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I have brought the motion to the chamber today to allow the Scottish Parliament to make clear its position on universal credit and to give Parliament the opportunity to show that it is on the side of the people who are being damaged by a system that needs to be halted until it is fixed. Despite repeated requests from people who are suffering under the new system and from councils, charities, housing associations and parliamentarians from all parties—most recently, 12 Tory members of Parliament and Dame Louise Casey—the United Kingdom Government continues shamelessly to ignore calls to halt the roll-out of full service universal credit.
Let me highlight again why the roll-out must be halted. It is because of the overwhelming and compelling evidence that the universal credit system is fundamentally flawed, and what is broken must be fixed. Moreover, because of the UK Government’s reckless behaviour, we will continue to see more and more people plunged into debt and despair as the universal credit service is rolled out unchanged. There are two critical areas of problem. In policy, the in-built six-week wait for the first payment runs entirely contrary to the UK Government’s stated intention for the benefit. Six weeks is a minimum wait and, as we know—and as the Westminster Work and Pensions Committee has heard—the wait can often be very much longer and there is no payment for the first seven days.
Actually, what was mentioned at the Conservative Party conference—believe me, I will get to it—was what we already have. The only new thing that was said was that people will be told up front that they can borrow that money. It is a loan. I will not welcome something as parsimonious as that.
The Tories tell us that universal credit is meant to mirror employment, but who waits six weeks for their first pay packet? How many of us could live without money coming in for six weeks, and how much harder is that if people have children or dependants, rent to pay, food to buy and bills to pay? The approach also ignores the fact that most of those who will receive universal credit when it is rolled out will be in work and will be entitled to the support because they have low wages or hours and they need additional financial help with the costs of children and housing.
In truth, the six-week wait was incorporated in the design of universal credit simply to save the UK Government money. It seeks to save money by imposing a six-week wait on those who can least afford it. The UK Government is saving money with scant regard to all the evidence that its Tory policy plunges people who are already on low incomes into debt, rent arrears and, in some cases, homelessness. More and more people are being forced to rely on food banks and emergency grants.
This is a problem not just in Scotland but across the UK. Frank Field MP, who is chair of the Work and Pensions Committee at Westminster, recently called for a “Christmas truce” on what he described as the “human and political catastrophe” that is the roll-out of universal credit.
Last week, I joined forces with the Convention of Scottish Local Authorities to again call for a stop to the roll-out of full service universal credit. We presented detailed evidence on the impact that it has on people and local authorities, which is frankly staggering. It shows that, in East Lothian—one of the first areas in Scotland to go live with full service universal credit—average rent arrears for tenants who are in receipt of the benefit are £1,022, compared with £390 for those who are in receipt of housing benefit. That is almost three times higher. All of that makes it difficult for tenants to find and keep a home. Those rent arrears not only bring worry and hardship to tenants but pose real problems for social landlords who are looking to invest in the further house building that we need.
For the four local authorities in Scotland where the full service is in place, administration costs have risen in total to over £830,000. No local authority should have to cover from its own budget for the failings of a UK Government. Time and again, the UK Government shirks its responsibilities and expects others to pick up the pieces. This is its mess and it should own it and fix it.
As the Labour amendment highlights, universal credit is not only flawed in policy. It is also overly complicated in its application, it carries a high risk of administrative errors and it is digitally exclusive, thus disadvantaging many. However, in the face of the evidence from national and local government, third sector organisations, the Church of Scotland and others both north and south of the border, the UK Government is still refusing to pause and fix the system.
What action has the current Secretary of State for Work and Pensions taken to address the major concerns about debt and crisis, which are highlighted even by his own MPs? He will refresh guidance so that advance payments are offered up front. The very fact of saying as little as that is to acknowledge that the minimum six-week wait creates hardship. What he has said is so very little and so very late.
Where he has failed, let us see whether the Prime Minister will take action. If she wants to support the “just about managing”, as she describes them, a clear and simple step that she can take is to halt the roll-out of universal credit. She should not propose advance payments, which are loans to be repaid over timeframes that simply continue the problems; instead, she should get her Government to fix the broken system that it created, which pushes people way beyond “just about managing” and straight into suffering and hardship. The Government should stop forcing people to make decisions about eating or heating, going to a food bank, getting a crisis payment and wondering whether they can feed their children and keep a roof over their head.
In its actions and its failure to act, the UK Government is not only heartless; it is incompetent. There was widespread support for simplifying an overcomplicated benefits system, but that support declined as the cracks in the system were highlighted in the pilot areas, and it was squandered by a Government that refused to take steps to fix those problems. As early as 2013, the National Audit Office identified serious weaknesses in the handling of the issue by the Department for Work and Pensions, citing poor governance, poor management and poor financial control.
In 2014, the universal credit pilots highlighted problems with monthly payments and removing direct payments of rent to landlords. All of that was ignored. The Scottish Government will use our very limited powers over how universal credit is paid to address that for new claimants, starting tomorrow. However, it is clear that that should and could have been fixed from the very start.
The Joseph Rowntree Foundation, which I know Mr Tomkins is very fond of quoting, called on the Conservatives to reverse the two-child limit. Originally, the Conservatives said that the transition from the current benefits and tax credits system to universal credit would result in more people gaining than losing, but the reverse is now the case. In policy terms and in delivery, the UK Government system is fundamentally flawed, is being delivered with incompetence and needs to be halted. If thousands of people are being driven into hardship and misery, why continue with that when the system can be fixed? That is straightforward, and it is beyond my understanding why a Government will not listen to all the evidence that it has and make changes.
The Scottish Government will make possible the choices that people want: to be able to be paid twice monthly and to decide whether their rent is paid directly to their landlord—social or private—or to themselves. We will also continue our work on how we will address single household payments. However, let me be clear that we have to pay the DWP for ensuring that people have those choices. We have to pay it to do something that is the right thing to do and which it has been told consistently is what it ought to do. For years, people have told the DWP that the approach creates a problem that could be fixed in that way.
Media reports at the weekend said that Iain Duncan Smith, who was the main architect of universal credit, did not want to hear the bad news about failings of the system. His approach was blinkered, and he marched on regardless. However, he is only one of four Secretaries of State for Work and Pensions since the original white paper on universal credit was published in 2011, and not one of them has been brave enough to pause that shambolic system and take the necessary time to fix the problems that are inherent in the design and delivery of universal credit.
Real leadership comes from listening, paying attention to evidence, and fixing problems. It comes from admitting when you have got it wrong, not from standing by flawed decisions and forging ahead with the blinkers on.
We need, and our people in Scotland deserve, a social security system that puts meaning behind the principles of dignity and respect and that puts people at its heart. I urge every member to support the motion and to call on the UK Government to act now to immediately halt the roll-out of universal credit and fix the problems.
That the Parliament calls on the UK Government to immediately halt the roll-out of universal credit full service due to the overwhelming evidence of the damage that it is causing recipients; agrees that the clear failings in the design and delivery of the system must be addressed; condemns the six-week wait for the first payment of universal credit, which is pushing people into rent arrears, debt and crisis; notes the evidence from a wide range of third sector organisations that highlights the hardship and harm being caused by universal credit; notes that the House of Commons Work and Pensions Committee inquiry into universal credit has highlighted the fundamental flaws that must be resolved before full service roll-out proceeds; welcomes the Scottish Government’s use of flexibilities over the system to provide recipients in Scotland a choice of more frequent payments and for the housing element to be paid direct to landlords, but recognises that this does not address the most damaging aspects built in to universal credit; recognises the Scottish Government’s commitment to introduce split payments of universal credit and to work with stakeholders to consider how these can be delivered in Scotland; welcomes the joint letter from COSLA and the Scottish Government demonstrating the defects of universal credit and calling for the roll-out to be paused, and believes that the UK Government must stop ignoring the overwhelming evidence that shows the negative impact of universal credit full service and take urgent action to fix the problems and make the system fit for purpose and work for the people of Scotland.
“Universal Credit ... remains the right thing to do. The current system is fragmented and traps people in poverty. The prospect of an integrated benefit system that responds to people’s changing circumstances is a prize worth having.”
Universal credit is
“an important tool for tackling poverty”.
Those are not my words; they are the words of the Joseph Rowntree Foundation in April this year.
Universal credit rolls six benefits into one, is expressly designed so that work always pays and is a much more flexible system that can be readily tailored to the individual’s particular and often changing needs. In all those ways—and more—it is a reform to be welcomed.
In comparison with the old system that it replaces, universal credit works. More people on universal credit are in work than was the case under jobseekers allowance and, on average, they stay in work longer and earn more. Unlike universal credit, the old system punished work—it failed to get young people into work and it subsidised low wages by letting the tax credit bill get completely out of control. For all those reasons, and contrary to what the minister has just said, there should be no going back to any of that.
None of that is to say that universal credit is without its problems, and I will address those directly. It has been said—we have just heard the minister say this—that the delivery of universal credit is pushing people into poverty, driving up household debt and forcing people to rely more heavily on food banks. Those are deeply serious concerns, and they are the very opposite of what universal credit was designed to deliver.
Universal credit is designed to be a flexible and bespoke social security system fit for purpose in the 21st-century labour market, to make it easier for people to escape a lifetime of welfare dependency and to move to the dignity, fairness and respect that a good job brings. If the evidence on the ground is that that is not happening, that evidence needs to be taken very seriously indeed.
On the detail of the delivery of universal credit, it is said that three aspects in particular are causing problems. First, that payments are made monthly not fortnightly; secondly, that the housing element of universal credit is paid directly to households and not to landlords; and thirdly, that new claimants have to wait six weeks—and sometimes, it is reported, longer than that—before they receive their initial payment.
I will address each of those aspects in turn. The first two—monthly payments and payments to landlords—are among the matters that, thanks to the Smith commission agreement, we in this Parliament can change. As we heard from the minister, those changes have been made and will come into force tomorrow. Incidentally, those changes were made with the support of the Conservative members of the Social Security Committee.
That leaves only the third reported problem: delays in the initial payment. The Social Security Committee on which I sit and the House of Commons Work and Pensions Committee have written to the DWP about that. Let us look carefully at what the DWP has said.
On 1 February, Neil Couling, the DWP director general of the universal credit programme, wrote to the Social Security Committee. He said:
“Regarding rent arrears, many people arrive on Universal Credit with existing arrears and as I explained to the Committee, it is difficult to isolate the affect Universal Credit may be having.”
Mr Couling told the committee that the DWP was undertaking further work on the matter and, in March, the DWP told the House of Commons Work and Pensions Committee that some 76 per cent of universal credit claimants had rent arrears before they went on to universal credit. Yes, there is a rent arrears problem, but it is not clear from the evidence—the minister has talked about the evidence—that universal credit is causing the problem, given that 76 per cent of new claimants are in arrears before they go on to universal credit.
In East Lothian, prior to the roll-out of universal credit, rent arrears had fallen by 20 per cent; on its introduction, rent arrears increased by 20 per cent in a single year. The evidence is absolutely clear.
The DWP addressed the detail of that point in its responses to the Social Security Community. There was a particular problem in East Lothian, which was one of the first local authority areas in Scotland where the full universal credit service was rolled out, because of how rent is collected by East Lothian Housing Association and East Lothian Council. The member is right to say that that caused delays, but the problem has been addressed; those delays are no longer being caused by universal credit.
“I accept there are cases where claimants wait longer than 5 to 6 weeks before they get the money they are entitled to. There are a number of reasons for this, including verification of housing costs”.
That is the problem that occurred in East Lothian, which Mr Gray has just mentioned.
From their responses to our Social Security Committee and to the House of Commons Work and Pensions Committee, it is clear that DWP ministers and officials are aware of those problems and are working hard to address and minimise them.
Processes for verifying housing costs have been improved, budgeting advice is being provided in jobcentres, and benefit advances are available for new claimants. All that has delivered a real improvement in the timeliness of payments; the most recent statistics show that nearly 80 per cent of new claimants now receive their full payment on time.
Is that good enough? No, it is not. That is why the Secretary of State for Work and Pensions yesterday made two further commitments, both of which the minister sought to minimise in her remarks, in particular in her answer to Mr Balfour, but both of which we should welcome. First, the secretary of state said that claimants who want an advance payment will have to wait not six weeks but five days. Secondly, he said that if someone is in immediate need, the DWP will fast-track the payment so that they receive it the same day.
That is what the secretary of state said yesterday. That is not carrying on regardless. That is not putting the blinkers on, as the minister said. That is taking into account the evidence and making significant changes to the operation of universal credit so that it is safe to be rolled out, which is exactly what is happening.
Does Mr Tomkins accept that the DWP’s information that was released this year shows that one in four new UC claimants waits longer than six weeks, half of claimants need a DWP loan—the advance payment is a loan, which needs to be repaid—to pay for food and energy while they wait, nearly a third borrow from family or friends, and, most disturbing of all, one in 10 turns to payday or doorstep lenders?
Can Mr Tomkins tell me that giving people a loan on the first day or within five days, which they must pay back, does not simply prolong their problems with debt and arrears? Can he tell me, in the face of all the evidence from local authorities across Scotland, that that is a good way to address the six-week wait? I think not.
That was more a speech than an intervention.
The answer is straightforward. There is an interest-free loan, which needs to be paid back over a six-month period. The point is that claimants who are in need are getting the money that they need on the day when they make their claim, not five days or six weeks later.
Let me conclude and directly address the minister’s point. It is more important that the DWP gets this right than that universal credit is rolled out by any particular deadline. The UK Government can hardly be accused of rushing the roll-out of universal credit: the completion date has already been put back to 2022. Getting it right is more important.
Should the DWP carry on with its roll-out regardless of the concerns about the delivery of universal credit that have been raised? No, and that is not happening. The DWP should continue to address and resolve those concerns as universal credit is rolled out. That is what the secretary of state committed to yesterday, and we should welcome it.
I move amendment S5M-08035.2, to leave out from “calls” to end and insert:
“recognises universal credit’s core purpose of ensuring that work always pays; agrees with the Joseph Rowntree Foundation’s assessment in April 2017 that universal credit ‘remains the right thing to do’, that the ‘current system is fragmented and traps people in poverty’, that the ‘prospect of an integrated benefit system that responds to people’s changing circumstances is a prize worth having’ and that universal credit is ‘an important tool for tackling poverty’; acknowledges that universal credit is a reserved benefit, but that Scottish ministers have significant powers to adapt its delivery in Scotland; welcomes regulations coming into force in Scotland, which will enable recipients to request changes to the way that their payments are made; recognises serious criticisms of the way that initial payments are delayed and the impact of these delays on vulnerable people; calls on the Department for Work and Pensions to ensure that, as universal credit is rolled out further, these concerns are addressed as a matter of urgency and, to that end, welcomes the announcement by the Secretary of State for Work and Pensions on 2 October 2017 that claimants wanting advance payments will get them within five days or, if they are in immediate need, on the same day.”
When the Parliament last debated universal credit, a few weeks ago, I said that I would welcome a Government debate on the issue, so I am glad to be speaking in this debate to move Labour’s amendment and support the Government motion.
Where we can work together as a Parliament, we should do so. I am glad that the majority of parties in the Parliament are working together in their efforts to stop the roll-out of universal credit, which is having such a negative impact on the health and wellbeing of so many people in Scotland.
I acknowledge Citizens Advice Scotland’s work to highlight the major flaws and to build the campaign to stop the roll-out. The campaign is supported by 24 Scottish charities, including Shelter Scotland, Oxfam Scotland, Children in Scotland, the Poverty Alliance, the Coalition of Carers in Scotland, Enable Scotland and the Scottish Federation of Housing Associations. Given that we can add to that list the churches, the trade unions and the many other organisations that are getting in touch with members of the Scottish Parliament, it is fair to say that Scottish civic society—indeed, the majority of Scotland—is calling on the Westminster Government to stop the roll-out of universal credit and sort out the problems.
The debate is timely, because we have seen updates on the issue from the Tory party conference this week and increased coverage in the news as the full extent of the problems becomes even more evident—evident to all, it seems, apart from the Tories. The work and pensions secretary intervened this week to announce that people who are claiming universal credit and are struggling to pay their bills will now be able to get a cash advance up front on the day that they claim. However, that is not a solution to the problems inherent in the structural set-up of universal credit; it is a sticking-plaster solution that tries to hide the problems that have been occurring across the roll-out areas up and down our country. Across the pilot areas, we have seen a large rise in rent arrears, an almost doubling of crisis grants and massive increases in the need to depend on charity for that most basic necessity: the ability to feed ourselves and our families. How on earth can that be ignored? It cannot.
By making that latest commitment, the work and pensions secretary clearly recognises that there is a problem with the six-week period for payment. Yet, instead of calling a halt to the accelerated roll-out, he is committed to carrying on regardless. He is ignoring calls from civic organisations across the country, Opposition politicians and even a number of Tory MPs who have added their names to the list of those who are calling for a halt to the roll-out.
When we debated the issue last, I asked:
“Why would any Government in a civilised society continue to roll out a new policy that it knows is going to hurt tens of thousands of people, will drive people into debt and towards relying on charity to feed themselves, and will result in even more people in our country being driven into poverty?”—[
, 7 September 2017; c 28.]
I ask the same question today. This Tory Government has shown complete contempt for some of the most vulnerable in our society and seems willing to push ahead with no regard for the misery that it is going to inflict.
I remind the chamber that, during the summer, I wrote to every MP in the UK, asking them to support a call to halt the roll-out of universal credit. I wrote to the work and pensions secretary, who, in fairness, got back to me in reply. However, his defence of the roll-out stated that the evidence from Citizens Advice Scotland was
“based on evidence from a self-selecting group of people”.
I take it that he meant the very people who have experienced being part of the roll-out.
I also wrote to the leader of the Scottish Tories, Ruth Davidson, but have had no response to date. The Tories here in Scotland seem to want to bury their heads in the sand. Do they really not care about what is happening to those who are suffering under the policy as it is rolled out across Scotland? We see another weak-willed defence of the roll-out from the Scottish Tories today.
Does the member agree that the best way out of poverty is to work and that people who claim universal credit are 13 per cent more likely to be in work than people who claim jobseekers allowance?
Skills opportunities and employment are, for me, the best way out of poverty—I do not disagree with that. However, we need to provide support. It is clear that the proposal, in its current form, is failing and we need to address that.
Even the Department for Work and Pensions has recognised that universal credit is a key factor in rent arrears. In the report that was published just a few weeks ago, official figures showed that 24 per cent of new universal credit claimants wait longer than the six-week period to be paid in full, which causes many of them to fall behind with their rent. With such facts available to it, why is the Government still confident in pushing ahead with this failed system? What is important for people who will suffer as a result of the roll-out is that the Tories at Westminster and here in Scotland face up to the issues and call for a halt to the roll-out until the design and implementation of universal credit are fixed.
The evidence is overwhelming. How many more reports do the Tories need to see before they realise that they cannot just ignore it? Or is the Government willing to drive its people into poverty? It should listen to this Parliament today and to civic organisations up and down Scotland. Most important, it should listen to the people who are suffering as a result of its actions—the people who have experienced the pilots in areas up and down Scotland. I urge the Tories to listen to the people and halt the roll-out of universal credit.
I move amendment S5M-08035.4, to insert at end:
“notes that the highly-complicated application process and resultant administrational errors have delayed payments, which have also pushed people into crisis, and further notes that the aim to create a ‘truly digital welfare service’ risks excluding and disadvantaging people who are not online or computer literate.”
This is the second time in less than a month that the Parliament has debated the roll-out of universal credit. That is a clear reflection of the extraordinary level of concern that our constituents and their representatives here—or most of them—have regarding this very significant change in the social security system.
Greens support the Government motion and agree that the universal credit roll-out should be paused. However, while the design and delivery of universal credit are clearly a problem, the number of cuts that are being hidden in the transition is equally as serious.
Recently, Musselburgh and District Citizens Advice Bureau and Haddington Citizens Advice Bureau launched their report “Universal Credit in East Lothian: Impact on Client Income”. They surveyed everyone who came to them for help over a two-week period. The results showed that 52 per cent of the universal credit recipients who were surveyed had lost money and that 80 per cent of those who did so saw their income drop by more than one tenth, with an average loss of £44.72 a week. Disabled recipients and lone parents were the hardest hit—that has been a long-running theme of welfare reform under recent UK Governments. Disabled recipients who were surveyed lost up to 20 per cent of their benefit income, with an average loss of nearly £60 a week. It is no surprise, then, that East Lothian Council has faced significantly increased demand for support, with applications for Scottish welfare fund crisis grants being 20 per cent above what would usually be expected. In 2016-17, there was a 12 per cent increase in council tenant rent arrears, but, for universal credit claimants, the figure was almost double, at 22 per cent.
Those are figures from one area, but they accurately reflect the bigger picture, which is that universal credit is
“now less generous on average than the tax credits and benefits systems that it replaces”.
When universal credit was launched, the white paper—incidentally, it was called “Universal Credit: welfare that works”, which is not an apt title, given the problems with the roll-out—said that
“no-one will experience a reduction in the benefit they receive as a result of the introduction of Universal Credit”.
However, since then, the value of universal credit has dramatically eroded. We have had the benefit cap, which Scottish Green Party research shows is hitting more than 2,700 Scots families, with more than 11,000 children being impacted. We have also had the freeze on universal credit uprating from 2016 to 2020; huge cuts to the universal credit work allowances, which mean that a working single parent will lose £554 per year; the two-child limit for child tax credits; and the abhorrent rape clause.
I am very grateful to the member for taking an intervention. One of the recent changes to universal credit has been the change in the taper rate from 65 per cent to 63 per cent, which even the Scottish Government said, in June this year, has had “a positive impact”. Does the member agree with that?
Yes, I agree, but that amounted to £0.7 billion, compared with an initial £3 billion cut.
Research by the OBR shows that, by 2020, universal credit will take around £3.1 billion out of the pockets of the UK’s poorest families. Some estimates are even higher. A report from CPAG and the Institute for Public Policy Research suggests that, by 2020, two-parent families with children will be worse off, on average, by £960 a year, compared with the income that they could have expected in the absence of cuts to universal credit, and that single-parent families will be worse off, on average, by a staggering £2,380.
The white paper also promised that 900,000 people, including 350,000 children, would be lifted out of poverty. CPAG claims that the opposite is the case, with universal credit putting around 1 million children in the UK into poverty. I have mentioned those figures before in the chamber; I am doing so again, and I will keep repeating them until Conservative members of the Scottish Parliament and the UK Government understand the damage that they are doing to so many families and their children.
I turn to the waiting time for universal credit. Universal credit is paid monthly, and, currently, there is a seven-day waiting period and a further seven-day period before the payment is made. That makes for a waiting time of, at best, up to six weeks. How on earth did we come to design a system with a built-in delay of that length? The UK Government’s justification for it is that universal credit mimics work by paying monthly. Leaving aside the rather patronising idea that people who require support with their income need to be taught what work is like, that comparison is flawed. Many jobs still pay weekly or fortnightly, and very few jobs—if any—require the employee to wait for six weeks to be paid. Employers cannot simply pay someone weeks late with impunity, but that is what happens with universal credit, with payments coming in seven, eight or nine weeks late, or even later.
That puts huge strain on universal credit recipients and the services that are trying to help them. Citizens Advice Scotland reports that in areas where universal credit has been rolled out there has been a 15 per cent rise in rent arrears in comparison with a national decrease of 2 per cent, and an 87 per cent increase in crisis grant issues in comparison with a national increase of 9 per cent. Those figures should give the members on the Conservative benches pause for thought.
The Scottish Government is right to call for a pause in universal credit roll-out, as the Greens have done several times, and we will support the motion at decision time.
We support having a simpler, single benefit payment, which is the premise of universal credit, but not when that payment is already insufficiently low—and lower than what many of our citizens need—and not when that payment is less by hundreds, sometimes thousands, of pounds.
The analysis that I have offered today is shared by groups across the political spectrum. The Resolution Foundation, which is chaired by Conservative MP and former minister David Willetts, argues that universal credit now is different from the original proposal because of
“the increasingly tight financial restraints placed on it over recent years. These have involved more than just a reduction in the money available under UC, they have also altered the very structure of the policy—changing the composition of winners and losers and fundamentally damaging its ability to deliver against its purported aims.”
The UK Government should pause the roll-out of universal credit and rethink the cuts that are being made in it. With child poverty costing the UK economy billions every year, universal credit cuts, even viewed in the narrow fiscal terms so beloved by the UK Government, make absolutely no sense.
I move amendment S5M-08035.1, to insert, after “paused”
“; observes that the independent Office for Budget Responsibility has said that universal credit is ‘less generous on average than the tax credits and benefits systems that it replaces’ despite original assurances that ‘no-one will experience a reduction in the benefit they receive as a result of the introduction of universal credit’”.
I welcome the Scottish Government’s motion and the opportunity that it affords the chamber to call a halt to the botched accelerated roll-out of universal credit. It follows a successful members’ business debate last month, on a motion in the name of Alex Rowley, which drew support from all but one corner of the chamber. I was very proud to speak in that debate. I reminded members of the origins of social security in the 1940s, when the great Liberal William Beveridge first identified the original giant evils of ignorance, idleness, squalor, want and disease. That language is outdated, but the challenge that it speaks to in many ways still grips large sections of the people whom we are elected to serve.
Welfare reform has been a necessary response to the shifting nature of those social problems and the emerging understanding that, through state support, we can and should give people the power to change their own situation for the better. It was sought by poverty campaigners, third sector organisations and academics over the course of decades, and it fell to my party in its period of coalition Government to co-preside over the much-needed redesign. I am not wholly proud of everything that we did in coalition and there are aspects that I still find shameful, but the extent of the Conservative assault on the welfare state since they found themselves unencumbered by Liberal influence should lead to an understanding of the measure of our positive involvement.
The accelerated roll-out of universal credit is an empirical example of where process and an ideological drive to reduce the size of the state have held sway, irrespective of the misery that lies in their wake—and there has been misery.
The difficulties that have been reported by organisations such as the Child Poverty Action Group go beyond even that. For example, people who have switched over to universal credit have had to endure a wait of six or more weeks before receiving their first payment; calculations have resulted in underpayments of benefit due to the inaccurate real-time recording of information; and online applications have simply disappeared without trace. In each of those inadequacies, we can see a toll exacted on families that, in turn, exerts a material risk to their wellbeing.
I rise today in support of the Government motion, recognising that it gives voice to the intolerable human cost that the flaws in the accelerated roll-out have caused, and I am grateful for the Government’s efforts to seek consensus in the conduct of today’s debate.
The Liberal Democrat amendment seeks only to strengthen the Government position. It does that in three key ways. It seeks to ensure that those who are moving over to universal credit are supported to do so. We must offer them comprehensive advice and continuing support on how to manage money and deal with problems in the application process as they arise. That should be underpinned by free, unrestricted access to the universal credit helpline, particularly for the duration of the roll-out. Perhaps most important, the amendment seeks to affirm the consensus that exists across the political parties in the chamber around the view that splitting payments across households is an essential development in the evolution of welfare reform.
I stand on common ground with the Government and other parties when I state my belief and that of the Liberal Democrats that, in the roll-out of a new system such as universal credit, we have an opportunity to blockade a tool of coercive control that has characterised domestic abuse in this country for generations. Splitting payments equally across every claimant in the household, as the Government has committed to do, might go some way towards removing money as a lever of coercive control, which is a key characteristic in nearly 90 per cent of abusive relationships. The measure will not rid our country of abuse, but it represents a frontier in the battle for its eradication and, coupled with other efforts, such as the legislation that was passed by this Parliament last week, would bring us a step nearer to that aim.
With 25 different expert stakeholders in poverty and social injustice calling on us to halt the process, we, as a Parliament, must listen. We must also be clear that the resistance to accelerated roll-out is not a fundamental objection to the principles of welfare reform, but a just reaction to the unintended impact of its introduction. It answers the challenge that was set for us by the Liberal William Beveridge when he said:
“The State in organizing security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.”
In short, it is the belief of members on the Liberal Democrat benches and of Liberals through the ages that welfare in this country should be constructed on the foundations of compassion and social mobility. We should seek to use it as a tool of liberation from poverty, social isolation and domestic abuse and if, in the roll-out of policy, we harm those citizens whom it is designed to serve, as we appear to have done in this case, we must cease its introduction until that can be remedied.
I move amendment S5M-08035.3, to insert at end:
“; believes that the UK Government must put a comprehensive support package in place before universal credit roll-out accelerates, to make sure that people receive advice on managing their money, advances and dealing with complications in the application process; considers that, to support this, the universal credit helpline should be free of charge, at least until the roll-out is complete; recognises the importance of recipients having financial independence, particularly in domestic abuse settings, and therefore believes that universal credit should be automatically split between adults in a household.”
It is important to remind members, particularly the Tories, that today we are discussing human beings and their situation; we are discussing not statistics, but real people.
I find it absolutely abhorrent that those who are most in need are being penalised by a system that should provide for them. I whole-heartedly agree with the call for the universal credit roll-out to be stopped immediately, and I reiterate the concerns of the House of Commons Work and Pensions Committee, which every speaker has mentioned and which highlighted the fundamental flaws of universal credit.
Universal credit has been a shambles since its inception and the report that was produced by Citizens Advice Scotland laid bare a system that is not fit for purpose. The evidence is damning. The system is actively pushing people into crisis through the six-week wait for payment, and knock-on effects such as rent arrears affect not just those people, but housing associations, which cannot invest in other residents as a result.
It really is a two-pronged situation for everyone, but it is the people who are suffering. They are unable to buy food or pay bills such as gas or electricity. What kind of society are we living in if that is what we are putting people through?
A Glasgow CAB reported that a client with long-term depression who was in receipt of universal credit was having £95 recovered from their payments to pay back a hardship loan, as well as £31 for rent arrears, leaving them £190 a month to live on. The CAB contacted the DWP to renegotiate the repayments for the hardship loan, but it was told that the arrangement was non-negotiable.
I would like to give another couple of examples of the advance payments that are so lauded in the Tory amendment and by Adam Tomkins, who moved it. Let us look at the so-called five-day period, or whatever it is. It is not money that is being given in kindness. It is a loan. We keep saying that it is a loan. What kind of society or Government gives a loan to somebody who desperately needs the money and might have to become homeless if they do not get it? They have to pay it back, and loan repayments are automatically deducted from their universal credit payment, until the total amount is paid back. A claimant must also provide a breakdown of what the advance is for and how it will prevent damage to health and safety, and there can be only one advance per person.
I can hear Jeremy Balfour talking in the background, but he ought to be aware that claimants can be refused a payment if they do not face serious hardship, if they are close to receiving another payment, or if they cannot afford to repay the loan. I say once again that it is a loan. It is not money that is being given out of the goodness of the Government’s heart.
The evidence that we gathered from CAB offices across the country is that the system is designed to exclude the most vulnerable. Although the DWP wants to have a totally digital service, only a quarter of those consulted would be confident in using that kind of service, as is highlighted in the amendment moved by Alex Rowley on behalf of the Labour Party. By implementing that process for accessing support, the Government is marginalising a huge number of claimants. Not everybody has the technology or the experience of computers to be able to access the system.
Another case from a Glasgow CAB is a prime example of the inadequacies of the digitally driven system. A client who had tried to make a claim for universal credit admitted that they had struggled to meet the online obligations expected of claimants due to not really knowing what they were doing. The outcome was that the client was without any income for 10 months, just because he could not access the system as he did not know how to use the technology. That claimant was staying with family, but felt uncomfortable because he could not contribute financially.
The administration of the system has been attacked, and rightly so—I refer to the case that I have just outlined. Members will not be surprised to hear that there are many more such cases. A Glasgow CAB reported one case of a client providing all the information required for the claim, but due to the DWP not processing all that information they had to wait a further two weeks before the claim was processed. That is not an isolated incident. Such cases come through time and time again, and the Social Security Committee has heard evidence about the problem on our visits outwith the Parliament.
It is little wonder that people are calling for a halt to the system. We are not saying that the previous system was perfect, because it was not. What everyone except the Tories is saying is that universal credit is punishing people. People are suffering greatly and we need to halt the roll-out. I ask the Tories—although I expect that this will fall on deaf ears—to support the motion tonight, because people are really suffering. They are human beings. The system is a disgrace, and I fully support the recommendation from the third sector and others that the roll-out cannot go ahead until the serious flaws in it, which all speakers have highlighted, are rectified.
I welcome the amendment in my colleague Adam Tomkins’s name and I fully support it. I suspect that there will not be a lot of consensus from other parties about what we are going to say this afternoon, but surely we can all agree that what we want to see in Scotland is as many people as possible getting into employment.
We had a members’ business debate last week during which I raised the issue of disability and the lack of disabled people in employment. Universal credit is designed to help people to get into employment. We need to remember that that has to be our aim.
Not at the moment. I will make some progress first, if that is okay.
We have heard much about the great old system that we all loved so much—six forms, six claims, six different payments, all of which caused confusion and difficulty. The system needed to be reformed. Until today, I understood that every political party wanted to see change. However, what I hear is that we want to go back to a system that failed people and did not work.
No. I want to make progress.
We have heard a lot from the minister and Sandra White about issues with information technology and how it causes people problems. I recognise that for many people, including me—I am a bit of a Luddite—IT is difficult. However, in Musselburgh Jobcentre, where universal credit has been rolled out, the staff are helping people to fill out the form. East Lothian Council is running training for people so that they can use the IT free of charge in the library.
That allows them to fill out the forms and gives them expertise that they do not already have.
The principle of universal credit is right and it is helping people into employment.
We have heard a lot about the hardship loan, and I agree that it is a loan. When I started my first job, I went to work and I did not get paid for four weeks. My mum and dad gave me money to get me over—
I will finish my point and then I will give way.
My mum gave me money for four weeks to help me survive. You know what? She then wanted that money back. She gave me a loan and then asked for the money back. That is the same thing that is happening here.
At the Conservative Party conference yesterday, the secretary of state said that if somebody goes in to the jobcentre, they will get that money on the day and they will have to pay it back over six months. Why is that wrong? Why is that unfair?
That is why they get the money, and why they have to pay it back over six months in a way that they can afford. That seems to me to be an appropriate way to work.
I will be interested to hear Alex Cole-Hamilton’s summing up. I welcome the Scottish Government’s move to two-week payments and to paying rent to the landlords. Those are positive steps that will come in tomorrow and I welcome them. I also welcome the secretary of state’s commitment to the one-day and five-day periods. My question to the Liberal Democrats is: what more do they want to change before they would allow the roll-out to carry on? They have said that they agree with it in principle, and we are rolling it out slowly so that where there are glitches they can be fixed.
As the question was directed at me, I feel compelled to answer. As the Government motion says, there should be a full stop of the roll-out until any teething glitches and IT problems are resolved and the six-week wait is completely annihilated.
The second thing is that there should be free access to the comprehensive universal credit helpline.
Finally, when payments are made, we need to be sure that they are split across households so that we can reduce domestic abuse.
I welcome that clarification from the member but unless we roll out the system, we will never know about the glitches. That is why the Government is taking its time in rolling it out—
Sorry—I am in my last minute. I am about to be told off by the Presiding Officer.
That is why it is right to continue to roll this out—to make the necessary changes. To be against this in principle is wrong. It is holding people back in our country and the other parties should reflect on that—they are causing greater poverty and fewer people with disabilities getting into employment.
What happens when there is a Government in Westminster that admits that its own welfare reforms are “flawed” but pushes on with them anyway? What happens if a person does not come from a privileged background, with a family that can bail them out whenever they need it? What happens is total chaos in devastating doses, wrecking the lives of people who are easy targets. It is not universal and it is not credit.
The Joseph Rowntree Foundation has just got back to me to say that it wants to see an immediate end to waiting days, the introduction of fortnightly payments and the payment of rent directly to landlords—just like the Scottish flexibilities that are coming into force tomorrow—as well as a more generous work allowance and a second earner allowance. That is needed if universal credit is to make work pay, as the Tories say, and is better than minor changes to the taper rate. The Joseph Rowntree Foundation also says that it supports choice over payment splitting within households, stating that those receiving the child element should be first.
Lord Freud, the architect of universal credit, has already admitted that there are faults and he has said that it might take “decades to optimise” the scheme—decades. That will not be a problem for him. This is the same Lord Freud who, in a letter to me, told motor neurone disease sufferers to take in a lodger or work extra hours in order to cope with the bedroom tax. That gives us a view of the man behind the scheme.
Then we have David Gauke declaring that universal credit is “transforming lives”. Yes, it is transforming lives, but not for the better; certainly not for the suffering people I see coming through my door every single day. The figures emerging on how it is “transforming lives” are from the five areas where we have had the pilots. Citizens Advice Scotland has told us that in those areas there has been a 15 per cent rise in rent arrears and an 87 per cent increase in crisis grants. Also, there has been a 40 per cent increase in one area and a 70 per cent increase in another in food bank advice.
When Angela Constance wrote to express Scottish concerns, she did not even get a reply. She got a five-page eulogy, declaring how wonderful the whole system is—a bit like the letter that I got from Lord Freud. It is yet another depressing example of the Conservative attitude to people who are in any kind of need. It is the same attitude that is found in “Oliver Twist” and which we have heard today from the Tories: “You want more!” You will not get more from the Tories. We have already seen people attacked with the bedroom tax and those on the disability living allowance being made to face humiliating interviews; and we have seen the loss of and cuts in payments, as well as statements that people are fit to return to work.
In Hamilton, Larkhall and Stonehouse, I have a constituent who is unable to leave his home and is reliant on a multiplicity of drugs. He has been told to go and stack supermarket shelves. He cannot even leave his wheelchair unaided. That is another example of the conscious cruelty of the Tory UK Government.
People are told that universal credit affects only means-tested benefits. Even that is not true. In complex cases, for example, where there is an enhanced care component for a disabled child, families are set to lose thousands of pounds a year and if they have a second disabled child, that figure will double.
Citizens Advice Scotland has told us that, after analysing 52,000 cases, it calculates that those on universal credit would have less than £4 a month to spend after paying bills—£4 a month. People in here spend more than that on a smoothie. The organisation also found that where the system has been rolled out in Scotland, there has been an 87 per cent increase in crisis grants, as I said earlier—an 87 per cent increase in crisis grants. That means that local authorities are picking up the pieces of the lives of people who are on a benefit has been cut by Westminster. That is not acceptable.
Since the Scottish Government introduced the scheme to provide some mitigation, it has paid out £132.6 million. That is a sticking plaster. It will not solve the problem and it is £132.6 million that is not spent on front-line services.
Universal credit has brought with it rocketing rent arrears, making eviction a constant threat. We have heard some of the horror stories from East Lothian. In South Lanarkshire, where universal credit will be rolled out this week, the council has had to put by £4 million just to deal with rent arrears. That £4 million is additional to the £132.6 million that is not being spent on front-line services.
As politicians, as representatives of our communities, we cannot stand silently on the sidelines. I welcome the fact that the Scottish Government has managed to secure a system that allows it the flexibility to make more frequent payments, but we have to pay for that. Charities and voluntary organisations have welcomed that flexibility. I hope that it will help to contain some rent arrears and make limited incomes a bit easier to manage, but it too is a sticking plaster, not a cure.
The Scottish Government has managed to fix only two of the multiple design flaws in the system. One that we still need to fix is the turnaround time for applications. I have people waiting six weeks. Yes, we have people waiting that long, but the brilliant volunteers at Hamilton District Food Bank tell me that people are waiting up to 12 weeks. They have seen young men in South Lanarkshire who have been waiting for 12 months—young men who are rough sleeping, sofa surfing, unemployed, self-harming and, in some cases, attempting and being successful at suicide. I will not remain silent on that.
Food banks in places where the system has already been rolled out are seeing double the number of people that they did previously. It does not take a genius to work out where that will lead us with 50 more roll-outs to go. However, the UK Government is determined to ignore that evidence. Theresa May and David Gauke should admit it and accept the figures. They have got it wrong and it is going to get much worse. They should accept reality and stop the roll-out towards oblivion. They need to rethink and put people at the centre of their plans instead of putting them on the streets.
Can there really be any doubt now that the way that the universal credit system has been rolled out is pushing more people into poverty? It seems that even people on the other side of the debate at least agree that it has not rolled out in the way in which it was intended.
I will vote for Alex Rowley’s amendment and join other political parties in making our voice heard in the Parliament to say that the roll-out of universal credit should be halted so that the serious flaws in the system can be resolved. The Tories should not misunderstand the position of Labour or any other party. Jeremy Balfour would not take an intervention but, if he had—[
I and many others would have said that not one of us got to our feet to defend the current system.
To a member, we have asked for the current system to be halted so that it can be fixed.
Citizens Advice Scotland calls for the freezing of the universal credit system. [
I just wanted to have some silence so that I could speak.
Citizens Advice Scotland and many other organisations deal day and daily with people who are at the receiving end of universal credit. Do we doubt them when they add their voices to the call for the policy to be frozen?
The universal credit scheme that we are debating is not as advertised. It was intended to create flexibility in the benefits system and get people back to work without losing their benefits. Alison Johnstone eloquently outlined the fact that the transition has not been like that for many people. In fact, there is evidence to support the idea that people have less money under universal credit than under the previous system.
The truth is that, for most people, the current operation of universal credit has been a swindle. It is not the scheme that they were promised. It is discredited because the Tories refuse to fix the fundamental problems that, if fixed, would make it a scheme worth defending.
Earlier in the debate, we were told that rent arrears were caused by the previous system and not by universal credit. However, the DWP’s evaluation found that 42 per cent of all claimant families who were waiting for a first universal credit payment were in rent arrears because of that. In fact, four in 10 households were in rent arrears eight weeks after their claim, so it is grossly unfair to say that the problems are because of rent arrears caused by the previous system. Let us see whether the five-day payment that has just been announced—the only response that we have had to the problems in the system, in relation to which the Prime Minister made promises this week, after saying that she accepted that those problems exist—resolves any of the deep-rooted problems.
Most people know that there will be a knock-on effect in wider society. When people are unable to pay their rent, landlords do not receive that money, and so on. There must be an acceptance that a failure to fix what is going on will result in a much wider problem in society.
Let us not forget that, at the moment, the roll-out of universal credit is expected to be accelerated. We are calling for a halt, but the Government wants to accelerate it. I would have some respect for the Tory position tonight if the party was at least asking for the system to be slowed down so that the problems could be fixed. Instead, however, Tory members seem to be supporting an acceleration of the system, even with all the flaws that it has.
The six-week period seems to have been built in to make things difficult for claimants. It is obvious to anyone that, if the support system for those who are already struggling is changed in such a way that extra time in which they are not paid is added in, those people will reach a crisis point. Areas with full universal credit roll-out have seen an 87 per cent increase in crisis grants issued, compared to a national increase of 9 per cent. Can anyone be in any doubt about this? Every part of the country is reporting deep-rooted errors. It is not just that the system is not working; it is that daily errors are being reported in the system.
Let us not forget that there will be a move to a fully digital system. I say to Jeremy Balfour that, although some of us—perhaps not all of us—might be fully conversant with digital systems, the problem is that many people cannot afford to be on the internet in the first place. Why would anyone design a social security system and not make allowances for, for example, the one in four people in Glasgow who do not have access to the internet?
There is overwhelming evidence from the CAB and the Trussell Trust that the six-week wait leads to debt, rent arrears and the use of food banks. The Church of Scotland’s briefing for today’s debate makes an important point. It notes that the design choices of the scheme reflect the experiences of wealthier members of society, ignoring the real-life experiences of the poorer people who are on universal credit.
I hope that the Tories, if they are not going to vote with us tonight, will at least do more to speak out to get those fundamental flaws changed and make the system the kind of system that it was supposed to be in the first place.
I am happy to speak in the debate, as it concerns a simple comparison of what is right with what is clearly wrong. The current system for universal credit is broken; the roll-out must be stopped and the system fixed. The six-week wait for the first payment of universal credit is pushing people into rent arrears, debt and crisis. When the Social Security Committee visited Musselburgh, we heard the real-life stories of people who are suffering, not the Disneyfication that we heard from Jeremy Balfour—we heard from real people with real issues, not Jeremy Balfour’s “When You Wish Upon a Star” ideals.
One gentleman had worked all his life but, because of his wife’s long-term condition, he was now her full-time carer. He said that he had rent arrears because of universal credit and was having trouble sleeping with the worry. Those are real people with real problems. This is not some cold and callous academic debate. As my colleague and friend Sandra White said, we are dealing with people’s lives.
The gentleman’s complaint was that there was no human contact from the DWP throughout the process. He showed me a tablet phone that he used as his sole source of contact with the DWP. He believed that there was no one at the other end of the conversation. He barely had the data allowance to send the information backwards and forwards.
When this man attended the jobcentre to talk to a human being about the problems that he had, he was told that the jobcentre could not help. That is not right. This is a man who, because of his current predicament, does not know where his next penny is coming from. That is not welfare reform; that is an on-going attack by the Tory Westminster Government on the most vulnerable in our society.
The Scottish Government wrote to the UK Government in March to express concerns and state that the policy is pushing more people into hardship and debt. It is not just the Scottish Government and the people who spoke to the Social Security Committee in Musselburgh who are saying such things; the call from the Scottish Government is echoed by 24 Scottish charities, as Alex Rowley and Alex Cole-Hamilton said. The charities include Shelter Scotland, the Scottish Federation of Housing Associations, Homeless Action Scotland, Citizens Advice Scotland, Oxfam and the Poverty Alliance. All those organisations are involved with people at the front line in dealing with poverty.
In their letter to the Scottish edition of
, all 24 charities said:
“Together, we believe the government must halt the roll out of the benefit so that these and other flaws can be fixed before they harm any more people.”
Those are strong words from organisations that normally just go about their work helping people. They are taking a stand because they know how wrong the policy is.
That is an important point to make. The evidence to the Social Security Committee was that none of the faults from the pilot programmes was ever corrected. We heard from Musselburgh citizens advice bureau that no one had fixed the problems from the pilots. The DWP kept cutting and pasting and moving the plan on. We should not listen to anyone here—and I will not be lectured by anyone—who says that the DWP is taking its time. It has cut and pasted the whole process all the way through, because of its sheer arrogance, and that is what is causing most of the problems.
The Social Security Committee has heard from local authorities about the difficulty with universal credit. One senior officer from Inverclyde went so far as to say that the roll-out needs to stop—a council officer said that it must stop. Council officers are aware that they work in a political environment and, nine times out of 10, they are very careful in what they say. However, that individual, in one of the areas where the full roll-out has taken place, said that the roll-out had to stop now.
Members do not need to take my word for it, or that of the council officer, about the many difficulties in the roll-out areas; here are figures from the DWP. One in four new claimants waited longer than six weeks for their first payment. Four out of 10 households were in rent arrears after their claim was made. One in three are still in arrears four months later, and four out of five have said that they had never been in arrears in the past. Many have taken to payday or doorstep lenders, which makes a very difficult situation even worse. In 2016-17, a total of 229,920 applications were made to the Scottish welfare fund.
The UK Government must stop ignoring the overwhelming evidence that shows the negative impact of the universal credit full service. To make the point further, John Cunningham of East Lothian Council—East Lothian is a full roll-out area—said:
“Now that the full service is operating, 82 per cent of council tenants in East Lothian, who receive Universal Credit, have some level of rent arrears.”
As we know, many of those people will never have had arrears in the past.
The UK Tory Government must take heed of that situation and of this Parliament, and it needs to look at the financial destitution throughout our country that is caused by its policy. Our communities are suffering as a result of the policy, and that is not the way forward. The UK Government must think again and stop the roll-out of universal credit.
I will add to what some of my colleagues have said. We accept that the roll-out of universal credit has produced some serious anomalies. We accept that, when some households have been transferred to the new benefit, there has been an extended period before they have received it, notwithstanding the fact that, as the DWP has said, the vast majority of claimants are paid on time and in full.
We accept that problems will inevitably exist when delivering a system of such magnitude. My plea today is that, across the chamber, when talking about issues that affect some of the most vulnerable people in society, we do so without hyperbole and with consistency. As Adam Tomkins said, universal credit is working.
To an extent, I accept what the member has said. However, does he also accept from this side of the chamber that, to respond to Jeremy Balfour, not everyone has rich parents or someone who can give them the money to get them through the six-week waiting time or even the five-day period? Mr Balfour is shaking his head, but he said what I am referring to. Some people cannot rely on their parents or others to give them the money. Does Donald Cameron accept that some people really are suffering?
Of course I accept that people are in that position, but independently reviewed research has shown that those who are on universal credit are more likely to move into work in the first nine months of their claim, with 71 per cent of claimants doing so, compared with 63 per cent of those on jobseekers allowance. Universal credit is inherently a better system.
According to the DWP, those on universal credit are, on average, earning more. Although we recognise the challenges that the new system presents, the early indications show that it is having the positive impact that it was intended to achieve.
No—I am sorry. I want to make progress.
Let me be clear: are we saying that the roll-out of universal credit has been easy? No, we are not. Are we saying that the change is simple and seamless? No, we are not. What we are saying is that, once fully implemented, universal credit will not only represent one of the most necessary overhauls of our welfare system in generations but deliver better prospects for those who need that most.
No—I want to make progress.
Rather than talking down the reform package, we should be discussing what the Parliament can do to make it work and what powers we can use to ensure that fewer people require to be on universal credit in the first place.
We know that, although full universal credit has not yet been completely rolled out, the UK Government expects all new claimants to be on it by 2018 and all legacy claimants to be enrolled by 2022. It is a long-term process, in any event; it is, rightly, not being rushed and will take a decade. It was first legislated for in the Welfare Reform Act 2012 and it has another five years to go. Progress should be patient and incremental so that we get it right rather than rush it. It is simply incorrect to accuse the UK Government of rushing the process. We in the Conservatives want it to work rather than fail.
No one has sought to create problems around delayed payments, and the UK Government and its agencies will do all that they can to ensure that the wrongs are made right. Every parliamentarian should be assisting those in our communities who find themselves in such circumstances. For that reason, I, like others, welcome yesterday’s announcement by the Secretary of State for Work and Pensions, David Gauke, that anyone who needs an advance payment will be offered it up front. Claimants who want an advance payment will not have to wait six weeks but will receive the advance within five working days. Further, if someone is in immediate need, the DWP will fast track the payment, which means that they will receive it on the same day.
I turn to the specific issue of how universal credit supports young people who are looking to get on in life. There is a series of exemptions to support the most vulnerable young people in our society, including those who cannot live with their parents, people who are in work or who have left work, and others who are in difficult circumstances.
We know that the youth unemployment rate is down across the UK, and the Fraser of Allander institute announced over the summer that youth unemployment in Scotland is at its lowest-ever recorded rate. Although that welcome data has occurred for a number of reasons, it is clear that more young people are working than ever before and that universal credit, which is primarily designed to get more people into work, is not creating the doom-laden impact that some would have it create.
No—I will not.
It is important to remind the Parliament of the good that the reform can do.
All of that said, I stress again the significance of the reform, which offers people a hand up and not a handout, because the principles behind universal credit are positive. Simplifying the welfare system is positive, ensuring that welfare rewards those who work is positive and reducing poverty is, of course, positive.
“we supported and still support the principles of a simplified benefits system”.—[
Official Report, House of Commons
, 7 July 2014; Vol 584, c 85.]
With such wide party-political consensus, let us make the system work. It will encourage work, encourage aspiration and, instead of trapping people in dependency, offer them hope.
I am sorry that Donald Cameron would not take an intervention from me about the flaws that have been uncovered in the Highland area, which we both represent. It seems that he lives in an alternative world to me and many others in the Highlands.
“If universal credit ... continues ... food banks won’t be able to catch everyone who falls”.
That is the stark warning that the Trussell Trust, which runs 400 food banks across the country, has issued to Theresa May. Charity after charity has lined up to point out what this flawed plan is doing, but the Tories just ignore them.
As one of the first areas in Scotland to have universal credit, Highland is already dealing with the impact of this ill-thought-out policy. I and Drew Hendry MP have been campaigning for many months to halt the roll-out of full service universal credit. I assure Mr Balfour that the UK Government heard of the flaws long ago, but it has taken no action.
This week, the UK Government’s own Tory back benchers are calling for a halt to universal credit. Twelve Tory MPs, led by Heidi Allen, have written to Mr Gauke to demand a pause in the national roll-out of the policy. I presume that the Scottish Tories are not involved, but it is clear that some Tories put their constituents before their party. Dame Louise Casey, who has advised four Prime Ministers—including Mrs May—on social policy over the past 18 years has joined the calls for the roll-out to be halted. Will the Tories ignore her, too?
What will it take for the UK Government to finally notice the devastating impact that universal credit is having on people? It is scandalous that the Tories defend the roll-out of universal credit when they can see the harm that it is causing. There is a damning litany of failure, confusion, heartache and indignity and a crushing drive towards increased poverty in the universal credit system.
I will not.
As other members have said, one of the main problems is that new claimants have to wait up to six weeks—and longer in some circumstances—before receiving their first payment. I know that it is very difficult for those who are in privileged positions and from wealthy backgrounds to understand it, but most ordinary people cannot manage to survive six weeks with no income, and a six-week delay is the official best-case scenario—in reality, it can be months.
Lengthy delays are pushing tenants to build up rent arrears, seek crisis or hardship payments and turn to food banks. I say to Mr Tomkins that rises in arrears have not been seen only in East Lothian. They are putting pressure on the budgets of Highland Council, which has set aside £650,000 to deal with the further increase in rent arrears that it is expecting. It has also employed four new staff, at a cost of £124,000, to prevent rent arrears. That money-saving exercise seems somewhat costly.
Earlier this year, Drew Hendry and I invited the Minister for Social Security in Scotland to a round-table meeting in Inverness so that she could listen at first hand to evidence of harm. We heard the story of a pregnant woman who had been forced to travel to Aberdeen to get a national insurance number before she could claim any money and the stories of many people with poor digital skills and connectivity struggling with no money. We heard how housing associations find themselves in the unenviable position of pursuing tenants through the courts, at huge public expense, for debt that is not of the clients’ own making. We heard staff who work in the council, the citizens advice bureau and housing associations describing the distress that they feel at being unable to help. The removal of implicit consent means that they can no longer act on behalf of their clients and that the clients have to navigate the system themselves.
The evidence of universal credit’s failure is there for all to see. The most powerful testimony that we heard at that meeting was from the Macmillan CAB service, which helps people who are terminally ill to put their affairs in order before they die. Terminally ill claimant forms cannot be submitted without the claimant verifying that they are terminally ill. That system forces those people to face up to something that they might not want to face up to and which they have the right not to face up to, if that is what they wish. By definition, terminally ill people have limited time. They are spending the last months of their lives worrying about their family finances, getting into debt and navigating an impossible system.
The general theme of folk being better off working or of making work pay is oft repeated by the Tories, and it underpins the ideology that is behind universal credit. I directly challenge my Tory colleagues in the chamber to tell us whether they imagine that terminally ill folk would be better off working. There is no response.
There is not just a problem with implementation, as the design of the policy is fundamentally flawed. It is not about making work pay; it is about making benefits punish.
Universal credit exemplifies the colossal lack of empathy and the incompetence that have become the indelible hallmark of the Tory Government. It is time to admit that universal credit is an expensive failure. Rolling out the scheme to thousands of people who are already struggling is cruel in the extreme. Stop it.
The idea of universal credit seems to have been around for a very long time. Adam Tomkins was right: on the face of it, its development has been painfully slow. We would therefore think that, having taken so long to propose, plan and develop the new system, the Tory Government might have got it right. Alas, nothing could be further from the truth.
I know that that is the case because my East Lothian constituency was the very first in Scotland to see—perhaps I should say “suffer”—the roll-out of the ironically termed “full service universal credit” in March last year. Therefore, it has almost 18 months of real experience. For my constituents, universal credit has not been painfully slow; it has just been very painful.
We now know for sure how painful it has been, because last week my two local citizens advice bureaux—in Musselburgh and Haddington—published a report entitled “Universal Credit in East Lothian: Impact on Client Income”. That snapshot looks at exactly what happened to clients’ incomes under universal credit compared with the six working-age benefits that it replaced. The results are stark: there are more losers than gainers, and the losers lose a lot more than the gainers gain.
Indeed, 52 per cent of CAB clients in East Lothian lose from the switch to universal credit and only 31 per cent gain, which is the reverse of the predicted results of and of the reason for desire for the change. What is more, the median loss in income from those who lose from the switch is £44.72 per week, with one client losing as much as £117 from their weekly support. Meanwhile, the median gain for those with an increase in income is 34p per week.
Previous analysis by Labour has shown that single parents will be worst hit by universal credit. The East Lothian research bears that out, although it also reveals that disabled clients are hit just as hard by the changes. The truth is that the new system, which was supposed to incentivise work, punishes those who face the greatest barriers, be they caring responsibilities or disability, to finding work. I say to Mr Tomkins and Mr Balfour that this is not a benign shift to a new streamlined benefit. For my constituents, it has been a straightforward cut in the money that they receive to live on.
It is worth reiterating that the report’s figures are facts. They are not speculation, but evidence of the real impact of universal credit. The East Lothian research clearly demonstrates the effect of the six-week wait for benefits under universal credit, too.
As Iain Gray well knows, the Social Security Committee visited Musselburgh in his East Lothian constituency to look at its roll-out of universal credit. We found that attendees, claimants and advice workers were supportive of the theory behind, and the aims of, universal credit. There was recognition that the system is new and that everyone is learning about it. One CAB advice worker said that having all six benefits assessed at the same time and having a real-time system are improvements. Will Mr Gray reflect on those remarks? That is evidence from his constituency.
I am happy to reflect on Adam Tomkins’s remarks, but I hope that I will get some time back, given how lengthy they were. I hope that he will reflect on the evidence in the East Lothian report, which is that no matter how happy the people whom he met may have been with the form filling, the net effect of the change to universal credit is a reduction in living standards for the vast majority of people who access the benefits system. That is caused in part by the six-week wait. The worst wait that has been reported to CABx in East Lothian and the Musselburgh jobcentre area was of six months—not six weeks.
This is not Donald Cameron’s “hyperbole”—the delays are having real effects on real people. In East Lothian, we have seen a 34 per cent increase in referrals to the food bank, which is the highest increase in any part of Scotland. The consequences of forcing people to prioritise between feeding their families and paying other bills are real and can be demonstrated.
I have mentioned to Mr Tomkins that we have seen a 20 per cent increase in rent arrears in East Lothian. He may tell me that the DWP has told him that the matter has been resolved, but if he comes to East Lothian Council, it will show him 1.3 million reasons why it has not been resolved. It is still dealing with rent arrears that have been caused by the six-week wait. He should bear it in mind that East Lothian is not a particularly deprived part of Scotland, although it has pockets of poverty. On the whole, it is wealthier than the average county, yet something has pushed more and more of its citizens on to the goodwill of friends and families, the charity of food banks, the tender mercies of credit companies and even loan sharks or, indeed, the iniquitous advances on future inadequate benefits. That something is universal credit.
Many of my constituents have paid a price not just in money or in their living standards, but in their health. East Lothian Council revenue staff who deal with people who are in debt or in arrears have for the first time been provided with suicide awareness training. Those are the real effects today, the reality, of universal credit as it is being rolled out. It should be stopped and fixed before those effects are seen across Scotland.
The damage that is being caused by universal credit has been clear to most members of Parliament and to many people outside it for a long time. It was clear in March, when the Scottish Government wrote to the UK Government to request an immediate halt to roll-out, because of urgent concerns about how universal credit was pushing more people into hardship and debt.
It was clear in June, when we debated the Child Poverty (Scotland) Bill at stage 1 and heard how the Tories’ disastrous welfare reform, including universal credit, is drastically increasing child poverty.
It was clear at the beginning of last month, when we debated Alex Rowley’s motion, which explicitly called for a halt to universal credit roll-out, and heard many harrowing stories and statistics that underlined why roll-out must be halted.
It was clear in the middle of last month, too, in the Tories’ housing debate, when member after member talked about how the damaging Tory welfare policies and cuts, again including universal credit, have caused an increase in homelessness across the country.
The evidence that has been gathered by committees has also been consistent in painting a picture of a flawed and damaging system, whether we are talking about this Parliament’s Social Security Committee, of which I am a member, or the House of Commons Work and Pensions Committee, which has relaunched its inquiry into universal credit roll-out as a result of its enduring concerns.
Outside the two Parliaments, charities across the country such as Citizens Advice Scotland and Shelter have been tirelessly highlighting the severe consequences of universal credit and calling for an immediate halt to roll-out.
I welcome the recent news that even some Conservative MPs—albeit that they are late to the game—are prepared publicly to acknowledge the indefensible and entirely avoidable damage that is being caused by the welfare policies of their Government. Fourteen Tory MPs, led by Heidi Allen, who sits on the Work and Pensions Committee, have written a private letter to the Secretary of State for Work and Pensions to demand a pause in roll-out. Just yesterday, speaking to the BBC, Allen criticised the hypocrisy of the Prime Minister when it comes to roll-out of universal credit, saying that the Prime Minister’s approach does not fit with her pledge to help people who are struggling to make ends meet.
Let me quote Allen directly. She said:
“These are the vulnerable people with no recourse to savings. We should be supporting them, because universal credit is about supporting people in work and helping them move up the working ladder and take on more hours.”
She also dismissed the Government’s advance-cash-payments solution as being like an
“Elastoplast being stuck on”, and pointed out that accepting the need for advance payments means accepting that the system’s fundamental design is flawed. That is the key point. Members on the Tory benches would do well to listen to their colleague’s interview in full. I will be happy to send them a link to it, if they want one.
Universal credit has also come in for strong criticism from former top Government adviser, Dame Louise Casey. She is also worth quoting at length. She said to the BBC last week:
“the overall strategy might be right, the overall intention might be right, but the fact of the matter is the actual delivery of it means that some people—because of the waiting time before benefit kicks in—will end up in dire circumstances”.
Nobody is against the principle of a simplified benefits system that helps people to get back into work, but the reality for my constituents, some of whom Jamie Greene is supposed to represent, is that the system is just not working. To expect someone to wait six weeks for money when they have nothing is to put them in an impossible situation. Tory members need to check their privilege and remember that we do not all have savings or have mums and dads who can lend us money when we start work. Tory members must start thinking about the reality. The principle is fine, but universal credit is not working and is causing harm and hardship for our constituents.
Dame Louise Casey went on to say that
“people ... will end up in dire circumstances—more dire than I think we’ve seen in this country for years, and that we have to stop.
And I think it’s okay occasionally to say we didn’t get the implementation completely right, let’s pause and see what we can do and at the moment everybody’s holding out with we’re pressing on, we’re pressing on, we’re pressing on. It’s like jumping over a cliff. Once you’ve jumped, people end up at the bottom and we don’t want that to happen.”
However, despite such stark warnings and even the threat of a Tory rebellion, David Gauke announced yesterday afternoon, at the Tory conference:
“Universal credit is working”, and confirmed that
“the roll-out will continue, and to the planned timetable.”
How arrogant. How heartless. Real harm is being done.
Despite warnings even from their own MPs, respected Government advisers, charities, parliamentary committees and the Scottish Parliament, the Tories are still pressing ahead with the damaging and destructive roll-out of universal credit in full knowledge of the consequences of their actions. They are choosing to push more children into poverty, more disabled people into despair and more vulnerable people on to the streets. Are the Scottish Tories proud of those actions, or do they have the courage to join their rebel UK MP colleagues in recognising the devastation that is being wrought by universal credit, and calling on the Government to halt its roll-out immediately?
One person who will be pleased with the UK Government’s decision to press on is Iain Duncan Smith, who has said that he sees no reason to delay or stop the roll-out. As a North Ayrshire MSP who represents towns and villages that are due to get full roll-out in November, I have more than a few reasons why I do not want my constituents to be at the mercy of this shambles. I see no reason for vulnerable constituents to be left for six weeks or longer without support, forced to rely on food banks and pushed into rent arrears and even homelessness. I see no reason for North Ayrshire Council and other local services to be put under immense staffing and financial pressures as they struggle to cope with the fallout. I also see no reason for the Scottish Government to have to keep diverting taxpayers’ money into mitigating what is a disaster, which leaves us standing still.
The UK Government must stop ignoring the overwhelming evidence of the negative impact of universal credit not just in Scotland, but in the UK. It is time for the UK Government to admit its mistake and immediately to halt the roll-out of universal credit.
I thank the organisations that provided briefings ahead of today’s debate. I recognise and take on board the concerns regarding the roll-out that have been expressed today and in recent months—including in my region, where universal credit has been piloted in Musselburgh, in East Lothian. I also pay tribute to and thank the CAB staff in East Lothian for the work that they have been doing to advise and support individual local residents. I visited the CAB office in Musselburgh in April to hear directly about the roll-out concerns, and have raised those concerns with the UK Government.
Many of the concerns that have been highlighted relate to delays in receiving benefit payments that are being experienced by people when they initially apply for universal credit. All members have raised those concerns today. I welcome the fact that the UK Government has acted on those concerns and has, this week, responded in order to assist claimants. The refreshed guidance for DWP staff means that anyone who needs an advance payment will be offered that payment up front and will not have to wait six weeks for it but will receive a payment within five working days. It is important that the UK Government makes sure that any reforms to our welfare system are done with people in mind.
We are all aware of the challenges and hardship that are caused by the six-week wait. Does the member honestly believe that simply giving benefits on tick is a solution?
Throughout this time, we have been hearing about the concerns and the UK Government has now responded to them.
Those of us who have met constituents who have experienced difficulties with the benefits system know that there have been a number of concerns, and we have made it clear that there must be payments for emergency situations. We Scottish Conservative MSPs have made sure that those people’s voices were heard by UK ministers. It is welcome that, in addition to claimants receiving the five-week payment, emergency payments will be made on the day when people need them.
Personal financial and budgeting advice will also continue to be available to claimants, and local authorities can make discretionary housing payments, too. As my colleague Adam Tomkins said, the Scottish Government has used the new powers that are available to it to allow Scottish claimants to choose whether they want payments to be received fortnightly instead of monthly, and whether the housing element of the payment is to be paid direct to their landlord, instead of to them.
Today’s debate will, no doubt, inform the DWP’s consideration of more issues around roll-out of universal credit, as will the concerns that have been voiced by UK members of Parliament from across the political spectrum. In addition, members of the Social Security Committee will have the chance to raise directly specific concerns with the Secretary of State for Work and Pensions when he appears before it.
We encourage the DWP to continue to respond to issues around roll-out as it goes forward to the delayed date of 2022. Although it is, of course, right that elected representatives voice concerns about specific issues around elements of universal credit’s operation, it is important—
No. I want to make some progress, and I have already taken an intervention.
It is important that we also remember why universal credit is being introduced and the overall vision behind what is the most radical reform of the benefits system in the whole post-war period. The welfare and tax credit system that was inherited by the UK Government in 2010 was massively complicated, ineffective and confusing. For too long, it also meant that for too many people it simply did not pay to move from benefits to employment. Indeed, the Labour Government’s old system actively punished people for trying to find jobs, so that in some cases, taxpayers faced a situation in which they would lose £9 of every £10 that they earned. It subsidised low wages at massive cost to taxpayers—something that even former Labour cabinet ministers have admitted was never intended. Above all, it failed to help young people to move into work.
Universal credit aims, as part of an integrated, responsive, modern and flexible benefits system to ensure that work always pays—
No. I do not have time.
The system provides high-quality support to help people to find employment. It is designed to take into account a claimant’s changing circumstances. The principle behind it has genuine and broad cross-party support, as we have heard today. No one is talking about going back to the old system. The evidence clearly suggests that universal credit can work and is making a difference. People who claim universal credit are 13 per cent more likely to be in work than those claiming jobseekers allowance, and are more likely to move into work within nine months of their claim, more likely to work on more days and are, on average, earning more.
To conclude, I welcome the UK Government’s action this week to address key concerns around people’s experiences of roll-out. As Conservative members have done from the outset, I urge the UK Government to continue to engage with stakeholders—including MSPs who have legitimate concerns—as we go forward. I hope that we can all unite around making universal credit a success in the future, and that it can help more people into employment—which is surely what all of us in this Parliament want.
The roll-out of universal credit has been a tragedy for many. That is not just because of the suffering and hardship that its implementation has caused in Scotland and across the UK, but because the creators of the policy have misguidedly combined and conflated a logical ambition for a simpler social security system with an illogical, ideological, right-wing austerity agenda that is intent on cutting budgets as a top priority, no matter what the human cost.
For clarity, universal credit is meant to deliver a monthly payment to help with living costs for people who are on low incomes or out of work. Therefore, in principle, we would think that it would support those in employment and positively encourage those who are unemployed and unable to work. However, that has not always been the case.
By frequently assuming the worst in people by default, universal credit—as it is currently designed and being implemented, which is the crucial point—not only causes unnecessary harm but often undermines its stated aim of getting people into sustainable work. Its punitive framework often exacerbates financial barriers to work, preserves low pay and causes in-work poverty. We should all remember that 60 per cent of UK households in poverty have at least one member who works.
As the Social Security Committee reported in 2016,
“although universal credit may” seem like
“a good idea, the practical implementation and how it’s resourced is causing real problems”.
As the DWP reported, around a quarter of new claimants have waited six weeks to be paid—six weeks with no money—and four in 10 households have ended up in rent arrears only eight weeks after a claim has been made, with four fifths of those never having been in rent arrears before. As the BBC reported last week, rent arrears that have been created because of universal credit have led to landlords in some areas across the UK advertising properties as “No UC”.
That is why the Scottish Government’s actions to use its limited flexibilities over the system are so important. They can provide Scottish recipients with the choice of more frequent payments and the choice of having the housing element paid directly to landlords.
In communities in Scotland and around the UK, universal credit is causing significant distress. Earlier this year, the Social Security Committee, which I sit on, went to East Lothian, where universal credit has been fully rolled out, to hear from claimants at first hand about the system. They told us distressingly about their demoralising experiences. One person said:
“I’m sitting up night after night worried I will lose the house. I can’t work and my great fear is homelessness”.
Others told us:
“It’s the uncertainty ... It’s supposed to be like work, but it’s not. Payments don’t come on time and you don’t know how much you are getting ... You get told payments will be backdated but that’s no good today, I need to feed my family”.
The way that universal credit is paid means that new claimants must wait six weeks before receiving their first payment. In East Lothian, one out of five claimants said that they had to wait two months for their payment, and there are cases of people having to wait up to 12 weeks. Although claimants are able to mitigate the wait, as we have heard, by taking an advance payment, which is called a short-term advance, we should be mindful that there have been problems and delays with them. Recently we have heard that those who need a cash advance will get one in—we are told—five days, or they will be fast-tracked on occasion. We will see how that is implemented. However, a crucial point, which other members have made, is that the UK Government is offering the advances only in the form of debt. They are loans that need to be paid back, and that is mean and unjust.
I am hoping for a halt, but if things proceed in the way that has been suggested, I hope that the implementation of the changes will be successful. However, the changes are not enough when people are in need. I have made the point to the secretary of state at Westminster that converting short-term advances from bureaucratic loans to up-front grants would be a good place to start with reforming the design of universal credit. That would be the empathetic and compassionate thing to do.
Universal credit has practical problems, but deeper reform of the system is required. Theoretically it is wrong-headed in its present form, which is another reason why its roll-out should be halted. Instead of providing encouragement, too often it creates fear. Instead of being places of support, too often DWP jobcentres are places of judgment, suspicion and mutual distrust. Adam Tomkins knows that that is the clear message that we got from evidence to the Social Security Committee. Instead of reliably providing support to those in need, too often universal credit uses threats to push people into any job at any human cost. Then there is the cruelty of sanctions.
Fundamentally, any continued roll-out of universal credit would be foolish and reckless when so many practical problems exist, when conceptually it is so misplaced and when in communities across our country it is putting so many of our fellow citizens in positions of anxiety, distress and often alarm. Twenty-four Scottish charities and at least 12 Tory back-bench MPs have called for a halt. Today in this Parliament we must call for a halt. In good faith, I hope that the Scottish Conservative MSPs will reconsider their position, be part of that call and use any influence that they have with the secretary of state—if they have any—to get him to do the right thing and, at the very least, press pause on the wrong-headed roll-out of universal credit.
As has been pointed out by other members in the debate, one of the glaring flaws of the universal credit roll-out process is the length of time that it will take for claimants to receive their first payment. It can be anywhere from six to 12 weeks in some instances—Shelter Scotland has advised us that nine weeks is not uncommon—and that exposes claimants to serious financial jeopardy.
Yesterday, in response to increasing pressure, not least from his own party, the UK Secretary of State for Work and Pensions announced to the Tory party conference that, although he understands concerns, he will press ahead with the accelerated full service roll-out of universal credit. However, he will update advice to the DWP to ensure that claimants who require it can get advances, which will be paid back over several months, as we have already heard. That is nothing more than a sticking-plaster approach to the flaws in the new system, and the announcement has led to people with a wide range of opinions calling for the roll-out to be not just paused but halted until all areas of concern have been addressed.
On the face of it, the idea of simplifying the benefits system to a single payment may have seemed a reasonable idea at one point in the past. It was said that integrating several benefits into one payment would remove complexity from the application and payment processes. However, such a major change to the UK benefits system involved significant IT development and a level of complexity that was not recognised by the Government from the outset.
The reality is that the design and implementation of the universal credit system have been fraught with issues every step of the way, mainly because an important factor appears to be missing from the scope of the project: the lived experience of the vulnerable and the in-work poor, who the significant change is about to impact.
More emphasis was placed on making the technology work for the department than for the customer. Criticism from the National Audit Office and Westminster’s Public Accounts Committee led to a relaunch of the project four years ago. However, seven years from the original IT project launch, problems persist and criticism is mounting on the back of damning evidence from the pilots and partial roll-outs in a small number of local authorities, as we have heard today.
Apart from the disturbing length of time that claimants are expected to wait for their first payment, the housing benefit element in the UK Government scheme is no longer paid directly to landlords. Claimants are expected to get the housing benefit to landlords themselves and, for a significant proportion of claimants, that can be challenging. As a result, many have fallen into rent arrears and a spiral of debt. Figures supplied by the DWP have shown that many of the universal credit claimants who have fallen into arrears with their rent said that it was the first time that they had fallen behind with payments in their current accommodation. Some of those affected might be lucky enough to have the support of friends and family, but the same DWP figures found that around one in 10 claimants turned to payday or doorstep lenders.
As we have heard from other members, aside from the human impact, there is a financial risk to councils where a high percentage of tenants who are on universal credit are in arrears. Data from COSLA suggests that the level of rent arrears for tenants in the new system is at least two and a half times that for those who are in receipt of housing benefit. Some local authorities have had to put millions of pounds aside to deal with the impending impact of the roll-out and, as Christina McKelvie said, South Lanarkshire Council—my local authority—has had to put money aside for that reason. In authorities where universal credit has already been rolled out, there has been a significant increase in applications for Scottish welfare fund crisis grants and community care grants.
The project is not just about simplifying the benefits system. We should not lose sight of the fact that the so-called flagship universal credit policy was introduced as part of the Tory austerity project to cut £12 billion from the welfare bill. Many new universal credit claimants will receive significantly less than they would have done under the tax credits system.
No, thank you.
Shamefully, continuing UK Government welfare reforms have left more and more families throughout Scotland and the rest of the UK in crisis situations.
It should not be for the Scottish Government to continually plug the gaps that are left by UK welfare reforms or to paper over the cracks of the Tory Government’s mistakes and incompetence in the universal credit debacle. Nonetheless, the Scottish Government has invested over £350 million in supporting low-income families against the worst of the UK welfare reforms, including mitigating the bedroom tax and helping more than 250,000 individual households through the Scottish welfare fund.
This Government is committed to restoring housing benefit for 18 to 21-year-olds, who are sometimes forgotten when we debate housing and benefits, and to extending the Scottish welfare fund in the interim to help those in that age group, who are currently excluded from financial support, to receive assistance with housing costs. The Scottish Government will also use what flexibility it has negotiated with the UK Government over the system to provide Scottish recipients with more frequent payments and for the housing element to be paid directly to all landlords.
Although the Scottish Government is committed to doing what it can to mitigate some of the effects of changes to the UK welfare system, the fact remains that a full service roll-out of universal credit will bring untold misery to hundreds of thousands of families and individuals across Scotland and the UK. It should be halted immediately until the glaring flaws in both systems and processes—highlighted by many organisations, including charities and Scottish and UK parliamentary committees, and even by Tory MPs—have been rectified. Better still, let us devolve all welfare provision to this place, because we will guarantee a Scottish social security system that treats people with dignity and respect.
Sometimes in the governance of human affairs we make collectively bad decisions, or we inadvertently, through the application of social policy, harm those of our citizens whom we seek to help. When that happens, it is essential that we pause and reflect. It is quite evident from the debate, and from the myriad of examples and heart-rending stories of people who have suffered the inadequacies of the accelerated roll-out of universal credit, that that has happened. We are harming people and it is time to stop.
Jeane Freeman rightly referenced at the top of the debate the groundswell of opposition to the continued unchecked roll-out of universal credit from political parties, including some 12 Conservative MPs. She reminded us of the problems associated with rent arrears, which can result when the housing component of universal credit is delayed in the switch-over, leading to a level of uncertainty for tenants—and, to a lesser extent, landlords—that is frankly intolerable. That theme was picked up by many members in the debate.
The Scottish Government’s commitment to the direct payment of housing benefit to landlords rights a wrong that has very narrowly been averted. Many people in the voluntary sector have spoken to the Government, as I have done, about the impact that not paying benefits direct to landlords can have on families where drug and alcohol misuse is a factor, because those families will prioritise addiction over the payment of rent.
I welcome the amendments in the names of Alex Rowley and Alison Johnstone. Mr Rowley spoke eloquently of his incredulity that a Government would knowingly plunge its most vulnerable people into poverty and further uncertainty. Alison Johnstone pointed to the vast accumulation of empirical evidence that now exists in respect of the flaws around the roll-out. I assure them both of the support of Liberal Democrat members for their amendments tonight.
Had it not deleted important aspects of the Government motion, we would have had some resonance with certain themes in the Conservative amendment. It rightly captures comments from the Joseph Rowntree Foundation that reflect an approach to the pursuit of social mobility where the universal credit still holds water. Adam Tomkins spoke in measured terms about his recognition of the problems associated with the roll-out, and that is welcome, but his party has been shown to be unequal to the task of rectifying those problems. I do not doubt his motives, but too much harm has been done for us not to intervene in the way that the Government motion proposes.
Sadly for Professor Tomkins, that measured tone was dropped by Jeremy Balfour. Although I respect Mr Balfour greatly, I think that he misjudged the mood and intent of the chamber. I do not think that anyone who spoke in the debate has suggested that we return to the systems of the past—a point that was made eloquently by Pauline McNeill. However, the tone was recovered for the Tory benches by Donald Cameron, who gave a considered speech in which he accepted flaws but sought to talk up the positives of the universal credit. However, those positives are eclipsed by the flaws. The flaws in the process have been identified by members all round the chamber and they have an undeniable human cost, which now casts a terrible shadow over the improvements that it first promised. That was measured out for us by Iain Gray in pounds and pence.
On the issue of flaws, does Alex Cole-Hamilton agree that one of the things that exacerbates the problem with universal credit is that, when the roll-out takes place in November and December, the effects will be felt over the festive period, which will make it worse for folk, notwithstanding the six weeks that it will take plus any additional time after that?
Mr McMillan makes an important point about the clunky way in which the process has been undertaken without any thought for the wraparound issues of seasonal differences.
George Adam spoke about the impact on council officials who, although usually encumbered by political restriction, are now compelled to speak out given the frustration and hardships that the system is causing and which they are having to deal with.
Tensions in today’s debate have, understandably, run high. I would, however, be grateful for clarification from the minister and confirmation of her Government’s support for the basic principles of universal credit. Contributions from some of her back benchers perhaps suggest otherwise. If our parties are to work together to address the impact of universal credit and to tailor aspects of the system over which we have control, we need that clarity.
That said, I am grateful for the consensual attitude adopted by the Government in the debate and for the intimation that it will support our amendment. I heartily welcomed the announcement in February that the Government would seek to split universal credit payments across households and our amendment restates that commitment as we believe that it is absolutely vital to tackling financial abuse as an element of coercive control. Research suggests that 89 per cent of all women who suffer abuse experience financial abuse as part of that. Engender responded to the February announcement by saying:
“By deciding not to endorse UK Government policy measures such as the single household payment for Universal Credit the Scottish Government can support women’s financial independence and reduce the ability of perpetrators of domestic abuse to control their partners and their children.”
It is a straightforward proposition and we have the tech to do it. I do not think that I am being overly dramatic when I say that a moral imperative now exists for us to make this change.
I am heartily glad that, through the Scotland Act 2016, the Parliament will be empowered in a way that will allow us to address the giant evils that William Beveridge described 80 years ago, with a particularly Scottish response in the direct payment of benefit to landlords, in reinstating housing benefit for under-21s, in the eradication of waiting days while applications are processed, and in splitting payments across households in an effort to reduce domestic abuse. I am persuaded that enough consensus exists across the chamber to make this work and for us to work together in pursuit of those aims. I therefore offer our support tonight.
“recognises serious criticisms of the way that initial payments are delayed and the impact of these delays on vulnerable people”.
However, I do not, as he does, welcome the Secretary of State’s announcement that
“claimants wanting advance payments will get them within five days”.
Like many in his party, Adam Tomkins seems to believe that advance payments are the answer. Advance payments are not the answer. We have to halt the roll-out of universal credit.
The Conservative amendment and several Conservative speakers have drawn attention to the availability of advance payments. They might be welcome as better than nothing, but surely they are essentially an admission that the system is not working.
“Getting some money to people of course is welcome but if we are essentially celebrating the fact that advance payments are increasing and will increase, that means that the fundamental design of the system, which is a minimum six weeks to wait, doesn’t work.”
Several members also referred to Heidi Allen’s statement that
“It feels like an Elastoplast being stuck on”.
It very much does.
Professor Tomkins is very fond of quoting the Joseph Rowntree Foundation, and his amendment references the organisation’s work. The same report, however, cautions against the use of benefit advances, saying:
“The widespread use of benefit advances is not the solution to this problem, as they result in an accumulation of debt. To reduce debt and destitution, people who are entitled to, and in need of, income support should receive it quickly.
I note the use of the word “arbitrary”. Arbitrary means “random”, and we have a random figure that has been plucked from the air. We really have to get to grips with that as the main issue.
The report goes on to criticise cuts to the universal credit work allowance and the impact on poverty, stating that
“changes to Universal Credit ... have reduced the level of support available to low-income working households”.
How on earth, therefore, are those households going to pay back the debt? The report adds:
“Reductions in the UC Work Allowance ... alone is responsible for a quarter of the projected increase in poverty among children in working households by 2020/21”.
The report goes on to say:
“High-quality evidence shows more money directly improves child development and health outcomes ... Yet support for families with children is being reduced.”
Perhaps the Conservative member who is giving the party’s closing speech can explain the grounds on which the Conservatives think that universal credit will reduce poverty, because all the evidence points squarely in the other direction.
The Money Advice website shows how people can claim. It gives an example of a chap called Ben. Ben loses his job and makes a claim for universal credit on 15 July. If he is lucky, he gets some money on 29 August. That is simply untenable—the system really has to change. People who are vulnerable, such as the terminally ill, have to wait for up to five weeks, which is not good enough.
We have heard from others about the Trussell Trust, which warns that more and more people are using food banks. I suggest that the connection between universal credit and increased food bank use is clear to see.
We hear that some of the evidence is anecdotal. I will quote some of the contributions to the Commons select committee’s web forum on universal credit roll-out, which I looked at earlier today—it is open until 13 October, if anyone who is experiencing the roll-out would like to contribute to it.
One person said:
“The initial application was not easy because I didn’t have access to a computer”.
Referring to payments received, one person commented that they were “late, wrong or both”, leading to eviction. The forms were described as “complicated”. Another person commented that she lived off food banks and £38 a week child benefit. Someone else stated:
“I would try calling the helpline, but ... was put on hold for so long the batteries in the phone would run out.”
“I get my rent element with my universal credit, however it is paid ... in arrears and I get constant letters from my landlord threatening me with” eviction, leading to health issues and stress.
We really have to halt the roll-out of this system. Last Thursday’s
Courier spoke about the universal credit rent arrears threat to Angus Council’s housing programme. The authority’s strategic director, Alan McKeown, said:
“We build houses that people are proud to call home but the introduction of Universal Credit could be one of the biggest threats to social housing budgets.”
There are real concerns about arrears and of course the ultimate sanction of eviction, which will lead to more people becoming homeless. The authority is very anxious that its plans to build 600 new homes could be impacted.
The architect of universal credit, Iain Duncan Smith, has criticised the cuts to its value. Just yesterday, at the Conservative Party conference, he said that reductions made by George Osborne were part of the reason why he resigned as Secretary of State for Work and Pensions.
My response to Jeremy Balfour is that, as others have suggested, no one has said that the current system could not be made better—absolutely no one. However, if we want to get this right—if we really want to simplify it—we have to make sure that payment arrives in a proper amount of time after someone has found themselves in the vulnerable position of being unemployed; that people are paid as quickly as possible; and that we do not cut the value of the assistance.
In the joint public issues team, the
Church of Scotland, the Baptist Union of Great Britain, the Methodist Church and the United Reformed Church have come together to say that a key role of the benefits system is to provide a sound platform to allow families to regroup and cope with the difficulties that they face. For many families, especially those with children, universal credit does not allow that stability and pitches families from one crisis to another. It simply is not good enough. We can and we must do better.
Many of the design choices for universal credit reflect the concerns and experiences of the wealthier members of our society, including policymakers and politicians, and ignore the lives and experiences of those who will rely on universal credit for food, shelter and warmth.
Pauline McNeill referred to that in her speech—it comes from an excellent joint briefing from the Church of Scotland, the Baptist Union of Great Britain, the Methodist Church and the United Reformed Church.
It sums up precisely what is at the root of the problems behind universal credit: policy designed with lofty ambitions but with no basis in, or knowledge of, the real-life experience of people who live on social security and are surviving week to week.
When we talk about people living—or, to be more accurate, surviving—on social security, we are often talking about people who are sometimes choosing between heating and eating or who are one unexpected bill or a washing machine or boiler breakdown away from not being able to provide for their families. How anyone can expect families who live in those circumstances to have saved six weeks’ income is beyond me.
Christina McKelvie mentioned the statistics that Citizens Advice Scotland published. It reported a 15 per cent increase in rent arrears issues in comparison with a national decrease of 2 per cent, and an 87 per cent increase in crisis grant issues in comparison with a national increase of 9 per cent. Two of the five bureaux in impacted areas have seen increases in requests for advice about access to food backs of 40 per cent and 70 per cent in comparison with a national increase of only 3 per cent. People are experiencing a significant impact on their finances and wellbeing as a result of the six-week wait for payment.
The Tory Government’s plan to continue to roll out universal credit in the face of the issues highlighted by Labour and Scottish National Party members and by the Tory party’s own back benchers—as well as by the third sector, churches and others—is cruel and completely indefensible. A six-week waiting time is making it impossible for some households to pay rent and feed themselves. People who do not have the skills or facilities to access the internet could be excluded from fully engaging with the benefits system, and administrative errors are preventing claimants from accessing some or all of the income to which they are entitled. A scheme that was supposed to be designed to simplify the benefits system has, instead, created barriers and complications for claimants—for example, it has created the need to support individuals outwith the universal credit system through crisis payments.
“no-one will experience a reduction in the benefit they receive as a result of the introduction of universal credit” but now
“the independent Office for Budget Responsibility has said that universal credit is ‘less generous on average than the tax credits and benefits systems that it replaces’”.
I agree with some of what Adam Tomkins said and some of what is in his amendment. However, the core purpose of universal credit—that work should always pay—would be taken more seriously if in-work benefits were not being cut. As Iain Gray said, research that we have done shows that single parents with children will be worst hit by universal credit and will receive up to £3,100 a year less than they received through tax credits. That is a massive hit on any family budget and another example of Tory attempts to balance the books at the expense of the poorest. It is shameful that, in Scotland, there are currently 420,000 working-age adults and 180,000 children in in-work poverty. Universal credit will only make that worse and it must be halted and redesigned.
However, brutal Tory welfare reform is not limited to universal credit. The UK Government has callously ignored the fact that limiting child tax credits to the first two children in a family will push another 200,000 children across the UK into poverty.
On the six-week waiting time, we have heard that some people who are starting work take a loan to pay for their travel costs or family expenses. The fact is that when they go to work, they do so in the knowledge that the wage that they will receive is much higher than the paltry benefits that they would receive on universal credit. Those benefits have been frozen and the support package has gradually been eroded year on year by that freeze and the increase in the cost of living.
Senior and back-bench Tory MPs have also expressed concerns about universal credit, and 12 MPs have now signed a letter to David Gauke demanding a pause in the roll-out. I hope that, in the face of overwhelming evidence and cross-party calls for a halt to the roll-out of universal credit, the Tory Government listens.
We must recognise and appreciate a significant point that has come from today’s debate—namely, that we all agree on the underlying aim of universal credit, which is to get people off benefits, into work and out of poverty. However, it is clear that the strength of feeling on the issue is not equal across the chamber, with only one Green member, one Liberal Democrat member and a mere four Labour members in attendance. Perhaps they are protesting in Manchester, or perhaps they agree with the Labour MP Stephen Timms, who, when he was shadow Minister for Employment, said that universal credit is
“a reform which, even though it’s now running four years late, we still want to succeed.”
Perhaps some members are not in the chamber because they are in their offices dealing with constituents’ complaints about, and the fall-out from, the Tories’ brutal welfare reforms.
I am sure that members on the Labour benches—which are, indeed, for the few, not the many—are unlikely to be in their constituency offices at this time. If they really care about the issue, they should be serving their constituents here in the chamber.
The substantive point is that universal credit is a simpler system that encourages work and supports aspiration. Claimants are more likely to be in work and more likely to have more work available to them and, on average, they will earn more than those who claim jobseekers allowance. Universal credit is part of a welfare state that gives people the help that they need but does not trap them in dependency.
The member does herself a disservice by bringing that up. It is clear that universal credit is delivering and that more people are earning more through universal credit than they would through jobseekers allowance. That means that they are being moved out of poverty, which is, ultimately, delivering for the people of Scotland and the United Kingdom.
Equally, we must recognise that there have been issues with the implementation of universal credit. That point has been made across the chamber. However, the main issues have been addressed. The frequency of payments and the fact that housing payments were not being made to landlords were both prime topics of concern. We have supported the move to change those positions and alleviate concerns. As we have heard, that is down to this Parliament having the ability to modify how universal credit is administered. That is devolution in action—the policy operates as a reserved matter but it has the ability to be modified according to the motivation of the devolved Administration. It is no longer sufficient just to offer criticism; this Parliament must continue to offer solutions.
Although I am pleased that this Parliament is taking action to tailor universal credit to best suit Scotland’s needs, it is only right to recognise that the UK Government, as we heard from Adam Tomkins, has been taking the issues seriously and looking for ways to solve problems and improve how the system works.
Just yesterday, the UK Conservative Government took action on the other major challenge that has been highlighted with universal credit—delays in claimants receiving payment. Now claimants can receive payment within five days or even on the same day, in the case of an emergency. That not only shows that the UK Government is listening to concerns but demonstrates that implementation of universal credit is an evolving process that the UK Government is determined to get right.
I was enormously encouraged to hear David Gauke say that he will not be rushed into implementing universal credit. That is a sensible approach to take. It is better to get it right than to do it quickly.
The concerns and disagreements that we have are on practical matters; the substance of universal credit is on firm ground. I have heard nothing today to convince me otherwise.
I am in my last minute.
Reforming a benefit system is of course not easy, but it is necessary. The SNP knows all about issues with roll-outs—we can think of the common agricultural policy farm payments fiasco, for example.
In this Parliament, we have a devolved Administration, and it is at its best when it delivers on the promise of devolution. Let us continue to scrutinise, to engage and, where appropriate, to act so that we make sure that we get it right.
With a UK Government that is determined to succeed and a Scottish Parliament that is embracing devolution, Scottish claimants now have more certainty that they will get the support that they need, on time and in the way that they need it. I urge the Parliament to support the amendment in the name of Adam Tomkins.
I thank members from across the chamber for their contributions.
We have heard evidence from SNP and Labour members—facts from constituents, as well as powerful testimony, particularly from Maree Todd and Iain Gray. Many organisations across Scotland that have been referenced have given their strong views and evidence—facts again—on the direct, harmful and personal impact of universal credit, in the form of increased rent arrears, increased debt, use of food banks and crisis loans.
The DWP admits that one in four new universal credit claimants wait longer than six weeks. Half of new claimants need a DWP loan. Nearly one third borrow from family or friends and at least one in 10 turn to payday or doorstep lenders.
The Scottish Government’s view is that social security should be there to provide help and support when we need it. Any one of us could need it. It should never penalise people or worsen an already difficult situation. However, the current UK welfare system does precisely that through system failure and political choice.
Alex Rowley was right in his assertion about the systemic problems of excluding individuals who do not have access to or the skills to manage an entirely digital system, about the absence of sufficient support and about the fact that people have to pay to call the phone line. All of that is correct, and I am happy to support not only his amendment but the sentiments that he and his colleagues expressed.
I am also happy to accept the amendment in the name of Alex Cole-Hamilton. To answer the direct question that he asked me, I support a simplified system that is genuinely accessible, which provides social security support that helps people into work and which supports those for whom work is not a viable option.
I also support a system that is not wilfully and maliciously used to save money on the backs of those who can least afford it. That is precisely what we have from the UK Government’s welfare system. I say to Mr Cole-Hamilton not only that that is my view but that, if the Scottish Government is given the powers, we will show him how it might be done.
We have been told repeatedly—and through selective quoting—that the point of all this is to make work pay. What arrant nonsense. If that truly was the point, the Conservatives would act to ensure that the real living wage was introduced; they would act to end contract-legitimised exploitation; they would act to end the situation where 60 per cent of UK households that are living in poverty have at least one family member in work; and they would act to make sure that the Institute for Fiscal Studies estimate of an additional 1 million children being pushed into poverty by UK welfare cuts does not happen.
I support the amendment in the name of Alison Johnstone. I agree completely with her that a family who make a new claim under full service universal credit will, on average, get a lower award than if they had made the claim under the legacy system. A recent Scottish Government report estimated that a couple with two children, where one parent works 16 hours a week, will be £1,700 per year worse off by 2021 as a result of the changes to universal credit since 2015. Let us not forget that it is the cuts to tax credits and third-child payments within universal credit that have resulted in the heinous and appalling rape clause that my Conservative colleagues over there continue to collude with and deflect from.
I turn to the Conservatives’ position. I say to Mr Balfour, with the greatest respect, that if you are genuinely concerned about disabled people moving into work, you will oppose the cut to employment and support allowance and oppose the reduction in the number of mobility vehicles that colleagues and others across the country are facing as a result of the position of the UK Government, which you defend.
I say to Mr Cameron that you take a lovely Pollyanna view of the world: take time, be patient and it will all be better one of these days. Your UK Government knew in 2013—and again in 2014—of the systemic flaws and policy flaws of universal credit, yet you persisted in rolling it out and you continue to persist in that.
I say to Mr Briggs that I am absolutely certain that you are a very nice man, and you sounded like a very nice man. Unfortunately, you completely failed to address the central point of my motion and the amendments from my colleagues in the rest of our chamber, which is that there are systemic and fundamental flaws in the roll-out of universal credit that the UK Government, which you insist on defending, refuses to address.
Now let me turn—
Ms Freeman, just stop there for a second. I appreciate that you are winding up and addressing members, but will you try not to refer to them as “you” and try to use members’ names or their titles and names? Using “you” is too personal. Thank you.
Certainly, Presiding Officer.
I turn to Mr Tomkins. I am glad that the Conservative amendment offers support for the choice that the Scottish Government has made, which we will introduce from tomorrow. However, I have to wonder how it is possible to square the support for the choice of payments of rent directly to landlords and twice-monthly payments with the fact that this Government has been forced into a position of paying the DWP to deliver a choice that my colleagues in the Conservative seats support.
I am sure that the clarification that Ms McKelvie and Ms Johnstone provided on the full Joseph Rowntree Foundation position is welcome, and I look forward to hearing that quoted at length in the future. We know from briefings that have come to members from a list of organisations, and we know through the press and from our work as constituency and regional MSPs, that organisations are saying loud and clear that all the facts and all the evidence tell us that universal credit should be paused and its problems fixed. Those organisations have more direct experience of matters than I have and—I suspect—just about anybody in this chamber has, but they and their evidence are ignored in the Conservative amendment. What arrogance it is to ignore that. I do not understand the rationale for ignoring all those facts and all that evidence.
We cannot say that you do not know, so I assume that there has to be a choice, which every one of the four UK secretaries of state has had, to act on the evidence and fix the systemic and policy failures of universal credit. Every one of them has failed that test. Every single one has made the political choice to ignore the human catastrophe that they are creating.
As this Parliament votes to demand that the UK Government halts the roll-out of universal credit, I have to put a question directly to my Conservative colleagues. What political choice will you make? Will you act on the evidence that you have heard here today and elsewhere, or will your party come first?