universal credit was rolled out in my constituency a number of months ago, and it is working extremely well. We have had nothing but praise for it from the work coaches who administer it, and we have had very high satisfaction rates from people using it in Brentwood and Ongar.
As I say, there is always something to do to improve any system. That is why the test-and-learn approach adopted by this Government is absolutely right, and why the pace of the roll-out has been absolutely right. A very small number of people in my constituency felt they were not given enough information about the application process, so they did not fill in the forms in the right way. They fell foul of the system, and they found themselves not receiving benefits when they expected to and falling into debt. That is exactly the sort of support that I hope Citizens Advice, under its new contract with the DWP, will be able to provide. It is another example of how the Government have responded to the system as it has rolled out and improved on it.
We have to remember that the benefit system being introduced now is a dynamic system, so comparing like with like is extremely difficult. If we have an old, legacy system that actively discourages people from taking on more work and we compare it with a system that helps people move into work and take on more work, a direct comparison, which is what a lot of studies have done, is absolutely inadequate.
In their negotiations with the Chancellor in advance of the Budget, Ministers should discuss with the Treasury the possibilities of reviewing the carry-over of debt from HMRC, restoring work allowances and extending further the advance repayment schedule. My hon. Friend Heidi Allen made a very good point about how we might be able to front-load those payments officially, because we do not want people falling into trouble as they enter the system.
Lastly, I make a plea again for the importance of universal support. This part of the system has the potential to help people overcome very complex problems and move into work, so benefiting themselves and their families.
It is clear to me that there is no doubt this Government’s roll-out of universal credit has been a disaster. In my constituency, Rutherglen and Cambuslang food bank has reported a 50% year-on-year increase in demand at the food bank. In the past four months, there has been a 22% increase in demand compared with the previous year; universal credit full service started this time last year. I have spoken to the people who run the food bank, and they do not say, as the Government do, that there are multiple, complex factors for the increase in food bank use; they identify one key culprit: universal credit.
When I asked the Government whether they would consider independent research to investigate the growing use of food banks, they said they would review only existing evidence, not take upon themselves to investigate further. They say that universal credit is about helping people to get back into work and stay in work, citing favourable employment figures, but so many working people who are claiming universal credit are still forced to rely on food banks. If someone is working but cannot afford to put food on the table, that is not a job; it is exploitation.
Instead of citing employment figures that hide the reality, why do the Government not start investigating and reporting the figures on food bank use? Why do the Government not give themselves the target of reversing that increasing reliance? That would be a true measure of success or failure. If they will not do that, the very least they should do is to listen to what we are calling for today. If it is such a good system, let us see the analysis of the impact on household income and debt.
Yesterday, the Employment Minister appeared not fully to understand my question about employees who get paid every four weeks, rather than per calendar month. This has been raised several times this afternoon. These people’s salaries are split across 13 payments in the year, so many people will be paid twice in November. If they are universal credit claimants, that will register as one calendar month during which their earnings have been too high, so they will lose their award across Christmas and will have to reapply afterwards. This system is so good at supporting people into work that it cannot recognise a widely used payroll system.
The Government say that they have a test-and-learn approach, yet from what I can see they are not doing very much learning. Instead, they have sought to tinker around the edges, testing it on people’s lives. I know that Government Members will have constituents who have been blighted by this system. I call on them to do the right thing and support our motion. If they will not do so for their constituents, perhaps they will do so for their party, because this has already been referred to by previous Conservative Prime Ministers as the next poll tax. Please listen to our concerns, ask for the analysis and support the motion.
It is a pleasure to speak in this important, if familiar, debate. I regret the way that it was framed by the Opposition spokesperson, because this should not be a hugely political issue. When unemployment and youth unemployment are at record lows and 4 million people have been taken out of income tax altogether, through the doubling of the tax-free allowance, it is not the time to question the principle of the work and welfare reforms that this Government have rightly introduced. No Opposition Member has tried to defend the situation that existed in 2010, when people were better off on benefits or working a maximum of 16 hours a week.
Let us focus, as many Members on both sides of the Chamber have, on whether the roll-out of universal credit is working effectively. The situation is different in different constituencies, so let me share the facts from mine. In Gloucester, we have 3,440 constituents on universal credit. About 150 have sought help from our citizens advice office, of whom about 100 have had difficulties with their applications—something that I hope the new contract between the DWP and Citizens Advice will help resolve. I have had 17 constituents contact my office for help with universal credit, out of over 12,000 who have been in touch with my office over the past year. I am not saying that the roll-out is perfect, but I am putting it in context and perspective.
Neil Gray referred to the experts out there, but I do not accept that they know better than we do what is happening in our constituencies. I know what is going on in my constituency, as he will in his, better than the lobbying groups, one of which has produced a template that one of my constituents sent to me. It tells me that she is worried about what will happen when she moves on to universal credit. Her email, which comes from the lobbying group, says
“I will face at least 5 weeks without any money, if I am lucky.”
That is complete nonsense. If she is in real trouble, she will be advanced money within 24 hours.
My hon. Friend is making a valid point. Conservative Members do listen and do care. We are also a very pragmatic bunch of people, so if there is evidence that more money or further changes are needed, we will support that.
My hon. Friend is absolutely right. That brings me to my next point. It is important that the Government continue to listen and to make the changes that were needed over the past three years, as my hon. Friend Heidi Allen mentioned, particularly on the housing element, the speed with which some of our constituents get their first payment and reassuring private sector landlords of the value of having tenants on universal credit on their books.
We all believe in universal credit, but we also realise that it deals with some of the people in society who are most challenged with their income. It is about ensuring that we get the money to them quickly and listen to what is happening. I believe that we are, but we need to carry on listening to what is happening.
Order. We are not wasting time on spurious points of order, because I want to try to get as many people in as possible. I call Richard Graham.
Thank you, Madam Deputy Speaker. I was trying to make two crucial points. First, scaremongering is being organised by certain lobbying groups who are sending emails to our constituents that, frankly, they should be ashamed of. I would like the Minister later on to confirm that this sentence is as untrue as the one I read out earlier:
That is correct as far as it goes, but it goes on to say:
“the draft rules the government have published show that won’t happen if the first attempt to claim isn’t successful.”
I invite the Minister, when he sums up, to confirm that that is simply not true.
The most important point in this important exercise of rolling out universal credit successfully across the country is that the Government continue to look at what is working well and replicate it, and at what is not working so well and take the opportunity to improve it, so that, for example, constituents with learning disabilities get all the help they need with their applications.
The proposal from the shadow Chancellor, the man who would foment the overthrow of capitalism, that the solution is simply to get rid of universal credit and reverse us back into a world where people were better off on benefits than in work and had no incentive to work more than 16 hours a week would be a catastrophic decision that I do not believe Opposition Members agree with or would do if they thought it through carefully. I will not support the motion.
Thank you, Madam Deputy Speaker, for giving me the opportunity to contribute to this very important debate. It is interesting to follow Richard Graham. I am sure 38 Degrees will want to run all their campaigns past him in future. Actually, I think the lines he read out are absolutely true. People are expected to go five weeks without money. I will be responding to those campaigns with sympathy and agreement.
Ministers have taken what was an agreed principle to simplify the benefits system and have lost the support of the House. We have heard Government Members willing to raise criticisms today, but it is a shame that they will not have the courage to support the motion on the Order Paper and to uncover the evidence that Ministers have but the House does not. I raise these issues today because of what I see on the streets of Liverpool and in my office.
I see this issue very much in the context of austerity. Universal credit, since the cuts of the former Chancellor, is now another vehicle for austerity. Those cuts are ploughed on top of 64% cuts to Liverpool’s local authority. There are now reports that Liverpool has the second-highest levels of destitution in the whole UK. Our local authority has to spend £50 million on benefit support services and £3 million on benefit maximisation, and it has spent £1 million over the past two years topping up housing payments for already inadequate benefits to stop people being put on to the streets. That is the context in which universal credit is being implemented in my constituency.
In June, the National Audit Office found that
“Universal Credit is failing to achieve its aims, and there is currently no evidence that it ever will.”
This is not social security as we know it or as it should be. It is not a safety net for our most vulnerable constituents and it is certainly not a welfare state. It is a modern-day digital workhouse for people like my constituent Ann, in Everton, who went 10 weeks without any payment. When she was in distress, she was told to go to the local foodbank. When she could not work the online system, she was sanctioned for three months in a row.
For me, this is all about getting to the bottom of the issue facing our most vulnerable constituents. Nothing less than stopping the roll-out of universal credit to fix the problems will do.
There are currently about 330 claimants of universal credit in East Renfrewshire. We moved to full service last month and there are about 5,200 people on legacy benefits who will be migrated to it in the coming months and years. There is no doubt that the phased roll-out has identified a number of issues which need to be addressed. My hon. Friend Nigel Mills set out very well why the Government were right to proceed cautiously through test and learn. I start by paying huge tribute to the work of the team at Barrhead jobcentre, whom the Secretary of State visited over the summer. They really are changing people’s lives for the better, and we in this House cannot pay testament to the frontline staff in jobcentres enough.
The principles that underpin universal credit were well set out by my right hon. Friend Priti Patel and it is very easy to see why they have carried near-universal support. One of the reasons was that under the old system, as we have heard today, people who wanted more work would be penalised for doing so, which was a completely ridiculous situation.
One group who have not been mentioned today but who will benefit from universal credit are injured veterans. Under existing legacy benefits, those in receipt of such benefits, as well as payments through the war disablement pension or the armed forces compensation scheme, receive a statutory £10 disregard, but under UC, unearned income such as these benefits is completely ignored. There are 12,000 veterans across Scotland—120 are in East Renfrewshire—who receive compensation because of their injuries, and they will be better off under universal credit. That is something we should all welcome.
Other Members have set out the improvements that were brought in to universal credit last year, particularly in the Budget. Those have gone a long way to helping things. Coupled with the recent introduction of the two week run-on of housing benefit, this will help to safeguard those migrating from housing benefit to UC from rent arrears.
Despite these improvements, further progress is still required. In the lead-up to the Budget, the Government should now reinstate work allowances for single-parent families and second earners in families with children back to the level they were before the 2015 Budget, because the changes to those groups undermined the fundamental purpose of universal credit—to make work pay. This would provide targeted support to 9.6 million low-income families, like many in my constituency, and it would be the best way to ensure that UC is truly transformative, as it was always intended to be.
I was mainly talking about single-parent families, but I know of the work that the hon. Lady has done. We have both had discussions with the Joseph Rowntree Foundation—I think we sat around a table together when we were talking about some of its Budget asks—and I warmly welcome the work that it does and support a lot of its asks in advance of the Budget.
As MPs, we always see the worst of a system—nobody comes to our surgeries or pops into our offices to say how wonderful things are, how easy their application process was or how great it is—and those cases are frustrating and maddening, and we do our job to fix them. However, we also need to take account of the many, many people for whom this has worked. I am very pleased to be hosting a UC information event later this month, working with the citizens advice bureau, the jobcentre, my local credit unions and my local housing associations. I want people to know that they can come to me if they have a problem and that they can sit on the day and get help with their application. If they are having an issue, we will have lines set up directly to the DWP hotline and the HMRC hotline so that when people come—on Friday
UC is a good benefit. It is the right thing to do. To scrap it and to go back to a system that traps people on welfare would be a mistake.
I will be brief; I have three points to make. First, after listening to today’s debate, I feel that we have been having the same debate every year that I have been in this House. From speaking to more experienced colleagues than me, I know that the debate about tax credits and whether they worked and how they should be changed is one that we keep having. I am happy to discuss the legacy systems, and what went right and what went wrong. We have been doing so for the past decade, but that is not the point.
What we are talking about today—this is my second point—is a fundamental dilemma in our economy. We have a three-way policy choice between employment, wages and poverty. We all want employment to go up and people to be in work, but we cannot expect wages on their own to cover the cost of life. That is what we are seeing at the moment. While wages have not gone up—[Interruption.] The hon. Gentleman on the Front Bench says that that is ridiculous. Well, he should listen and he should go back to the Beveridge report, because exactly that point was proved: if someone has children, if they are sick or disabled, and when they are old, their wages will not cover the cost of life. The welfare state is there to smooth people’s income over their lives so that in periods of high cost they do not fall into poverty.
That brings me to the third part of this dilemma. If the state does not step in to make sure that the welfare state can do what it is supposed to do, work and wages alone will not stop poverty, and that is what is going on. I ask Ministers: how high does child poverty have to go before they step in? [Interruption.] That is not the case. The Government just changed the definition of poverty. Other Members have listed the organisations that have given ample evidence on poverty to Ministers. Unless the state steps in to fulfil Beveridge’s vision and takes account of the cost of having children, we will always see people falling into poverty. That is a fundamental truth of how our economy works.
I leave the final words to my brilliant staff, Jay Glover, Debbie Caine and Rob Buckingham, who have seen food bank use in my constituency go from nothing to a situation now where it is rife. At the end of every month, there is a spike in demand for food bank vouchers, and they are left dealing with the mess that universal credit is creating. Unlike my hon. Friend Dan Carden, who is a good friend of mine, we in Wirral South never expected to see food bank usage rife in our area, which is more mixed than his, and yet here we are with this pain and stress every month, and this Government, I am afraid, are to blame.
It is a pleasure to follow Alison McGovern, although I remind her that one of the key tenets of the Beveridge report is that the welfare system should not contain perverse disincentives to work, and yet that is a problem in the legacy system we have had to deal with.
I want to focus on two key phrases we have heard a lot today: managed migration and the end of austerity. When I talk about managed migration, I refer not to the benefits system but to immigration into the UK. People outside, if they heard this debate, would think we were in a parallel universe. We are on the cusp of new immigration rules that will be much tougher on the unskilled. As hon. Friends have said, there are 800,000 vacancies, and we know we have a heavy dependency on migrant labour. [Interruption.] Hon. Members might want to reflect on this. In those circumstances, it is paramount that the welfare system does everything possible to encourage the British population into work, rather than putting barriers in their place, because we will need them more and more.
The system must encourage people on part-time hours to work longer hours and the unemployed to take work, and for those who are economically inactive, for whatever reason, it should provide that strong one-to-one support, which is at the core of universal credit, to ensure they can overcome the barriers and make a productive difference to this country, instead of our becoming ever more reliant on migrant labour. That is fundamental.
On the phrase “end of austerity”, the Prime Minister timed it beautifully. In economic history, when we refer to austerity, we mean wages and people’s available income, not public spending, which of course the Labour party is obsessed with. What statistics have we seen this very week? Wage growth is at its highest in almost a decade; as we heard today, inflation is falling, and unemployment is still at record lows. We on the Conservative Benches should be extremely proud of that record. I put it to everyone that we are doing the right thing.
The UK’s big failing in economic history has been to have lower wages per head than similar economies, and we on the Conservative Benches are going to deal with it, and deal with it in the right way, not by increasing dependency and unsustainable benefit payments, but by giving people incentives to get into work and make the most of the talents they were born with so that they can stand on their own two feet, instead of relying on an ever-expanding state.
Many speakers have highlighted the problems that universal credit is causing people on the ground day after day, yet the Government fail to recognise the reality and admit that universal credit is in serious trouble. I am extremely concerned at the prospect of the full roll-out of universal credit in Liverpool, Riverside. According to the House of Commons Library, 2,000 people in my constituency are in receipt of universal credit now, with 13,300 to go. What can they expect? The evidence suggests that they can expect “managed migration”, which is a curious term in this context. It means that when universal credit is introduced, there is no automatic transfer for people who are receiving existing benefits. They must make new applications, and 30% of applications are not completed because people have problems applying online.
Landlords in Liverpool are already approaching me and telling me that they do not want to let their properties to people on universal credit because they are concerned about mounting arrears and failure to pay. People face the prospect of increasing debt, increasing use of food banks, and increasing stress. Stress has not been mentioned much this afternoon, but it is an extremely important issue, not just for people with existing mental health problems, but for people who are struggling to survive as more and more pressures are imposed on them. People will be worse off: according to the Resolution Foundation, 3.2 million working families will lose £48 a week on universal credit.
The Government must stop pretending that all is well. They must halt this roll-out. There must be full disclosure of what is really happening. The Government must act now.
As I have listened to the debate, it has struck me that it is important to remember that we are talking not just about a system, but about people.
I remember two people who strongly influenced my decision to go into politics. This was back in 2005, when the then Government had just introduced the working tax credit. I had taken some time off work, and was volunteering at the local pre-school. One of those two people worked there. She loved her job, and she was brilliant with the kids. Now she was in tears because her partner had left her, and she could not afford to work any more. She was better off on benefits.
The second person, like the first, was a mum with young kids. She was also in tears. Vast amounts had been overpaid to her under the tax credit system, and now the taxman was asking her to repay thousands of pounds. She was one of those individuals who were caught in that system under Labour, when literally billions of pounds were overpaid to vulnerable people who were then asked to give the money back.
It is right for us to look at the present system again, because it is too complicated. Currently, 700,000 people are not receiving the benefits to which they are entitled. We cannot have the chaos that was caused when Labour introduced its last changes. It is right for us to have a new system that does not trap people on welfare. It is right for us to have a simpler system that is easier to use, and it is right for it to be rolled out step by step to small groups of people at a time, so that there is no repeat of that chaos. It is also absolutely right for us to be honest with people. Benefits affect some of our most vulnerable, and we must not scare people who are about to see changes.
Some of the universal credit system has not been perfect, but changes have been made. The offer of advanced payouts and the scrapping of the seven-day waiting period mean that people can have cash in their pockets, and I am glad to learn that the two-week advance of housing benefit is also helping. Ministers have said repeatedly that they are open to suggestions as to how to make changes as we proceed, and they are about to introduce a swathe of improvements. Before we get to the mass migration, I want us to ensure that those with mental health conditions will be helped, and the Government said yesterday that that would happen.
Let us all stop playing political games. We need a safer system, and we need to make it work.
Members might be familiar with an excellent book by Anthony King and Ivor Crewe called “The Blunders of our Governments”. It is a catalogue of expensive Government mistakes from the poll tax to the NHS reorganisation, and when a new edition appears I have no doubt that a whole chapter will be dedicated to the Government’s botched implementation of UC.
The Resolution Foundation states that 3.2 million people will be at least £50 a week worse off. That will push millions from just-about managing into utter misery. That is why the Government must release the official impact assessment showing how people’s incomes would be affected by UC: no more secrecy, we must get to the truth.
Why are Ministers deaf to the people’s pleas? Is it because these are the voices of the poor, the dispossessed, the excluded? Surely one of the lessons we learned from the tragedy of Grenfell, of which Ministers will be well aware, is that when working-class communities warn us of impending disaster, we must pay heed. When the people speak, this Parliament must listen and act.
Let me add to the litany of shame we have heard from hon. Members today with three examples from my own Slough constituency: three cases within a two-week period in September 2018. One concerns an adult with learning disabilities, who was told she did not have the right to reside and was denied UC; she actually had a permanent residence certificate. Secondly, a mother with young children, fleeing domestic violence, was told she was ineligible for UC when she was in fact eligible. Thirdly, a carer of a daughter with serious mental illness has been denied UC under residence criteria. This constituent is reliant on the local food bank and other support from Slough Borough Council. She is still waiting to hear. The pattern seems to be that the DWP assessors are simply unaware of the different ways an EEA national might be eligible for UC and are refusing cases without asking the right questions and fully investigating circumstances. When the Minister responds, perhaps he will address this specific point about eligibility criteria for EEA nationals, and whether he has confidence the rules are being fairly applied.
Today Ministers can do the right thing by not shovelling more taxpayers’ cash on the bonfire, by not hoping, like Wilkins Micawber, that something might turn up, and by not leaking and briefing and dissembling and distracting, but by ending this nonsense now. They must release the impact assessment, halt the roll-out, and help those being hammered in Slough and elsewhere with immediate emergency payments, and avoid yet another cruel, costly and unnecessary Government blunder.
It is a pleasure to follow Mr Dhesi. This has been in large measure a very thoughtful debate. I enjoyed, and would wish to be associated with, the remarks of my hon. Friends the Members for South Cambridgeshire (Heidi Allen) and for Amber Valley (Nigel Mills), and Stephen Timms who made a particularly thoughtful and positive contribution, and my hon. Friend Paul Masterton. However, a number of speeches have, frankly, just been scaremongering, and the last thing the most vulnerable people in our society need is scaremongering from their elected representatives.
We have responsibilities, and I feel the first responsibility I have as Member of Parliament for Stirling when people come, as they do, to my surgeries because of issues to do with UC is provide them with reassurance. I want to thank publicly in this Chamber my caseworkers Rachel Nunn and Martin Earl, who do a fabulous job at giving that reassurance. I also want to pay tribute to them for the work they do in conjunction with Stirling District Citizens Advice, which has created and published a very useful plain English guide to benefits in general, but specifically UC. I also pay tribute to Start Up Stirling, our local food bank, which does amazingly good work, and Stirling Council housing, Forth Housing Association and Stirling Rural Housing Association. There are many other agencies as well, such as Stirling District Women’s Aid. We have tried in Stirling to create a circle of concern for people who are vulnerable and need help, and it works.
Just a few weeks ago it was my great pleasure to welcome the Secretary of State to Stirling, and I wish to confirm, by my own witness, what has been said by others, which is that this ministerial team listens to the concerns of people. They are authentic, genuine and responsive, and I pay particular tribute to the Secretary of State. Because of her leadership, things are changing and improving, and I give credit where it is due.
Those of us on the Government Benches make no apology for committing ourselves to the principle that work should be at the heart of our benefit system. The way we will reduce and eradicate poverty is through the principle of work, and the way we will lead productive lives is by being able to direct ourselves towards productive work. As Conservatives, we make no apology for that principle. To think that it would be in any way moral to leave people trapped and dependent on a benefit system that provides disincentives for them to work is completely wrong, and I am grateful to be a proponent of universal credit.
Universal credit was rolled out in parts of Tooting a year ago, as it was in many other parts of the country, and the results have been devastating. That devastation is reflected not only in the number of weeks that people have waited for payments or the amount by which they will be worse off; the real devastation is in the damage that it is causing to people’s lives. I am going to share some accounts with the House—I have deliberately changed the names involved—and then I want Ministers to tell me honestly that they are not committed to pausing the roll-out of universal credit.
The first case involves Jayne. She had a history of post-traumatic stress disorder and depression, but things were looking up for her and she had secured a job. Unfortunately, she was made redundant and so applied for universal credit. However, universal credit would not cover the cost of her renting a small bedroom in Tooting. She applied for a discretionary housing payment from the council, but was left with £4 a week to live on. Unable to eat properly and unable to travel to interviews, her mental health issues spiralled. The second case involves Monica. Again, I have changed her name. She too had mental health issues and suffered from blood clots on her lungs. She could not afford her daily medication, and she attempted suicide.
In the 50 seconds I have remaining, I am going to ask Ministers on the Government Front Bench to look at me and tell me whether they think that the people of Tooting and of this country deserve better. We are world leaders with a rich economy, yet people here are increasingly using food banks. Whether we like to admit it or not, all Members, on both sides of the Chamber, see people crying before us in our constituency surgeries and saying that they cannot feed their children. The roll-out of universal credit has been instrumental in increasing the number of people relying on food banks. Enough is enough. Today, those of us on the Opposition Benches implore our Government to listen, to take action and to halt the roll-out of universal credit.
I am particularly pleased to see the Minister for financial inclusion, the Under-Secretary of State for Work and Pensions, my hon. Friend Guy Opperman, in the Chamber. He joined me in my constituency over the summer to meet a range of agencies involved in the day-to-day work with people claiming universal credit, which was rolled out there in the middle of last year. What was particularly striking was the evangelism of the jobcentre staff, particularly the work coaches, and the transformation in morale in the jobcentres. That is because the staff, particularly the work coaches, are now finding that they can make a real positive difference to people’s lives by getting them into work.
I do not have time to give the House many case studies, but one involves a gentleman who had returned to this country after working abroad. At his first appointment with the jobcentre, staff identified the fact that his mental health was an issue and that his debt worries were leading to him no longer opening his post. As well as offering work coaching, they were able to ensure that he saw his GP to get his mental health issues addressed, and that he got debt advice and used strategies to deal with those problems. As a result of all that—although not as a result of his first interview—he is now in full-time employment. He has a new confidence and is working in the constituency of my hon. Friend Julian Knight, the Minister’s Parliamentary Private Secretary.
We will all have seen the problems with some of the implementation and execution of universal credit, and it is good to see that that has, to an extent, been addressed since the roll-out began. I hope that the Government will use the time through to the roll-out to look at how universal credit can be improved further. To scrap it now would be a gross betrayal of those whose lives have been turned around.
I do not have much time, so I will concentrate on the three myths about this system that the Tories are perpetuating again and again. The first is that we somehow want to go back to the system of legacy benefits, but that is patently nonsense. The National Audit Office says that we are now past the point of no return and cannot go back. Ellenor in my office is brilliant at helping my constituents navigate the complex system. She has the Child Poverty Action Group book, which is inches thick, and she navigates the system every day and gets people the money they are due. However, the system is incredibly complex, and we need to see universal credit fixed before people are hurt further by the system.
The second is that advance payments are somehow the solution to the problem. They are not. They simply make people rob themselves months in advance, but the Grinch who is stealing Glasgow’s Christmas suggested yesterday that that is what people in Glasgow should do. I spoke to a local primary headteacher in Glasgow last week, and she knows the parents that she deals with in her school. She knows that they will do absolutely everything they can this Christmas to ensure that they can put food on the table for their kids and that they will get presents, but the cost of that will be severe in January, February, March and all the way through next year. Those families will be in severe debt, and they will not be able to get out of it.
The final myth is that work always pays. Work does not always pay under this Government, it does not always pay under universal credit, and it will not pay for the woman who came to my advice surgery who currently has five children. If she moves onto universal credit, she will be out by £700 a month. There is no way on God’s green earth that she will be able to make that up through work or through any other means. All that universal credit will do is put her family into poverty. The system needs to be fixed, and it needs to be stopped before Glasgow gets into serious trouble.
Since time is short, I will stick to discussing one of the important principles of universal credit, which is that hard work should always be rewarded. Anyone who has the drive and the motivation to improve their lot for themselves and their family should always have the opportunity to do so. No matter where someone grew up, where they come from or what their parents do, they should always be able to aspire to a better future.
Opposition Members have levelled much criticism at the reforms, but the Government are right to roll the system out carefully and to make improvements as necessary. To keep the status quo would be far more harmful than the Opposition would care to admit, because the legacy system was bad for taxpayers and harmful for those on benefits. For that reason, I welcome universal credit, which will ensure that work always pays. No more will someone need to question whether increasing their hours will make them worse or better off. No longer will someone striving to put more money in their pocket face an effective tax rate of 90% on earnings. No more will generations of people face becoming stuck in a benefits trap, wanting to do more work but facing a financial hit if they do so. Although there may be some issues to iron out, I welcome the fact that the Secretary of State is working closely on them. I also welcome the fact that 1,000 more people are getting into work every single day under this Government.
As we approach the end of this debate, the fact that such a huge number of my colleagues are still attempting to catch your eye, Madam Deputy Speaker, speaks more powerfully than any speech we will hear today about the full scale of the catastrophe that universal credit is visiting upon some of our most vulnerable constituents. The truth is that every single one of us will be getting emails from our constituents and, heartbreakingly, when we meet those constituents in our surgeries we see how appallingly badly these people have been treated and how far away many of them are from the world of work.
One of the things that upsets me most about universal credit is that a programme that was designed to get people into work is also making life a misery for people who are a long way from the world of work—those who are never seriously going to be available for work. The system treats those people most brutally. They are the very people we in this place should be defending, but they have done worst out of this system.
The Secretary of State for Health and Social Care got in trouble this weekend for claiming on television that he had not received a single letter from his constituents on universal credit, which I find hard to believe. He was disproved when one of his constituents wrote to the press. Is any Conservative Member willing to put their hand up and say that not a single constituent has got in touch to say that universal credit has made their life worse?
I do not have time to take an intervention. Only one Conservative Member claims that not a single constituent has been in touch, so we can take it that every other Conservative Member knows the problems that the Opposition are elucidating. That is the most powerful condemnation of this disgraceful policy.
Previously we had a sophisticated social security system that targeted benefits at those in need. I appreciate that there were issues, but the issues of tapering could have been sorted out within the system.
Universal credit combines three massive computer systems—the Inland Revenue system, the jobcentre system and local council systems—and, inevitably, it will not work. We know the history of public sector computer systems going wrong at the Passport Office, with child benefits and within the national health service. Pushing three computer systems together simply will not work. The whole system is a way of cutting corners and cutting benefits for the most vulnerable.
Universal credit should be scrapped, because it simply will not work. In Swansea and elsewhere it has led to sleepless nights, empty stomachs and shivering families. It is leading to poverty and despair. I believe it is simply a Trojan horse for further cuts. There are already 4 million children in poverty, and another 1 million will be in poverty by 2020. The number of claimants in Swansea has increased by 50%, year on year, to nearly 2,000.
The idea that we have all these jobs, and the like, is not true. In fact, the Government have created part-time jobs or zero-hours jobs from full-time jobs. There are 400,000 fewer people earning over £20,000 than in 2010. The idea that everything is working is not true, and the most impoverished are taking brutal cuts to pay for the bankers’ greed and irresponsibility.
Universal credit is completely wrong. It should be scrapped, and we should go back to a more sensible system.
Today’s debate has made it clear to all that rolling out universal credit, even in a slightly different timeframe and in a slightly different manner, will be a disaster for the most vulnerable. It will be a disaster for the disabled—750,000 are forecast to lose out; a disaster for the self-employed—600,000 will lose out; and a disaster for 3.2 million tenants. Families and children will be forced further into debt, hunger and poverty as they lose up to £200 a month and £2,400 a year.
We have had more than 60 speakers in this passionate and generally well-tempered debate. There has been no scaremongering. These are real cases and real people in our communities. My hon. Friend Ged Killen spoke about his experience of universal credit being rolled out in his constituency and of the rise in food bank use.
Mr Harper spoke about his rather positive experience of universal credit. While you were speaking, one of your constituents got in touch with me and referred to the 45% increase in food bank use in your constituency—
May I ask my hon. Friend for help on behalf of Paul in my constituency? In September, his wife died, and he is in pieces. He cannot get her name removed from his UC application. He says that every time he logs on it is a knife through his heart. I have written, called and requested, but I cannot get her name removed from that claim. Will my hon. Friend help me? Will the Secretary of State help me to get that name removed?
That is a dreadful and, obviously, very sensitive case. I am sure the Secretary of State and the Minister for Employment will take up that individual case, which demonstrates some of the failings of UC.
My hon. Friend Shabana Mahmood referred to the explosion in casework in her constituency as a result of the universal credit roll-out. Gordon Henderson referred to a lack of money among his constituents and debt problems associated with food banks. My hon. Friend Ms Eagle referred to the 34% increase in food bank use as UC was rolled out in her constituency. Johnny Mercer highlighted concerns about cuts to the in-work allowances, but of course Conservative Members voted for those cuts. My hon. Friend Maria Eagle spoke about the chaos for her constituents, particularly with the administration of UC. The list goes on and on.
I must make some progress.
In among this procedure—the passion and politics of today’s debate—let us not forget that for millions of people universal credit is more than just a policy; it is a daily reality. That reality is insecurity. It is fear, hunger and, all too often, homelessness. Despite our political differences, I cannot believe that Members came into this House expecting to or wanting to back a policy that is causing such horrors to increase. I know that I did not and I can tell from the genuine contributions of so many Members in the House today that neither did they. So I say to the Secretary of State: she has heard the stories, she knows the risks of continuing along this road and she must recognise that, when even the architect of universal credit, Mr Duncan Smith, says that the system is £2 billion short and this is what is needed, it is time to think again and probably add a few billion more.
The universal credit journey has not just been a bumpy ride; it has been crash after crash. It is a journey that is rapidly running out of road, with a driver, Captain Chaos, who thinks that dropping down a gear at the last minute will prevent catastrophe. The only thing that can halt this is putting the brake on. We need to stop, radically reform and fix this policy before it is too late. Indeed, the policy may well already be beyond fixing. It is certainly already too late for many of the constituents in my patch and beyond. The Government and the Secretary of State have a choice: they can carry on as they are and preside over another poll tax, or they can listen to the unprecedented number of voices from across civil society telling them to stop and think again. Sir John Major believes that universal credit is
“operationally messy, socially unfair and unforgiving”.
That assessment is shared by expert after expert, and by thousands who are affected by the policy. Delays and tweaks will not solve this. It is time to stop, fund and fix it.
No one can say that universal credit does not get a decent outing in the House: we debated it at departmental oral questions on Monday; I responded to an urgent question on it yesterday; here we are discussing it again today; and tomorrow I shall appear before the Work and Pensions Committee. It is of course right that we debate, that we as a Department are held to account and that we listen and improve the system, and that is what we are doing with universal credit. In her speech, the Secretary of State outlined all the measures we have taken and all the changes we have made over the past months. It has been about benefiting all our constituents who need support.
In this debate, we, and the Opposition in particular, should never lose sight of what it is that we all came into politics to do, which is to improve the lives of our constituents. In the Department for Work and Pensions, it is about not only supporting those who need support but ultimately helping people into work. Of course, helping people into work is about helping people to earn a wage, but it is often also about much more than that. It is about restoring someone’s self-confidence, giving them their pride back and fuelling that sense of fulfilment that comes from their being able to support themselves and their family. That is precisely what universal credit does. It is a system that supports the vulnerable, that is fair to taxpayers, that is sustainable and, ultimately, that makes work pay.
As a number of my colleagues pointed out, under universal credit, people get into work faster, stay in work longer and earn more. As the latest jobs figures showed yesterday, our policies are working. They are helping people into jobs.
I will not take interventions. I took around 50 interventions, in effect, from colleagues yesterday, so I hope the hon. Lady does not mind.
Unemployment is at a 43-year record low. Youth unemployment has more than halved since 2010. Wages are growing above inflation for the seventh month in a row. Britain is starting to get a well-deserved pay rise as we come out the other side of the terrible economic legacy that we inherited from the last Labour Government. This is a record that we on the Government Benches are proud of.
We heard some excellent speeches today; let me outline some of the comments that were made. We heard a really thoughtful speech from my right hon. Friend Mr Harper, who pointed out the disaster of the introduction of tax credits. My hon. Friend Gordon Henderson talked about the enthusiasm and commitment of the staff in his local jobcentres. My hon. Friend Johnny Mercer made a really passionate speech. I recently visited his local jobcentre with him and he absolutely cares. When he said that the legacy benefits system sapped ambition, he was absolutely right. My hon. Friend Gareth Johnson pointed out the problems in the legacy benefits system. My right hon. Friend Priti Patel, a former Employment Minister, talked about Labour’s welfare trap.
My hon. Friend Nigel Mills made a thoughtful speech and pointed out that at the end of the day this is about making sure that work pays. My hon. Friend Steve Double pointed out that he has constituents who have recommended universal credit to other constituents as something that absolutely works for them. My hon. Friend Chris Philp talked about the legacy benefits system being broken.
My hon. Friend Neil O'Brien talked about the fact that under universal credit the incentives to work are absolutely strengthened. My hon. Friend Heidi Allen pays a huge amount of attention to these issues and is incredibly engaged with them. She highlighted our excellent new partnership with Citizens Advice. My hon. Friend Michael Tomlinson reminded us that people were trapped on the legacy benefits system. My hon. Friend Maggie Throup talked about tax credits.
I could go on. I am sorry that I have not been able to mention all the excellent speeches made by Conservative Members. When Opposition Members have individual issues, they should bring them to us. It is no good talking in generalities; bring forward those issues and we will address them.
The Secretary of State, in her opening remarks, outlined all the reports and the information that we as a Department have already published on universal credit. She made it clear that many independent organisations publish regular reports about universal credit, too. This is not a welfare reform lacking in scrutiny and transparency. However, this is not just about publishing information; it is also about interactive dialogue, which we are having.
We will continue to engage as we move forward for the next phase of universal credit, but playing politics with people’s lives helps no one. We should be working together to support the most vulnerable. I urge the House to reject the motion.
The House divided:
Ayes 279, Noes 299.
On a point of order, Mr Speaker. I gave notice of this point of order to your office this afternoon. It relates to three questions that I tabled on Thursday last week pertaining to the trial and sentencing in Preston Crown court of three fracking protesters who have been released by the Court of Appeal without custodial sentences today.
In those questions to the Attorney General, I asked about an investigation into compliance with the judicial code of conduct in relation to the judge’s conduct in that case. Those questions were transferred by the Attorney General’s Office to the Ministry of Justice without any explanation. This lunchtime, the Court of Appeal quashed the custodial sentences. The response that I got from the Under-Secretary of State for Justice, Lucy Frazer, was along the lines that no Minister should comment on these areas. However, on looking at the list of ministerial responsibilities, it is quite clear that questions about public interest functions, including the reference of sentences to the Court of Appeal, are valid for the Attorney General. On top of that, the judicial code of conduct, which the Attorney General can look at, talks particularly about family connections.
I seek your guidance on the basis on which the Attorney General transferred those questions to the Under-Secretary of State for Justice. She said in her response:
“It would not be appropriate for me or any other government minister to comment on cases which are, or have been, before the courts”, but that was not the question that I asked. Incidentally, the gentleman who signed off the judicial guidance in the code of conduct is the Lord Chief Justice himself, who today said that the sentences passed by the judge at Preston Crown court were “manifestly excessive”.
I am extremely grateful to the hon. Gentleman for his point of order, of which I had not myself received notice, but about the absence of which notice transmitted directly to me I make no complaint. I absolutely accept that he informed my office of this matter, but it may have been when I was elsewhere.
What do I have to say to the hon. Gentleman and for the wider benefit of the House? First, the transferability of questions from one Department to another is exclusively the preserve of the Government. That is not something in relation to which, however infuriating to an individual Member, an explanation is required to the Chair or even really the Member. It sounds as though some attempted explanation was given, but it has not satisfied the hon. Gentleman. It is, however, a power of a Department to shift an answer to another Department.
Secondly, by implication, the hon. Gentleman asks what recourse he has. The answer is that he can table further questions in an orderly manner, with the assistance of the Table Office, to press his case. That is the concept of what I call “persist, persist, persist,” which is not an entirely novel phenomenon in the House of Commons and with which the hon. Gentleman, from long experience and perspicacity, is well familiar.
Thirdly, although the hon. Gentleman cannot insist on the presence of a particular Minister—for example, to answer an urgent question, although I am not suggesting this would be such a case—if he thinks that it is relevant to the Attorney General, rather than to the Ministry of Justice, he can seek to raise this matter at questions to the Attorney General. The question whether he is then called to ask a question would of course fall to me, and he might find that he is successful. He must find out when there will next be questions to the Attorney General, and he should table a question. If he is fortunate in the ballot, he will be on to a very good thing. If he is not successful in the ballot, he should cast his beady eye over the successful questions and decide how he can relate his inquiry to one of the successful questions. He then leaps from his feet and hopes to catch my eye—
He leaps to his feet. I was not suggesting that he leaps from his feet, but that he leaps to his feet. I am always grateful for what might be called the prepositional advice of the hon. Member for Rhondda. [Interruption.] Well, Gordon Marsden asked for my advice, and I have given him a very detailed toolkit. The toolkit is available to him, and I hope he will use it.
I do not want to waste the hon. Gentleman too early, so let us save him up for a later point in our proceedings. I am going to hear a point of order from a knight.
On a point of order, Mr Speaker. I am leaping to my feet on behalf of colleagues from around the House and their constituents. There is a fine balance between the security of this place—making sure that the staff and everybody who visits this place are safe—and making it as open as possible for visitors so that the public can see this place. With that in mind, the security particularly at the Cromwell Road visitors entrance has been brought to my attention by my constituents and, on investigation, by others. Last night, a constituent of mine waited in the rain for an hour and a half to get into this place for a two-hour event on the terrace for which they had been charged an awful lot of money, and they only had half an hour at the event. On investigation by myself, I can say this has been happening a lot. It is not just about one night; it is happening a lot.
Mr Speaker, I know that you will say to me, “Investigate with the Serjeant at Arms.” I have done that—I spoke to him at the side of his chair—and I know this needs to be investigated, and he cannot give me an answer now. However, we want this place to be open to the public, and we do not want people to feel that they are being ripped off if they are paying for rooms, which are now very expensive. I seek your advice about how I can raise this issue and have it investigated.