Skip to main content

Universal Credit

Volume 559: debated on Wednesday 6 March 2013

[Relevant Documents: The Third Report from the Work and Pensions Committee, Universal Credit implementation: meeting the needs of vulnerable claimants, HC 576, and the Government response, Cm 8537.]

Motion made and question proposed,

That, for the year ending with 31 March 2013, for expenditure by the Department for Work and Pensions—

(1) further resources, not exceeding £507,034,000, be authorised for use for current purposes as set out in HC 894,

(2) further resources, not exceeding £97,653,000, be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £2,133,672,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Mr Swayne.)

On 22 November last year I was privileged to launch in the Chamber a Work and Pensions Committee report entitled “Universal Credit implementation: meeting the needs of vulnerable claimants”. That day I was the only one officially allowed to speak. As a result there are a number of hon. Members who are—I was going to say frustrated—itching to speak. I hope they will have the opportunity to do so now.

That day showed that there was huge interest in various aspects of universal credit and its implementation, so it is excellent that we have the chance to have this debate today, especially as the Government have now published their response to that report and we can look in more detail at the issues raised by the Select Committee. I expect hon. Members will also raise their own issues that we did not examine. It is a good time to revisit the findings of our report to see whether, three and a half months on, the Government have made progress in addressing some of our concerns. This has become more urgent because the first claimants in the pathfinder areas will begin to be assessed for universal credit in just over a month, and the roll-out for new claimants begins in October this year.

Universal credit is the Government’s flagship welfare reform. Everyone of working age who claims one or more of the many income-related benefits will, over the next four years, be moved on to universal credit. Some 8.3 million households will be affected once it is fully rolled out. Not all of them will be on the new universal credit, but they will be affected in some way, so if universal credit does not work in the way that it is designed to do or if the IT fails to deliver, it has the potential to cause a great deal of stress and anxiety in families who depend on the state for some or all of their income.

The size of the Government’s ambition in introducing universal credit became clear to the Select Committee as we began to receive evidence. Such a large-scale reform of the benefits system has so many aspects to it that we realised we would not be able to cover all the provisions in detail. We did not have time to explore fully all the incentives and disincentives to see which families would be better off and which would be worse off, who would lose money and who would manage to survive. Other questions were raised with us that we did not deal with in as much detail. Would families with high child care costs be better or worse off, for instance?

We did not have time to interrogate properly how robust the Government’s often repeated assertion is that under universal credit all people would be better off in work than not in work under all circumstances. Some doubt has been cast on whether that will be true. We know that under the system there will be notional losers, although the Government have promised that there will be some cash protection. We were aware, for instance, that second earners in the family may not mean that the family is better off under universal credit. We were aware also that families with particularly high child care costs might not be better off once those are factored in.

The reason it is often very difficult to reform a complex welfare system, of the kind we have in this country, is that there can often be unintended consequences, and I am sure UC will be no different. I am fairly sure that Ministers will admit that that is bound to be the case. Even if everything goes incredibly well, there will be unintended consequences. The real test for the Government will be how adept and quick the Department for Work and Pensions is in dealing with the inevitable blips; how it irons out the kinks, how it ensures that families do not face difficulties while it sorts out any problems and how quickly it responds when the inevitable difficulties arise.

It would have been impossible for the Committee to give detailed consideration to every aspect of universal credit, so we decided to concentrate on its implications for vulnerable claimants, which explains the report’s title. Not all benefit claimants are vulnerable; far from it. It is worth remembering that most people of working age who receive benefits are in work and are not dependent on the benefits system for all their income. However, it is probably true to say that all vulnerable people are benefit claimants. It is therefore imperative that the Department takes account of that and does not design a system that can be accessed only by people who can manage their lives fairly well. It must also be easy to navigate for someone who finds life a struggle. I mean someone who struggles to pay their bills, struggles to follow basic written instructions, struggles with poor health, struggles to use public transport, struggles to heat their home or struggles to put a nutritious meal on the table—someone who just struggles with daily living. Those are the people who face a complete overhaul of the benefits they receive. It was to those who might find the introduction of universal credit a real challenge that the Committee paid most attention.

The biggest barrier a vulnerable claimant might face is making a claim in the first place, because the Government are determined that universal credit will be an online benefit—“digital by default” is the phrase they use. The application will be made online, any change in circumstances or other information will have to be reported online, as will any change of earnings, but the sting in the tail is that the information might come from Her Majesty’s Revenue and Customs, so obviously the information has to get from HMRC to the DWP computers.

The most important aspect of universal credit’s delivery will be the IT. If it goes wrong, the whole system will grind to a halt. However, a digital system, in order to work, requires users—in this case the claimants—to have access to, and be able to use, the internet. There is still great concern that the people who need to apply for universal credit will not have access to the internet, or indeed to a computer, in order to make the claim in the first place and that, for those who are not computer literate, there might not be sufficient help for them in the right place.

The hon. Lady makes an important point about accessibility. Does she share my concern that 36% of low-income households in Scotland do not have internet access at home?

The figures the Committee received vary greatly. We were told that as many as 80% of claimants might struggle with some of the IT and that as few as 20% would not have internet access. Although some people might be able to use Facebook and other social media sites, that is quite different from making a claim that, by its nature, has to include very personal information. Many people who do not have a computer at home might not be able to use computers in the public domain, such as those in internet cafes, because of security issues. There are many questions about access to computers and IT.

Does the hon. Lady share my concern about the difficulties that people in extremely rural areas might experience, because their rural deprivation will be compounded by the introduction of the IT system?

Perhaps the Minister would like to answer on that point. The Government said in their response to the Committee’s report that there will be a telephony system, which is good to know, although I understand that there will be no paper application form, so no one can phone up to request one. They expect about 45% of initial claimants to use that system to complete their claim. However, the person at the other end of the line will be using the same interface that online claimants see, so it will have to be designed in a way that works and is easy to understand. Access to a computer is one thing, but the customer-facing interface must also be easy to understand.

Does my hon. Friend agree that there is a particular concern for those in rural communities who might not have the necessary access to broadband and therefore do not have internet access, which will place them at an extreme disadvantage?

That is a problem in rural areas, but some urban areas, such as Glasgow, do not have superfast broadband either. Around 50% of claimants will be claiming at home on the internet, so that is really important.

The Committee, of which I am a member, identified those real concerns, but does the hon. Lady not agree that there are also opportunities? In my constituency, where English is a second language for many, digital by default offers the opportunity for translation and other services that will in many ways make a digital interface easier to use than a paper form.

The Government’s whole point in doing this is to make the system easier, so hopefully it will be. If it is not easier at the end of the process, we really will have got everything wrong. In the process of introducing this fully, the Government will obviously have to address some of the concerns that hon. Members have raised.

The Government’s response indicates that they expect only 50% to claim online and about 5% to get face-to-face interviews, which means 45% will claim through the telephony system. Perhaps the Minister can explain the wording in the Government’s response. It states:

“Our target is that 50% of claims which can be made online will be made online in October 2013 when Universal Credit is launched nationally.”

I am not sure that I understand that sentence. Does it mean 50% of the total number of people who will make a claim, or 50% of those who can make it online, which will not be everybody. I am not exactly sure what proportion the Government are talking about.

The Government’s response mentions face-to-face interviews, which is good, but they are still for only 5% of cases, and they give not a hint about where the interviews might take place and what proportion of them are likely to be home visits. After all, a large number of people in the universal credit cohort will have severe disabilities. They might receive other benefits that they have claimed previously, but they will also be in the universal credit cohort.

I am also glad to see that jobcentres are to have IADs—internet access devices—which sounds great. The Government response trumpets the fact that there will be computers in Jobcentre Plus offices. However, if we divide the number of computers by the number of Jobcentre Plus offices, we find that it works out at about three terminals per office, and I am not sure whether that will answer some of the questions about access to computers. Also, it appears that wi-fi is not yet available in Jobcentre Plus offices, although that is planned, as it should be available. Many people do not have a computer at home and will need to access their claim form through a public-access computer, whether in Jobcentre Plus or not. They will need help, and the Government’s response is not very clear about that. It does say that staff will be available, but it is very vague: it does not say how many or how much time they will have. Jobcentre Plus staff are already overworked. Will they have the time to sit down alongside someone until they have filled in their whole claim, or will they just get the screen up and leave them to it? For many people, that would not be enough help.

The Government say in their response that they are liaising with local authorities to supply help. However, we all know that local authority budgets are already being squeezed year on year, and that a lot of welfare rights officers, where councils have them, are disappearing, if they have not already done so. There is also a squeeze on organisations such as Citizens Advice. This is such a big undertaking that it is incumbent on the Government to make sure that this help, of the necessary quantity and quality, is there and that people know how to access it. It has occurred to me that as some local authority staff will no longer be employed in administering housing benefit, they might be an experienced resource that the Government could call on to act as advisers in providing the help that many people will need to make an online claim.

Another big area of concern about UC is that it will be paid once a month into a single bank account for each household. The Government’s response says that the Secretary of State has powers to vary the frequency of payments, but this would be time limited. It also says that the Department for Work and Pensions will try to identify claimants with, for instance, mental health or addiction problems who might not manage monthly payments, but suggests that help will be provided for only a limited period. The Government seem to think that a drug addict will somehow be able to learn how to budget properly after a couple of months. The essential problem is that getting a whole month’s money in their hand at once might be too tempting. I do not think that what the Government describe as “transition to monthly payments” after

“getting help with monthly budgeting”

is going to work in practice. Will the Minister clarify that?

As the Chair of the Select Committee, my hon. Friend knows, but I suspect that other people do not, that we have been hearing evidence about the apparent lack of information held by Jobcentre Plus about people’s circumstances in relation to being placed in the Work programme. Jobcentre Plus may therefore be unaware that people are homeless or have other difficult circumstances. What confidence does she have that it will be any better for the purpose of working out which people need this additional help?

I am worried that the Government say bluntly in their response to our report that they are not going to provide a definition of a vulnerable claimant. Without that, it will be difficult for Jobcentre Plus to identify the individuals who need help. This is our biggest area of concern. We do not know whether someone will need to get into trouble before they can get help rather than already having been identified as needing it.

I do not know about my hon. Friend or other right hon. and hon. Members, but I get paid monthly and my main outgoing, my mortgage, is taken on the day that my salary goes into my bank account. I think that I have had that arrangement ever since I first had a mortgage. Most banks and mortgage companies tend to arrange things with their customers in that way. They ask on what day people are paid and then arrange that that is the day on which they take the mortgage payment. Has the Select Committee considered whether there is anything the Government could do to help landlords, particularly social landlords, to collect rent in that way on the day that universal credit is paid?

We did not specifically consider that, but my hon. Friend has placed it on the record as something that the Government need to address. We do not know, either, to what extent they will allow direct payments into landlords’ hands. I hope that they are still considering that.

Is it not the case that many of the people we discussed when we exercised our inquiries in the Select Committee have no access whatever to bank accounts, so that issue does not arise? Is it not also the case that social landlords are already extremely reluctant to accept housing benefit claimants, and that the idea that they will not be paid directly will reduce even further the already lamentable stock of affordable housing?

I thank my hon. Friend. I was about to come to some of those issues.

In our report we drew attention to the lack of suitable bank accounts. Again, there is not much detail in the Government’s response as to what progress has been made in persuading banks that they need to cater for this part of the market. Perhaps they need to be able to have some kind of direct debit facility. That would deal with the point made by my hon. Friend the Member for Stretford and Urmston (Kate Green) about people being able to manage payments, particularly the bulk of money that needs to come out of their account every month. Also, the payment must come out on the day after the money goes in, not the day before; that is another potential problem. Banks will need to be sensitive to this market. So far they have been very reluctant to provide products that will cater for these people, simply because there is not a lot of money in it for them. I hope that they do have a social conscience and will realise the importance of this, but the Government will need to do a bit of prodding.

The monthly payment regime involving almost the whole of a household’s income makes it imperative that the Government get the delivery right. If something goes wrong with a claim or there is a delay, that could lead to real hardship for anything up to a month, or perhaps even longer. For some families, only child benefit and council tax benefit will sit outside universal credit, and all other payments will depend on the right amount of UC being paid at the right time into the single bank account.

The move away from paying housing benefit directly to landlords and to the claimant instead is causing a great deal of alarm among social housing providers, and it may be acting as a barrier to the social rented sector renting to people who are on UC. This, alongside the introduction of what has become known as the bedroom tax, could mean that many housing providers will have a large shortfall in their rental income.

In its response, the DWP says that it does not intend to define “vulnerability” in case someone with complex needs falls outside the prescribed definitions and so does not get the help they genuinely need. Instead, full guidance will include

“financial vulnerability factors that would trigger a conversation with a claimant about their budgeting needs”.

I do not know how that is going to work in practice. We fear that the person who is struggling will be picked up after they have begun to struggle and are already in debt rather than at the early stages of their claim—or, rather, before the claim is made. There is a good chance that the people who struggle with their monthly payments will be the same people who find it difficult to pay their rent in full and on time, who do not have access to a computer, who are not computer literate, and who need face-to-face help in making a benefit claim because they do not have basic literacy. The DWP is unwilling to provide a definition of who is a vulnerable claimant, yet there is a whole list of things that would act as a pointer to the fact that someone may be vulnerable. I am really concerned about the danger that claimants will get into financial difficulties before any help is provided.

It seems from the Government’s response that the first solution will be budgeting support, rather than an alternative payment method. Perhaps the Minister could clarify that. How long will somebody have to wait before their rent is paid directly to the landlord or their benefit is paid more frequently? For how long will those solutions last? I understand that the DWP is running six direct payment demonstration projects that are due to run until June 2013. How are those demonstration projects going and how will their findings be incorporated into the roll-out of universal credit?

Our report points out that there is a need to decide how passported benefits will be dealt with under UC. I do not think that things have moved on much. Apart from the temporary solution for free school meals, the Government do not seem to have any ideas about how they will deal with that matter. Again, the Minister might be able to shed some light on that today. It is important that passported benefits operate effectively because for many people, they make the difference between a bare income and one on which their family can live.

One of the problems with passported benefits is that the Government have not managed to iron out the cliff edge that might be involved. The whole point of universal credit was to smooth away all the cliff edges. However, once passported benefits are put into the equation, a lot of the cliff edges come back.

It is important for other Departments to know how passported benefits will operate. They have always used the payment of social security benefits as proxies for certain qualifications, which has made it much easier and cheaper for them to administer their benefits. If there is nothing in universal credit that signposts a claimant as someone who should receive other things, such as free prescriptions, it could land the Department of Health, the Department for Education, other Departments and local authorities with a large administrative burden in order to work out who qualifies for other benefits.

Free school meals are linked directly to the pupil premium. If there is a reduction in free school meals, it is entirely possible that there will also be a reduction in funding for schools. The implications of universal credit are infinitely greater than just the effects on the actual claimant.

That is why it is important that the Government get it right. I appreciate that it has been very difficult, but before the first claimants go on to UC, which is in just over a month, they need to start answering these questions. They certainly have to have an answer before it is rolled out to other claimant groups in October. They do not have very long.

This morning, when the Select Committee was taking evidence on the Work programme, we heard that universal credit has implications for the Work programme. There are questions about how people will be labelled when they go into the Work programme because the predecessor benefits, such as jobseeker’s allowance and employment and support allowance, will disappear under universal credit as people move on to the single benefit.

There is one benefit change that flies in the face of all of this and undermines what UC was intended to do. The localisation of council tax support will add complexity back into the system and introduce local variations, which could undermine the withdrawal rates that should make work pay. I have already talked about computer programmes. I have said that the customer-facing screens must be right and that, behind that, the programmes must calculate what a claimant should get and pay it into the bank. Those computers will have to speak to the HMRC computers so that the real-time information can be fed in. However, because of the proposals on council tax support, they must also interface with the local government computer system, which apparently is called ATLAS. I do not know whether that just applies to England and Wales. That is another potential IT difficulty that could cause problems for people. On top of that, it will be more difficult for claimants to work out whether they will be better off in work than it would have been if council tax support had been included in universal credit. That will rely on working out the tapers and the disregards.

To come back full circle, the delivery of universal credit will depend on the smooth delivery of the IT—not only the IT controlled by the Department for Work and Pensions, but that controlled by HMRC and local authorities. That is a big ask. My final question to the Minister is: how is that going?

It is a pleasure to follow the Chair of the Work and Pensions Committee and to speak about the report. This is the first report that I had the pleasure of working on when I joined the Committee. I feel slightly guilty in that I missed all the evidence sessions because I did not join the Committee until it started to write the report. I therefore missed the hard work and did the fun bit at the end.

I should probably start where the Chair of the Select Committee finished—the complex IT system. Those of us who have followed the news of new, large IT systems from the outside over many years would be brave or foolish to be entirely optimistic that a new, super IT system will work flawlessly from day one. Perhaps the Minister will assure us that that will be the case, that the IT has worked in the various tests and trials, and that it will work when we switch over to having live feeds of millions of entries from HMRC.

I, too, am concerned about putting all our eggs in one IT basket. Would it not be sensible to retain the staff in local authorities—in my constituency, they are about to be laid off—so that there is a back-up, at least until it is proved that the system works?

I see the sense in that, but it would involve a large cost.

Speaking as someone who still does the weekly payroll for a small charity with six employees, I am looking forward to the time when I have to input the data into the HMRC system weekly or monthly, rather than making the PAYE payment that is due once a quarter. I think that the system will work quite successfully for large employers that are used to operating PAYE systems, where they can hit a “submit” button every month and the data transfers over on the right date. However, for a lot of small employers, this will be a big change in their procedures from having to give the payroll data to the Revenue once a year. That will be a test.

Perhaps the Minister will update us on how confident he is that the systems will be able to interact and that the millions of entries will make their way to the right place at the right time, so that all the people who will be relying on it for their universal credit payments will receive the right amount on the right day, especially as the system rolls out and more people keep being added.

It is worth saying, as the Committee noted in its report, that there is broad agreement with the principle of a single payment that makes it easy for people to move in and out of work, with their income going up or down so that they get the right benefit at the right time. We all want that to work. Clearly, if it does not work, it will leave people in a whole new mess.

That is not to say that people are not in a mess now. We all have constituents who have struggled with the existing system of multiple claims. There are people whose tax credits have gone wrong, perhaps because their income has changed during the year and they have forgotten to notify HMRC or HMRC has lost the notification, who have ended up with a large bill at the end of the year that they were not expecting and did not have the money left for. We are not trying to reform an ideal system or even a good or acceptable system; we are trying to move from the existing pretty poor and complex system to a system that is easier to understand and easier to deal with. However, there are clearly issues with any new IT system.

The report was right to recognise that the new system, which we all broadly welcome, will work for the majority of claimants who are IT literate, understand the system and can update their circumstances and check what is going on. It also considered those for whom that is not the case and who will struggle with the new system—perhaps because they are not IT literate or, for whatever reason, have not got a bank account—and struggle to manage their own affairs. However, such people will probably already be struggling with the existing system in which they have to make multiple claims and try to manage the situation. We are not talking about people who are fine with the existing system but will suddenly have problems with the new one; they will already be experiencing some of those problems.

I will not do a wide sweep of all the issues mentioned by the Chair of the Work and Pensions Committee because that would be pointless repetition, but I will pick up some of the main themes. I support a system that, by default, is accessed electronically rather than on paper—that has to be the right way forward. At some point, the system must be accessed via IT by default and not choice, and now is probably the right time for such a transition. Statistics state that 78% of working-age people who claim benefits already use the internet, and about half of those use it every day. There is not a huge number of people with no IT access at all, although the 22% who are not regular users of the internet will need some support.

I am also a Member of the Work and Pensions Committee. As my hon. Friend will recall, we discussed the development of specific apps that will make it even easier for those who are IT literate and can deal with a claim on their phone.

Yes, that is recommended in the report and I think the Government promised that by 2014 there will be a separate app for universal credit. Currently, 92% of jobs advertised require some level of IT skills, so encouraging people to become more confident and use computers to claim their benefits is a move in the right direction. I agree that we must give the right support to those who cannot do that or have not done it previously, and I hope the Minister will explain to the House how that will be done.

The Government’s response to the report mentions computer terminals in jobcentres. I am not sure whether I have yet seen that on the ground and how we will get enough computers in jobcentres for people who need to claim, or how people will deal with the regular monitoring of their benefits. Universal credit is not a once-only application in which a person can sit with someone who does the form for them and that is it. The entire system relies on updating that will require regular IT access, not just a one-off.

The hon. Gentleman may not know the answer, but does he have any idea how long it will take to make a claim on average, particularly with regard to the point made by the hon. Member for Newton Abbot (Anne Marie Morris) about filling in the form on the phone? If it will take more than half a minute or so, it is unlikely that people will be able to cope with that on the phone, and they may struggle to do it online at all.

It would be very optimistic to assume that the application form will take half a minute. I have not seen the form, but I have not seen any Government form that takes half a minute for a long time—[Interruption.] Does the Minister wish to answer the question?

I think we must be careful and not underestimate where people are at the moment. The vast majority of claims for jobseeker’s allowance are made over the telephone and an increasing proportion are made online. We are not entering uncharted territory and I am surprised that Opposition Members seem keen to keep us in a luddite past. We need to tackle the digital divide, and this is a very good way of doing it.

I am grateful to the Minister although I am not sure we got an idea of how long the application form will take to fill in. Perhaps we will get that later.

Speaking as a non-luddite, I want everyone to be able to partake of the system. I am not a member of the Work and Pensions Committee but perhaps I can ask the hon. Gentleman—or even tempt the Minister—to say whether any attention was given to applications in Welsh in Wales, where Welsh is to be treated on the basis of equality with English? Perhaps the Minister will leap to his feet and reassure me on that.

Despite what some people think, Amber Valley is not in Wales so I am afraid that the use of the Welsh language is not an issue I have to worry myself or my constituents with. I will leave that point for the Minister.

The next area of concern is the single monthly payment per household, and making that replicate what most people in work receive as a salary is a sensible step. We are not talking about people who only receive benefits; people in work will receive universal credit on top of that, and we are trying to encourage them to work more hours and get more money, at which point their benefit will drop. In an ideal world, a single monthly payment that matches timing with salary must be a step forward. We are trying to help people get back into work and not face extra barriers created by the benefit system. Clearly there are issues, however, and some people will not be able to cope with one single monthly payment. We must consider how we will help them through that, deal with the exemption system, and find out that they are not coping before they get into so much debt that they cannot get out of it. It will be interesting to see the progress on new bank accounts, especially the jam jar system, although we have not yet heard how many providers are willing to offer such a system.

I am glad that my hon. Friend mentioned jam jar accounts because they are important. We have spoken previously about this issue, but it is one on which we are all urging the Minister to give the banks a really good kick. As I said in a previous speech, such accounts are one demonstrable way that the banks could make amends for what the public perceive to be a pretty poor show over the past few years.

I am grateful to my hon. Friend. We need to know soon how many providers are interested in that system and what the Government’s proposals are. People will be rolling into universal credit soon, and we must understand what their bank accounts will look like to ensure the system works. I have heard lobbying groups present interesting ideas about the real advantages of the jam jar system. People can choose to have their rent payment moved into a separate account so that it goes out on the right day and they cannot accidentally spend it on something else. Applications that use payment cards or jam jar bank accounts can produce useful solutions. Perhaps we can introduce a system under which people have the chance to choose their preferences. People must choose to set money aside for certain bills, rather than be forced in some draconian state-controlled manner and told how to spend their money, but an update on the issue would be useful.

I also want to consider the impact of this system on people who are self-employed. It is clearly right that they state each month what profit they have made so that any benefit they are due can be worked out. It is equally right that we encourage them to work hard and make a minimum level of profit and not somehow get round the system that applies to people looking for paid employment. I am a little concerned that we will end up with two different reporting and accounting systems. For universal credit people will have to report their monthly profit or income based on some kind of calculation, yet for tax purposes they will have to use a completely different calculation. That could leave them with two different sets of books and calculations which could be hugely complicated and they may end up with some true-up at the end. Hopefully, people can get some assurance that what is expected for universal credit is the same as HMRC expects at the end of the year. It could be nice and simple—people could hit a “total” button on the universal credit system and it will say what their annual profits have been.

Despite that complexity, presumably my hon. Friend would welcome the change to allow businesses that have become insolvent not to be written off, so that effectively over a five-year period they can come back without all the penalties that exist in the current system.

Yes, we want to encourage people to have another go if they wish—that makes perfect sense.

In conclusion, this system has been generally welcomed and we hope it is a real step forward. We are concerned, however, that for some more vulnerable people in society some of the changes will prove too much. We must ensure that we do not leave a whole load of people behind in a difficult situation, and that when the system goes live, the Government have plans in place to ensure that a worse situation does not develop.

The hon. Member for Amber Valley (Nigel Mills) said that 92% of jobs advertised require some computer literacy. I do not know what the requirements are on that side of the House, but on this side computer literacy is not a requirement to be an MP, for which I am extremely grateful because I frankly admit to being an IT illiterate.

Before I continue, I wish to apologise to you, Mr Deputy Speaker, and to both Front Benchers, because I have a previous engagement and will not be here for the wind-up speeches.

I do not wish to re-rehearse what my hon. Friend the Chair of the Select so succinctly detailed as the bedrock of the Committee’s examination of these issues. With all due respect to the Minister, he—like every Minister from the Department who has appeared before the Committee to answer questions on these issues—has been overwhelmingly over-sanguine about how easy this process will be for some of the most vulnerable people in our society. That is the central issue for me.

The Department has failed to come anywhere near defining what will be meant by “vulnerability”. We have had representations, for example, from the organisations that campaign for and on behalf of specific groups of vulnerable people, not least the Royal National Institute of Blind People and the British Deaf Association. Many of the mental health organisations have also campaigned with us, because it may be possible for a person suffering from a mental illness to be capable of doing everything on one day—probably even running the country—but the day after they can be incapable of getting out of bed, and they certainly would not be able to access a claim. We all have cases—even before this system is introduced—of people failing to meet the requirements of the recent changes made by the Department, such as the need to attend an Atos examination.

My overriding concern is that some people—for a variety of reasons, most of which they do not have any control over—will be allowed to drop through the net. They could end up with no support and, even more frighteningly, no one would know that. I have had occasion to raise individual constituency cases with the Minister. I also remember raising with the Secretary of State the case of an individual who is agoraphobic. He has not been outside his house for 35 years. His elderly mother is responsible for maintaining and caring for him, but she is not going to live for ever. The Secretary of State said—I paraphrase—“Oh well, we’ll have house visits, we’ll ensure that someone can treat with that individual.” That is all very fine and good, but it does not happen.

As my hon. Friend the Member for Aberdeen South (Dame Anne Begg) said in her opening remarks, 8.5 million people will be affected by this change, and many of them will never have had any contact with a piece of IT equipment. That is my first concern.

My second concern is the security of the individual’s claim. They will be expected to access terminals in internet cafes and public libraries or use their phone. We are all warned to hide our phones because they could be stolen, and heaven only knows how long it would take to fill in the form over the phone. I am especially concerned that it would be more than possible for someone to steal an individual’s details to defraud the benefits system. I have asked whether someone could be validated to make a claim on behalf of an individual, and I have to say that I did not get a categorical answer that calmed my concerns. I know of cases under the existing system in which someone who regularly claims benefit has a lot of friends on the day the money is paid, but they disappear with the money about half an hour later. This is already happening to some of the most vulnerable people in our society, and this obsession with all claims being made online will only increase the possibility of people being cheated in that way.

All hon. Members broadly welcome the idea of universal credit, but the details of its delivery to the most vulnerable in our society are a long way from being defined by the Department. Those who have spoken in the debate so far have mentioned the need for additional resources. We all know about the work force in our local jobcentres being reduced, and that the voluntary organisations that have been of such wonderful assistance to our constituents—such as citizens advice bureaux, voluntary organisations and local authorities—are seeing a big diminution in staff numbers, so even fewer people will be able to afford advice to someone who simply cannot handle what happens when they look at a monitor. Added to that is the possibility that the Department’s budget will be drastically slashed. If the Ministry of Defence makes its case for money to come out of the DWP, the resources to assist claimants could be greatly diminished.

Does the hon. Lady agree that if the new scheme makes claiming easier and simpler for the majority—say, 75% or 80%--it should mean that the resources that exist, albeit potentially diminished, will be more than adequate for the individuals who are vulnerable and need the help?

I would like to be able to say yes, but I am old enough and cynical enough to be able to say categorically, “No, it never, ever works like that.” If 75% are sailing along on the crest of a wave, the 25% are always, in my experience, left paddling in the shadows, and nobody notices when they are waving. I am very concerned about this for the reasons that I have already elucidated.

I am also concerned about the possibility of the Department having to slash its budget even further—I have already mentioned the MOD rolling its tanks on to the Department’s lawn. The Secretary of State is already saying that because of the supposed invasion of these shores by new citizens of the European Union he will have to address the whole issue of welfare benefits all over again. I suspect that has a political basis and has nothing to do with the delivery of benefits, but if there are to be reductions—no one has argued that the Government have managed to tackle the issue of our as yet far from booming economy—these issues will come into play further down the line. There will be more and more complexities for many people who already find every single day of their lives a struggle, from the minute they open their eyes in the morning until they go to bed at night. Those are the people on whom we need to concentrate and I hope that the Department will do just that.

It is to the credit of the Secretary of State and the Government that, as we have seen so far today, the issue being debated is not whether we should try to introduce universal credit into the welfare equation. The level of the debate has been fascinating, and I commend the Chair of the Select Committee on her contribution. I was particularly taken by her succinct and well made observation that whichever political party brings in the change, there will be unforeseen consequences, and the issue is the Department’s ability to deal with those consequences. We cannot do much more about them—by their very nature they are unforeseen—but the House will rightly look to the Department to work as assiduously and quickly as possible, because they will affect people’s real lives.

It is a pleasure to follow the hon. Member for Hampstead and Kilburn (Glenda Jackson). I have yet to agree with her on anything, but she touched on the subject of individual fraud. I do not wish to alarm her, but I calculate that the bank account running the universal credit system will be one of the largest in the world. I hope our security systems and advice are up to scratch, because that would be an expensive fraud for all of us. I am not making light of it, but individual applications may be a smaller part of the problem if our security advisers have taken care of that one. I am sure that they have and that there is nothing the Minister needs to lose sleep over.

It is to the credit of the House that, in discussing whether universal credit is a good idea, we have not entered into yah-boo politics. However, while the House rightly focuses on vulnerable citizens who may be caught up in the changes, it is important that we do not reduce the issue to a denominator that means we should not press ahead with them. We should all aspire to change, and not hold back because of a fear that smaller groups have the potential to lose out. Of course, they must not lose out as a result of some of the issues I will come on to talk about.

It is important that we distinguish between vulnerable people and those who presently do not have skills. I am not sure that someone who cannot complete an online form is vulnerable, but I argue that they are unskilled. Our goal surely must be for 100% of benefit claimants to be able to claim online, notwithstanding the hon. Lady’s self-declared inability to do so, something I understand perfectly and empathise with. It must be our goal. It would be more economical and user-friendly once people are conversant with it.

In my constituency, if I accept the statistics suggested for those unable to complete a claim online, 600 out of 3,500 claimants may not be able to do so. However, I would rather find a system that suits the vast majority of people, and then work hard to bring others up to scratch. It is good to see the use of computers and advice being available in jobcentres. Three computers in each jobcentre may not be enough—although I suspect we will probably have more in areas of greater need, and fewer in areas with less need—and it is right that the telephone service will be in place for a considerable time. However, I want us to aspire to better systems and not be held back. It is crucial to seek to get everyone online not just to meet the needs of universal credit, but for the development of personal skills. We cannot run from the digital age. It is here and we will all have to use it whether we like it or not. Whether we are luddites or reformers, it is here and that development must be one of the fringe benefits of what we are trying to do.

On direct payments to landlords, my understanding—I am very happy to be corrected if I am wrong—is that under the Government’s pilots the majority of people are meeting their rent payments in full and on time. My understanding is that in the first four months, from more than 6,000 social tenants who were paid their housing benefit directly, rent collection rates stood at 92%. If that is accurate, it indicates that the pilots are travelling in the right direction. Of course, that means 8% are not doing well. However, I support the view taken by my hon. Friend the Member for Battersea (Jane Ellison), who argued that we will be able to invest more time to bring that 8%—if that is what the figure turns out to be—the care and attention they need. I recognise the cynicism mentioned by the hon. Member for Hampstead and Kilburn, but that is what we are here to deal with. We should not allow ourselves to repeat the mistakes of the past. We should learn from the past and be able to put extra time and resource into looking after those people so that they become more self-reliant.

On self-reliance, in the past decade or 12 years or so, approximately 2 million children were brought up in households where no one was working. No Government ever set out to achieve such a thing; it has happened for a number of reasons. However, it has contributed enormously to creating a state of mind whereby so many people look at what they cannot do, as opposed to what they might aspire to do. From a life of dependency, I am sure that they would prefer to move to a life of independence. I welcome the inherent measures in universal credit and the wider welfare reforms, because they enable people to move towards taking responsibility for improving their own lives, finances and skill sets. The state will never be able to do everything for everyone—that philosophy is wrong. We have almost empowered a generation to believe that the state will provide them with an answer to their problems. That is not the case in the real world—we know that. I therefore welcome the measures warmly, as they will provide a step-change for people towards independence and taking more control over their lives.

I listen carefully to the members of the Select Committee, who have been extremely thoughtful in discussing potential areas of weakness. As a constituency MP, like all of us in this House, I inevitably attract people who are caught up in grey areas. We have a duty—indeed, a passion—to help advise Government where those grey areas are and to make recommendations for changes. Sometimes we fight the bureaucracy that can so often stifle individuals, many of them vulnerable, into almost giving up hope of receiving the help that we have decided they deserve. I fully anticipate that there will still be work to do, but I engage constructively in that process, because I recognise that any system that is introduced is bound to create a grey area in which some people will be trapped. However, that is not a reason not to proceed; it is simply a reason to be flexible and to move forward, advise and gain consent to deal with those issues.

I conclude by saying that the House is at its best when it is arguing about detail and trying to highlight potential flaws. I welcome the cross-Chamber support for the big idea of this reform. The shadow Secretary of State has been characteristically robust on many occasions, and I am sure he is being so on Twitter right now. Some of his public remarks predicting complete doom and gloom for the system are perhaps uncharacteristic, because the mood of the House seems to be, quite sensibly, “We are behind this. The Government may not have got everything right and we will watch them on that score.” That is probably the right way to go and I hope that he genuinely believes that this is the right thing to do.

The hon. Gentleman is right that we support this idea in principle, but we have grave and growing concerns about implementation. He will have seen reports in The Guardian that prompt questions about whether there are IT personnel or contractors at Accenture, Atos Origin, Oracle, Red Hat, CACI or IBM UK who have been stepped down, or in any way notified by the Department, that they are to “suspend work”. We hope the Minister will be able to return that in his remarks.

I will give way to the Minister, who no doubt will want to answer the right hon. Gentleman’s point, in a moment. I do not want us to set a tone that will undermine our overall goal, but of course if the shadow Secretary of State has concerns, he should raise them. I am sure the Minister is keen to answer them.

The shadow Secretary of State has been touting this story for months. [Interruption.] No, it has been longer than that. The last outing was in today’s Guardian. I want to make it clear that nobody has walked off the project; all the contractors are in place and the project is on schedule to be delivered at the end of April. Now, if he thinks the idea is good in theory, it is about time he supported it. It is working and the contractors are in place, doing the job and ensuring that the pilots will be up and running at the end of April.

My hon. Friend is right that we must be conscious that these are vulnerable people, which is what the Committee report was about. Exaggerating for political purposes the possible problems, which we have all acknowledged, runs the danger of most alarming and leading astray the people we most want to help.

My hon. Friend makes extremely well the point I made so badly.

The shadow Secretary of State knows the history of Government IT systems. Given that history, it is inevitable that there will be some genuine concerns. When I was rolling out IT systems in my company, it filled me with horror; I knew we would end up exceeding the budget and that the timetable would come under threat. In those days, we dealt with it by shadowing the new system with the old system. I give credit to the Government for not having gone for the big bang effect and for seeking to roll out the system gradually. Had I been in their position, I would probably have made the same decision, but the proof will be in the pudding. Nevertheless, they have learned from previous mistakes. I was delighted to hear the Minister’s confident assessment, which I have no reason to doubt, and I think they have taken every reasonable step. Will there be problems? I am certain of it, but I do not think that they will be insurmountable.

I acknowledge the good work that my hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, has done on benefits and the implementation of universal credit, particularly the impact on vulnerable people. The Committee highlighted the fact that vulnerable people are usually benefit claimants and so will be subject to the overhaul of the benefits system, and that many communities, and particularly those who will need it the most, will be deeply impacted by the online universal credit—admittedly, a telephony service will be available—because they will have great difficult accessing it.

It is important that the DWP can implement the IT system. Back in 2008, in my former life as Minister for Social Development in Northern Ireland, I introduced a parallel system for household fuel payments. It was outside the benefits system, but it required the help of the DWP and was an extremely difficult job. There were people who fell outside it who should have been eligible, but because of the nature of the IT system things proved difficult. I say that by way of warning. Also, owing to topographical difficulties, some claimants might not have broadband access, which raises issues about payment methods, and then there is the question of passported benefits.

My party has been against the introduction of universal credit from the outset. It is a misguided and draconian change to the benefits system that will neither save money nor encourage people into employment nor protect the most vulnerable. We are for welfare reform, but not for unfair reform. We recognise the need for a simpler, more accessible benefits system, but these reforms are an attack on the most vulnerable and will actually end up costing the taxpayer more through transition and administration costs.

I am extremely concerned about the long-term impact of the tone that the Government have taken throughout this and previous debates on welfare reform. The persecution of those on welfare—labelled “skivers”—is socially divisive and acts to marginalise and ostracise many people suffering disability, illness and impairment. It is casting down the very people whom the Government claim to be encouraging into work.

As the Minister will be aware, social security provision is devolved to Northern Ireland and implemented under a separate system known as parity legislation. In a previous life, I had to implement some of it. Under that system, we normally have little scope for variation, which means that we will be subject to the worst elements of these measures. I welcome the flexibility arrangements the Government introduced in Northern Ireland enabling split payments—two payments a month, rather than one—and payments to be made directly to landlords, rather than to the claimant, but the core of the changes remains and will be extremely damaging for our people and economy.

We need additional flexibility, owing to our high level of disability—a throwback to the troubles, which left people scarred by violence and terrorism—and higher percentage of people dependent on benefits. I ask the Minister and his colleagues to work with the Minister for Social Development in Northern Ireland to introduce that flexibility. Earlier today, I asked the Minister of State in the Northern Ireland Office about this subject in Northern Ireland questions, but his reply left me aghast: he said we should be getting more people into work. That is fine and laudable, if the work opportunities are there, but they are not, so let’s get real. We need to support these people, not marginalise and persecute them. These measures are likely to push more people into poverty and, in doing so, increase the welfare budget.

I am clearly not as familiar with the situation in Northern Ireland as the hon. Lady, but I do not recognise her description of persecution, marginalisation and ostracism. The Committee accepted that there were definitely some people about whom we were far more worried than others, but we took the general view that the system had a reasonable chance of working for the majority of people, even allowing for implementation issues. I just do not recognise her description of the system.

I was saying that there were particular circumstances prevalent in Northern Ireland that perhaps did not exist in other parts of the UK because of the higher number of people who were more vulnerable and dependent on benefits. We are coming out of a conflict situation and, as a result of that legacy of conflict, more people rely on benefits and are, through no fault of their own, unable to access or find work. Those job opportunities, which might exist here in Britain, are not there.

I would like to finish this point and move on. The third report by the Work and Pensions Committee states:

“We consider that the implementation timetable is ambitious and that there is significant further work to be carried out to ensure that the needs of the most vulnerable claimants can be met.”

Let me turn to the cost of universal credit. The rationale given by the Government is that the legislation is about making work pay and helping people into work. However, the driving motivation appears to be cutting costs, with those on welfare easier to scapegoat than the tax avoiders in society. Moreover, the figures suggest that, rather than saving money, the changes will increase the welfare budget. The Government’s own impact assessment suggested that £2 billion was set aside to fund the transition to universal credit in the 2010 spending review period and that net transfer payments from the Government to households would be around £0.3 billion higher once universal credit was fully implemented and transitional protection exhausted, while the Institute for Fiscal Studies has valued the long-run cost of universal credit at around £1.7 billion in 2014-15 prices. Furthermore, it has been stated that £18 million—£13 million in resource and £5 million in capital—will be delivered to Her Majesty’s Revenue and Customs to cover the costs associated with implementing universal credit

That suggests that the new system will be not just ineffective, but expensive. Experience suggests to me that the costs of such a project are likely to go up rather than down, once the projections meet the reality, as was the case with the change from incapacity benefit to workplace capability assessments. That has been a difficult issue in Northern Ireland and a traumatic experience for those who have been put through it. The resulting volume of appeals—a high proportion of which were successful—illustrates just how ineffective the changes were. I feel—I suppose I say this with a certain level of temerity—that the Government do not seem to be heeding that lesson. I fear that there will be an even more catastrophic impact when universal credit is fully introduced.

I have made it clear that I am against the substance of this welfare reform and its introduction, and I am dubious that it will actually save any money, but I also feel that there are likely to be a number of technical and administrative issues that could be extremely problematic and that we could run into financial problems as the system is rolled out in Northern Ireland in April 2014. I ask the Minister to look at those. I would also ask the Chair of the Committee to look into this and perhaps work with the Social Development Committee in the Northern Ireland Assembly to see whether these issues can be worked through. The project has already been delayed because of IT problems, and I have had very little reassurance that that will not happen again.

Just to be clear, the project has not been delayed because of IT problems. That is a complete red herring. The hon. Lady should not read the stories that the shadow Secretary of State puts in The Guardian.

The hon. Lady is absolutely right: the project has been delayed. Ministers told us for a long time after the announcement of universal credit that all new applications for out-of-work benefits would be treated as universal credit applications from October this year. It is now absolutely clear that that date will not be achieved. It might be a year later, or even some time after that, but the project has certainly been delayed.

I thank the shadow Minister for his intervention; I absolutely agree with him. The Minister will not be surprised to hear that I disagreed with him, because experience has taught us these things.

I seek clarification and an update from the Minister on the implementation of a computer system for the social security system in Northern Ireland to administer universal credit in line with the flexibilities that will be implemented there, notwithstanding—because of our special circumstances—the other flexibilities that I hope will be introduced. I understand that these are currently subject to negotiation and discussion between the Minister for Social Development and the appropriate DWP Ministers. What feedback will there be and what facility will be employed to use the lessons from the initial pathfinder areas in England to inform subsequent roll-out in Northern Ireland?

Governments do not have a great track record on implementing new IT systems, as seen with the Child Support Agency, the e-Border programme and the health service. The new universal credit system will likely require an even more complex system, incorporating real-time processing from pay-as-you-earn records. The Committee’s report makes it clear that there are significant concerns about the system’s capacity to operate between local and central Government. I fear that this will be even more challenging in the devolved Administrations. How satisfied is the Minister that there will be no more significant delays or cost overruns for the new universal credit payment system? Can he say with certainty that he will not be back before the House a year from now, explaining away delays and expensive setbacks?

Added to that, universal credit is to use digital self-service by default. That might sound good, but I have had little reassurance about the fact that the most vulnerable in society—particularly the elderly—are less likely to have access to computers or to be as proficient with newer technology. Reference has already been made to that issue in this debate, as well as to access to the internet and broadband, so I will not dwell on it further. However, notwithstanding our position on welfare reform and universal credit, I say to the Minister that it is important that the delivery of this benefit does not impact further on the vulnerable and disadvantaged in our community. It is important that the right systems are in place to ensure delivery is enabled, so that the most vulnerable can live a good life with some degree of benefit.

I am delighted to take part in this debate, although I feel like something of an interloper. As a member of the Select Committee on Work and Pensions in the previous Parliament, I hope that the Chair, the hon. Member for Aberdeen South (Dame Anne Begg), and her colleagues will be happy that I am contributing.

Let me start by paying tribute to the Committee and the Chair for the hugely important work they continue to do. It is quite right, because of the hugely significant nature of these reforms—we can all absolutely agree on that—that they should have the full and continual expert scrutiny of the Work and Pensions Committee, involving both the MPs and the staff. I am sure that that will continue to be the case, and that is quite right.

One of the big, thorny issues that we discussed on a number of occasions in the Committee in the previous Parliament was the over-complexity of the benefits system, which we said needed to be addressed. The report that we published in July 2007 said that

“our current benefits system is stunningly complicated…simplification should be a key priority for the DWP…We believe there are opportunities for merging some benefits, aligning the rules of eligibility and, where means-tests are necessary, the information required from claimants.”

Therefore, while praising the Committee for its scrutiny, the issues it has rightly raised and the points on which it has rightly challenged the Government, we can be in no doubt that, when scrutinising the Government in the past the Committee was clear that there had to be reform. Indeed, Ministers including the hon. Member for Bishop Auckland (Helen Goodman) told us during that Parliament that they agreed that there had to be some simplification and that the issue had to be addressed. I think that we all can, or should, agree on the principle. Of course, the devil is always in the detail and it is right that any reform—not just one as significant as this—is fully and properly scrutinised. That is why I welcome the information that the Government have provided in response to the Committee and the fact that we are having this debate and that the Committee will continue to push until its concerns are satisfied.

We have to remind ourselves that the reform is designed primarily to simplify the benefits system, which has to be done. The other big issue that we continually raised in the Committee during the previous Parliament is that we need to do more to incentivise people to work and to make work pay. There was cross-party agreement and, indeed, ministerial agreement from the previous Government that it was essential to ensure that benefits were sensibly targeted.

The hon. Member for Aberdeen South will remember our trip to the university of York, where we sat through a number of interesting and detailed presentations. We looked at mind-bogglingly complicated graphs of the current benefits system and the tapering. We were told by academics who were more expert on this than we could ever be that, without significant change and proper tapering, the cliff edge would continue and too many people who want to work hard would find that it did not make sense for them to do so when they could earn similar amounts from benefits, which is a choice that they do not want to have to make. That is the thrust of what the Government are addressing.

It is also important to say that this is not a cost-cutting measure. As the hon. Member for South Down (Ms Ritchie) has said, it will not save money for the Department for Work and Pensions, but it is not designed to do so. The Government estimate that it will cost £2 billion more to ensure not only that universal credit supports the people who need support—which is, of course, the primary purpose of any benefits system—but that it has smooth and transparent incentives to work. It will, however, lead to longer-term savings for the taxpayer, because it will make work more financially beneficial. That will also benefit the Treasury, because those people will then pay their taxes and be part of society by contributing in the way that they would wish.

The Committee has been right to challenge the Government on the issue of those who will gain more and those who will receive less as a result of universal credit. Ministers have made it clear that they believe that 3 million families will be better off and that 350,000 children and 500,000 working-age adults will be taken out of poverty, while acknowledging that 1.4 million people would see a drop in income were it not for the transitional protection, which is why that protection is so important. The Institute for Fiscal Studies also estimates that 2.5 million people will be unaffected.

Does the hon. Gentleman agree, however, that there will always be a system for looking after those people who actually need help with this benefit?

Absolutely. During the previous Parliament, there was consensus on the Committee, in the House and, indeed, among Members on both Front Benches that we need to do more to ensure that the benefits system is targeted on those who need it most and that it makes financial sense for those who can and want to work—whether that be full or part time, as appropriate to their other commitments—to do so. No one is suggesting that that is an easy challenge—it certainly is not, as the Committee fully acknowledged during the previous Parliament—but it has to be taken on and I am delighted that the Government have chosen to do so. It is also crucial to ensure that lessons are learned from the pathfinders. I remember looking at some of the pilots in the previous Parliament. It is essential that, during the implementation stage, the Department always takes full heed of the lessons and then makes changes as appropriate.

I want to comment briefly on a few of the issues that the Committee has rightly focused on. We can all agree that it is essential that universal credit works for everybody—for all claimants, not just the majority. It would not be a success if a group of people were significantly disadvantaged by its introduction, which is clearly not the Government’s intention.

On the move to a single monthly payment, I do not think anyone would disagree with the principle that it makes sense for people to have a sense of the money that they are given, to enable them to pay their rent and buy food, and that it is helpful for them to budget, as that will equip them to do so when they find work, as we all hope they will if they are able to do so. The Committee was right, however, to raise its concern that the switch to a monthly payment presents a significant challenge for people and families on a low income, and the Government have rightly responded to those concerns.

The biggest concern, which also involves landlords, relates to direct payments. That is not to say that the arrangements will be a terrible thing in all circumstances. The hon. Member for Aberdeen South will remember that we had exactly the same conversations when the local housing allowance was introduced. We must accept that, although the arrangements will work for some people, there must be a swift acknowledgement in cases where they are not working, before huge arrears can build up. Will the Minister clarify that such a safeguard will be put into the system, so that if things start going wrong, alternative arrangements can be made as swiftly as possible? Those could involve direct payments to the landlord, fortnightly payments or the splitting of payments. I will be interested to hear a reinforcement of the Government’s response to the Committee on that matter.

On the digital question, I believe that it is perfectly sensible to move to an online benefits system. That is happening throughout the welfare system and throughout many parts of the public sector, and it will result in a welcome reduction in costs, as long as we get the IT right. I am now a member of the Public Administration Committee, and this is a matter that the Committee will be looking at, following the publication of its critical report on the disaster of the NHS IT system.

People have rightly expressed concern, however, about those who do not have access to the internet. Many of those on low incomes might not be able to afford the necessary technology—a PC or a smartphone, for example—and older working people who are approaching pension age might never have had any experience of that technology. The Committee has therefore rightly pushed Ministers on this point, and alternative provision has been made, including contact by phone or in writing, or through a home visit. It is right that that should be spelled out so that we can be clear what will happen to those people who cannot reasonably access the internet. I urge the Minister to keep that matter under review, particularly when the pathfinders begin.

My final point relates to information. Any change in the benefit system will lead to anxiety for people even, ironically, when the changes could have a positive effect on them. It is therefore essential that they should be provided with clear, simple and adequate information, and signposted to where they can get advice. That also applies to MPs, because we have all had people asking us for advice on the effect that the measures will have, and we should have at our fingertips all the knowledge we need to advise them as the changes come in.

I pay tribute to my hon. Friend the Member for Eastbourne (Stephen Lloyd), who is also a member of the Select Committee. He regrets being unable to be here today for family reasons, but he is very much here in spirit. He was keen to take part in the debate. He also chairs the all-party parliamentary group on Citizens Advice. The citizens advice bureaux clearly have a role to play in this context, and he and the group have called on the Department for Work and Pensions to work with Citizens Advice to produce an information leaflet on universal credit. It is the ideal organisation to do that. I understand that, having written to the Secretary of State, my hon. Friend has now been told that the DWP will indeed pursue the matter with Citizens Advice. Perhaps the Minister could confirm that that is the case, because that would be a positive development.

In conclusion, this is a huge challenge, but one that would have to be confronted whichever Government were in power. This is a principle on which we can, I think, all agree, without necessarily having to agree on all the detail. I welcome it, but it is crucial to get it right between now and October. I urge the Government to keep the matter under review and then to be flexible if the pathfinders show that further changes are necessary to make it work in the way that, in the end, we all want—to support people who need it and to encourage people to get back into work when they are able to do so.

I am pleased to have the opportunity to speak in this estimates day debate on universal credit, and to follow the hon. Member for Leeds North West (Greg Mulholland). I am grateful to my hon. Friend the Member for Aberdeen South (Dame Anne Begg) for ensuring that we had this debate, as it is a really significant one that affects millions of our fellow citizens.

I shall concentrate entirely on the issue of online applications, in respect of which I think the Government are heading for some really big problems. The Department for Work and Pensions has been far too sanguine about the extraordinarily ambitious target to get 80% of people online by 2017. Shelter, in looking at the issue, says that it is

“not convinced that half of our current face-to-face service users could fully transfer to our digital services”.

I am convinced that the DWP will not be able to transfer them in the way suggested by the Minister. Let me explain to him why I take this view.

First, according to Booz & Company, which did a report for Go ON UK, 10.8 million people in this country do not use the internet. The D-E social group has the lowest percentage of households accessing the internet, with more than 40% of them unable to do so. According to Go ON UK, the group brought together by the industry to promote online skills, more than 16 million people lack basic online skills. They might have used the internet at some point, but they do not know how to do all the different things necessary to fill out an online form.

It is often assumed that it is simply older people who do not use the internet. In an interesting study in the Journal of Direct, Data and Digital Marketing Practice, however, Dick Stroud has conducted a thorough and forensic exploration of who these people are. I urge the Minister and his officials to look at this opinion piece published last year. It shows that, of the digitally excluded, 1.2 million people are young and excluded—in their early 20s and earning less than £10,000 a year. Another excluded group of 1.5 million people who earn less than £20,000 range in age from about 25 to 50. Then we have a group of 2.2 million people in late middle age who are uncertain, but open to persuasion that going online would be a good idea. These are large numbers of people, and they are precisely the people who will be making applications for universal credit. The crossover between the digitally excluded and the universal credit applicant is absolutely huge.

Furthermore, the Minister should converse with his colleagues in the Department for Culture, Media and Sport. Ofcom has reported today that 10% of the population—2.6 million households—cannot access broadband speeds above 2 megabits per second, and those are mainly in the countryside. The picture of the digitally excluded shows not people scattered evenly throughout the community, but people concentrated in particular socio-economic groups and geographical areas.

The hon. Lady is making a very astute point. Some of my constituents do not have access to the internet, and those who do so often end up paying significantly more for it because of their geographical position. However, it is low-income families, wherever they live, who find it hardest to justify an internet connection in their homes, and at a time when libraries are being closed in areas of all kinds, it is increasingly difficult for those with low incomes to go online.

The hon. Lady echoes precisely my own thoughts. I urge the Minister to make a plan, and to look at the geography. He might then begin to be in a position to make a more accurate assessment of the problems that the Department will face, and to develop a more effective strategy for dealing with them than the Government seem to have at present.

Of course there are questions to be asked about whether the Government’s IT system will be up to scratch—we all remember the problems that arose with child support and tax credits—but the question in this instance relates to the capabilities of the population, and that is the other issue that the Government are completely ignoring. The last Labour Government spent more than £400 million on digital inclusion. Between 1999 and 2003, £396 million from the capital modernisation fund and the New Opportunities Fund was spent on enabling people to go online, and in our latter years in government we invested £30 million over three years in UK online centres, which enabled a further 1 million people to do so.

If 5 million or 10 million more people need to be enabled to go online, the Government ought to consider investing serious resources in a digital inclusion programme, but the DWP is spending £1.5 million, as are the Department for Business, Innovation and Skills and the NHS. There are 5 million or 10 million people whom we need to help, and we have a budget of £4 million—just for 2013-14; it does not cover later years. Given the rate at which this seems to work, that will help about 125,000 people. The level of resources and the extent of the focus on the problem are not remotely commensurate with the scale of it.

I am glad that today is an estimates day, because I want to ask the Minister about the motion on the Order Paper. How much of the £507 million “for current purposes” will be spent on extra support in jobcentres to help people who are not skilled, and how much of the £97.5 million “for capital purposes” will be spent on the computers that will be in the jobcentres to help people who do not have computers at home? I have tabled a number of written questions to DWP Ministers, but I have not had any clear answers. The Minister of State, Department for Work and Pensions, the hon. Member for Fareham (Mr Hoban), merely said that his

“survey of working age benefit and tax credit recipients found that 78% already use the internet.”—[Official Report, 29 November 2012; Vol. 554, c. 491W.]

There is clearly a mismatch between what the Minister is being told by his officials and what people in the technology sector are saying. I have also written to the Minister’s noble Friend Lord Freud asking about the Government’s strategy, but I have still not received a reply.

If we are to help those who are digitally excluded, we need to think about why they are excluded. Is it because, like 2.5 million households in the countryside, they cannot get broadband, or is because they are “self-excluding”? According to the surveys that have been conducted, about 50% of people say that they are not interested. Perhaps Ministers think that their “digital by default” programme will enable them to make people interested and to motivate them. I can hardly think of a worse learning environment than someone facing the stressful situation of their family’s income depending on whether they succeed or fail in the test. I can hardly conceive of a worse way of motivating people. People learn best when they are relaxed and are enjoying themselves in a friendly, warm environment. That is not what Ministers are doing. They are going to put extremely vulnerable people under this pressure.

Another issue is cost. Some 25% of people who do not use the internet say that is because of the cost. Half of them say it is because of the cost of access. As the hon. Member for Banff and Buchan (Dr Whiteford) said, an internet connection costs between £3 and £5 a week. People on jobseeker’s allowance and employment and support allowance will be receiving a benefit of £71.70, and after the bedroom tax they will be left with £23 a week; we know that because it is what our constituents tell us. The Minister is looking puzzled. That is what they will be left with once the cost of all their utilities has been stripped out. Based on what my constituents tell me utilities cost them, I have taken away £20 for heating, £10 for electricity, £6 for water rates and £4 for bus fare. That leaves them with £23. I have not included any money for a mobile phone or telephone connection or for a television licence. They also have to pay for things like washing-up liquid, loo paper and perhaps a pair of shoes once a year—a pair of trainers from Sport Direct.

These people will be forced to live on tiny amounts of money once the bedroom tax is introduced. If someone’s food budget is £18 a week, which is what my constituents are facing, I submit they will not want to spend £5 a week on an internet connection, as that would not be compatible with their way of life. There is also the cost of equipment. The cheapest equipment people can get costs £150. Ministers are therefore setting up a lot of people to fail. This is not a reasonable way to treat them.

I urge the Minister to look again at this. Exactly where across the country does he think the problem is going to arise? Will he publish a strategy? What kit is he putting into jobcentres? How much time is he expecting his staff to be offering people to support them? As Members have made clear, filling in one of these forms will take at least half an hour. In my constituency about 3,000 people will be eligible for universal credit. Although it is being phased in so that things will not happen all at once, if we say half of them can manage on the new system but the other half cannot, we will end up in a couple of years with 1,500 people needing help. If the Minister has put three computers into the local jobcentre and they are all operating for 50 hours a week, which would be an amazing feat, it would take 10 weeks for all those people to get their online applications made. The resources Ministers seem to be putting into this are not commensurate with the number of people who are going to need help.

I urge the Minister to look again at this. The Government are heading for a very significant train crash and, unfortunately, those on board the train will be the most vulnerable people in the community.

I am grateful to have an opportunity to speak in this debate. From what I have heard, there appears to be a general consensus, with which I agree, that there is room for the universal credit system. Its aims are laudable; our welfare bill is too big and we have to tackle this problem. I think all Members across the House will agree that this bill cannot continue to grow. It is simply unsustainable. My view, which I am sure many share, is that for too long the poor and vulnerable have been trapped in a welfare mire. How often have we heard our constituents say, “There is no point working a bit longer because if I do that I will lose my benefits”? So clearly we have to examine the system and make it fairer, encouraging those in this trap to put in the extra hours as that will be beneficial for them.

I support the universal credit in principle; it will reward effort and will be responsive to changes in circumstances—if it works. Many hon. Members from both sides of the House have highlighted the word “if”, and I hope that my adding to the ifs will not be to the Minister’s chagrin. I have listened at great length to Mr Kevin Hodder, the chief executive of the East Boro Housing Trust; we debated this for a couple of hours. He has been in this business for many years and has shared with me, for some time now, his extensive knowledge and understanding of the benefits system. He has done so for my benefit, so that I can understand my constituents’ concerns. One or two of them—I suspect there will be many more—have come to me with their worries about the introduction of this new system.

The first risk, which has already been highlighted, is the reliance on one computer system. There are 8 million or 8.5 million claimants—we have heard the latter figure cited—so if the system goes wrong, the risks are obvious. There is no room for error or delay because we are talking about the most vulnerable in our society, and if the money does not arrive on the day they expect it, they will face serious problems. As far as I know, no Government national computer system has worked; I remind Members of the armed forces payments system, the NHS single patient record system, the tax credit errors and the collapse of the Child Support Agency—all of us get many constituents complaining about that. The problems were, in the main, the result of computer glitches. The risk of relying on one gigantic system is that failure would be catastrophic. Mr Hodder’s wise suggestion is that universal credit software could be circulated to the local authority housing benefit departments so that consistent rules are applied.

I am listening with great interest to the important argument the hon. Gentleman is making. Does he agree that the situation is rather worse than he says, because this involves not one great big computer system but two? The parallel real-time information, pay-as-you-earn system in Her Majesty’s Revenue and Customs is also involved, and the two systems have to interlock perfectly for universal credit to work.

I agree with the shadow Minister. When I was a soldier, the great cry was, “Hope for the best and prepare for the worst.” I am a little concerned that, on this policy, the worst has perhaps not been prepared for. Will the Minister, when he sums up, reassure us that there is a system in place that will cope?

In dealing with the inevitable snags, community care grants and crisis loans could be administered by the local departments if this computer system were rolled out to them. The local housing benefit departments in my constituency are already running down their offices, yet their local knowledge could be invaluable in administering universal credit. In the world of IT and computers, how often have our constituents rung a telephone number and got a disembodied voice saying, “If you want flowers, press 1. If you want somebody else, press 2. If you want to go to heaven, press 3. And if you don’t want to bother us at all, press 4.”? At that stage the person wishes they had slammed the phone down and they give up the will to live. Although I welcome IT—I am not a luddite in that sense—I am a great believer in the human touch. Nothing beats eye-to-eye contact with constituents, including, as in this case, the many who need help. If people lose that contact with human beings—leaving aside the distress that will be caused if the computer system goes down—there will be an awful lot of concern, particularly among the elderly, many of whom do not understand the system in any case.

May I point out to my hon. Friend and to one or two other Members that universal credit is a working age benefit and will not affect the elderly?

I take my hon. Friend’s point, but many people who are not of pension age are, like me, middle aged—shall we put it that way?

As we know, universal credit is also intended to go online. As we have heard from many Members on both sides of the House, that will be unfeasible for many and could result in many incomplete applications. Again, local offices equipped with universal credit software might be a great help at least until the system is up, running and proven.

Another of Mr Hodder’s concerns is about the receipt of a single lump sum payment once a month. Although most of the population—75%, I believe—receive their salary once a month, and although we want to treat everyone in this country in an adult fashion, it is pragmatic to realise that many of the people who will receive quite a lot of money in one blow are not necessarily in a position to handle it and have not been accustomed to it. Welfare recipients are currently paid out of many pots and money comes in at different times of the month, possibly to different accounts and different partners. For example, child benefit is often paid to the mother.

Management of a single lump sum payment is likely to prove challenging for many, at least at first. Mr Hodder suggests, and I concur, that payments should be split into two a month to lessen the stress of managing day to day. He also points out that that would make recipients less of a target for payday loan sharks, as the monthly benefit salary would not be so large. I believe that there will be a rise in the number of those sharks, who will prey on those who get their money one month, spend it and then want more money to pay off their bills. The problem will therefore be increased. The money will also often go to one member of the family. If the husband is abusive, for example, there will be a problem if the wife does not have access to the money and it all comes in one lump.

Mr Hodder’s main concern is the proposal to include housing benefit, which was once paid to landlords, in that monthly lump sum. Mr Hodder’s view, with which I agree, is that there is a “huge risk” of non-payment to landlords—I think that that is a pragmatic and realistic fear—because of wilful non-payment or the inability of the tenant to manage funds over a month. He says that the impact on his association and others will be a rise in arrears and collection costs. They will need more staff, the cash flow will be reduced and there will be less investment in social housing. Private landlords are already saying that they will not take on tenants who get their money first, for obvious reasons, so that could also shut the door on the private rented sector. Further down the line, arrears could lead to more evictions, more clogged-up courts and more families being thrown on the mercy of local authorities, which are charged with accommodating them in emergencies.

In my view, those are all unintended consequences, but the human cost means that they matter even more. This ambitious shake-up is bound to cause some problems and I think we all accept that there will be some. Mr Hodder, I and many people to whom I have spoken believe that they could be mitigated by careful forward thinking.

The intention of universal credit is to make the benefits system more streamlined and efficient. I think that we would all agree with the principle that incorporating some of Mr Hodder’s suggestions would give it the best possible start. I hope to hear from the Minister that some of those concerns, expressed by Members on both sides of the House, will receive some answers. I also hope that the Government will consider very carefully all that has been suggested.

When the Welfare Reform Bill was in Committee, the Minister’s predecessor was fond of the bookcase analogy. We were constantly told that what we were dealing with at that time was an empty bookcase, which would shortly be filled. Ministers and some Government Members who have intervened in the debate today, rather than those who have spoken at length, tend to feel that because most commentators, interest groups and parties think a unified system that will take people from unemployment to employment is in itself a good thing, that somehow means we should not be critical of the policy or its contents.

We have reached a point where some of the books have appeared on the bookcase, but there are still large gaps, some of which may not be filled until the roll-out takes place. We should realise, and the Minister should appreciate that, as I understand it—he may correct us—the initial pathfinder will deal only with very simple cases and people who do not have any complicated family situations, so it will test only some elements of the system. After that, more books will doubtless appear. However, one can have the same bookcase as someone else yet disagree radically about what books to put in it. We need to have that debate.

We must be careful not to oversell the reform. Although we talk about universal credit as though it will be simple, in reality universal credit will have lots of arms and legs. It is an umbrella, so to speak, with lots of arms and legs, because there will be different categories of people who fall under this umbrella, who will have to meet different eligibility criteria, who will receive very different payments and elements of payments, and who will be subject to very different conditions in order to get their benefits.

There will be a series of different types of universal credit. I would not be at all surprised if, in a couple of years, for convenience, particularly those who work in the field will refer to employment support allowance universal credit applicants or unemployed universal credit applicants. Otherwise it will be difficult to explain the situation. Universal credit will not be and perhaps cannot be simple. We on the Opposition Benches have said repeatedly that simplification is not the be-all and end-all when one is dealing with people who have complicated lives.

We have to put the financial capacity to deal with monthly payments in place. The Minister may remember that during his previous incarnation in the Treasury we had a debate about basic bank accounts. One of the issues I raised with him in his previous role was the need to extend basic bank accounts and to make it compulsory for banks to provide them. He resisted that move at the time. He may come to regret that in his new role in the DWP because it might have been better if there were a better raft of basic bank accounts that people could access. The number of banks offering basic bank accounts has not grown in the past nearly three years; it has diminished. Where will people be able to have the moneys paid to? Will they be able to get such bank accounts? There are people who cannot access basic bank accounts, either because there is no bank in their vicinity that offers them, or because they are not allowed to have such an account for one reason or another.

There are indeed difficulties getting a basic bank account, but does my hon. Friend accept that there are also people who have had a bad experience with banks, particularly with direct debits, and found themselves overdrawn and incurring lots of charges, and who therefore do not want to use a bank account to manage the money they get through universal credit?

My hon. Friend raises another important aspect. People have run up large bank charges, often inadvertently, on a very limited income. They might decide not to use the bank account any longer because that is easier, or the account may even be suspended.

Many warm words have been spoken about credit unions, but if we are honest about it, in most parts of the UK—the situation might be slightly different in Northern Ireland—credit unions are pretty small and cover only a relatively small part of the population. If we seriously wanted to increase their use, we would have to fund that properly and give them some ability to expand to the extent required. I would be more than happy to direct constituents in that sort of difficulty to a credit union, but I know that the credit union serving the local area currently has very limited capacity to expand. We have to think about that extremely seriously.

Another question considered today was that of the direct payment of rent. There are six demonstration projects, and indeed a report was published some time ago, but it was what the researchers called a baseline project report. In other words, it effectively looked only at people’s attitudes and capacities before the project got going; it proves nothing about whether it is working. Further data published by the DWP in December 2012 showed that in four months 8% of rent had not been collected. At that stage, 316 tenants had already been switched back to direct payment to the landlord, and the range of collections was actually greater than the 92% would suggest. In one project in an Edinburgh housing association, 63 of the 1,832 tenants were switched back to direct payments in the first four months, which I think is a substantial portion in a relatively short period.

It also appears—this will have to come out in the research very clearly—that some of the pilots have excluded some of the people most likely to fail. The pilot in Oxford apparently excluded those considered to be vulnerable, and the one in Wakefield excluded those who did not already have a bank account, so some of the difficult cases have not been included. That is fair enough in a pilot, but those cases must be taken into account before it can be claimed that all will be fine when this is rolled out more fully.

Members have spoken at length about the “digital by default” approach. I am not a luddite. I think that moving towards online claiming, wherever possible, is a good idea. In fact, when I was the convenor of housing on City of Edinburgh council we started a choice-based lettings system. It was possible to apply through a newspaper, people could fill in a form in the more traditional way, or they could apply online. Some people, including tenants’ groups, told us that we could not do it online because people would not be able to access it. We replied that we were giving people the choice. The online take-up was actually higher than many people had feared. Some of them will be getting help to do that, and that is the distinction we have to see.

There is a problem with the top-line figure, which is constantly quoted, of 78% for the proportion of claimants who already use the internet. It is drawn from research done for the DWP. It revealed that 78% have used the internet, but only 48% said they used it everyday, and that includes people in work, on tax credits and right across the whole spectrum. When we break the figures down, we see, for example, that 60% of people who are in receipt of incapacity benefit said that they had used the internet, but only 31% used it every day. There are some important distinctions within these groups.

If the new system frees up more adviser time, that can only be a good thing, but we need to know that that is really going to happen and where it is going to happen. The current situation appears to be quite stressed already. I have been told, and claimants’ experiences tend to back this up, that in Jobcentre Plus in my city people barely get four minutes with an employment adviser. Time is very stretched as it is.

Does my hon. Friend agree that another problem is that the voluntary sector advice agencies are also suffering from a shrinkage of resources? For example, the citizens advice bureau in Spennymoor in my constituency has only a third of the level of resources that it had two years ago.

There is undoubtedly a reduction in resources. Many of the advice agencies that I have contact with are having to tell people that they cannot get an appointment for three weeks, or even four.

Does the hon. Lady welcome the fact that in Scotland Citizens Advice has had an increase of £5.7 million in recent weeks to cope with that situation?

I certainly do, although I rather regret that that money was so long in the coming given that it was available to be paid out some couple of years ago—but better late than never.

Finally, I want to discuss a particular group—single parents. Some of the problems I am going to consider do not necessarily result from universal credit as such, but they will not be cured by universal credit and may even be made worse. For many single parents, getting back into work is not easy. There is a great deal of evidence that many of them, when they do find work, find that it is low-paid and low-skilled work. There is a high level of churn because of the type of work or because of the practical difficulties that can arise. They may find that arranging child care is unexpectedly expensive or difficult—for instance, when they run into the summer holiday problem. All these things can lead to a single parent who wants to work finding a job and doing it for a period, but then having to leave and go back to the beginning again. Skilling up is particularly important.

Over the past few years, including under the previous Government, there have been several changes to the rules for single parents, particularly about their registering for work once their children reached certain ages. Considerable flexibilities were built into the system whereby, for example, a single parent would not be required to apply for a job, go for a job interview or take a job where it would not fit with their child care responsibilities. There are several such flexibilities, none of which, bar one, are in the new regulations that have been produced for universal credit. They are in guidance, but the problem is that guidance is not legally binding and these matters are at the discretion of an individual adviser.

There are currently 12 flexibilities, only one of which has been migrated into the new regulations in its entirety; the other 11 are not there or have been very much qualified. For example, under the regulations a single parent is still able to restrict the hours they work, but only if they can demonstrate that there are jobs with those hours available locally. If there are not, they cannot have that flexibility, so presumably they will have to look for a job that does not accord with their child care responsibilities or look for one outwith their area, which creates a whole new set of difficulties. Anyone who has had to pick up their child from nursery at a fixed time and has experienced the reception they get when they arrive back late because the bus has been delayed will know that working a long distance away is not easy.

It is not at all clear why these changes are being made. They might make it more difficult for single parents to get back into work. If the flexibilities are not there, the other problem that arises is sanctions. If people do not have those flexibilities, they may be required to take on a job—or to refuse a job—that does not meet their needs. If they refuse to take the job, they can be sanctioned. The level of sanctions was increased substantially in the Welfare Reform Act 2012 and the number of people who are being sanctioned is increasing. We are all seeing those people already. I would like the Minister to explain why the decision has been taken not to put the flexibilities for single parents into the regulations.

Gingerbread, which represents single parents, feels that getting skilled has been made more difficult of late. Again, there does not seem to be anything in universal credit that will help that situation. Previously, a single parent with a very young child who was on income support got a fee remission if they did a college course. That fee remission has been removed, so although a single parent with a child under five can still do a college course if they can fit it in around everything else that they are doing, they have to pay for it. When they hit the requirement to sign on for JSA, they will get fee remission for a course, but if a job offer comes up that they have to accept, they will either have to drop the course, which they might be part-way through, or continue the course and be sanctioned. That is not the way to upskill people. Gingerbread has proposed that a single parent who is undertaking a further education course, up to and including level 3,

“should be treated as fulfilling work search and work availability requirements”

until their youngest child reaches the age of seven or the course ends. That is a practical proposal.

There is serious concern that the structure of universal credit, far from enabling single parents to work, will not be of great assistance and might even be harmful. The Gingerbread report, “Struggling to make ends meet”, with which I am sure the Minister is familiar, points out that a single parent who is earning the minimum wage cannot expect their disposable income to increase by much once they start working 10 hours or more. We are talking about very short hours. For anyone who does not understand, we are not talking about 10 hours a day, but 10 hours a week. Somebody who works only three, four, five, six or seven hours a week will be better off under universal credit, but because of the structure of it, once they are working 10 hours a week or more, they will not be much better off. For all that has been said about universal credit making people much better off and encouraging them to go into work, the structure is not quite as good as has been made out.

I am grateful to my hon. Friend for drawing attention to that problem. Does she agree that it is therefore especially unfortunate that in-work conditionality will propel that lone parent to increase her hours or, in other words, propel her into diminishing returns for her work?

I thank my hon. Friend for that intervention. The concept of in-work conditionality, which is new to the UK, needs to be fleshed out considerably as universal credit rolls out. It is not at all clear how it will work. It appears to mean that if somebody is working a low number of hours, they will be expected to look for more hours or for a different job in which they can work more hours. It will be open to the DWP to tell people that they have not made enough effort to do that and to sanction them for it. That is supposed to make people better off; it is supposed to be good for them to go through such a process, but if it does not make them better off, it feels more like punishment than assistance.

The report also looked at single parents who are not on the minimum wage but earn a median salary, and it was calculated that they would be worse off working full time than part time. They would not simply be no better off, they would actually be worse off as their hours increased. Again, that undermines the Government’s pledge to make work pay. Part of the reason for that concerns things such as child care costs. The cap on reimbursable child care costs has not been increased, and those costs are rising rapidly in many places. That has a marked effect on whether working longer hours and increasing earnings makes work pay.

Single parents are just one group that will be involved in this massive upheaval that will either create something completely different, or might lead to something that does not look very different at the end of the day—I am not sure which. There will still be many different categories of people, and the problems that we know about such as eligibility, and issues such as employment and support allowance and the work capability assessment that we have frequently discussed in this House, will not go away with the introduction of universal credit but will be tucked inside it.

I urge the Government to look at some of those issues and not simply to sit behind a general statement that universal credit will make work pay and that people will be better off. They think that if they keep asserting that and say it often enough it will happen, but it will happen only if we get the books right on the bookshelf.

We have had an interesting debate and I congratulate the Work and Pensions Committee, and its Chair, on the report. I share the Committee’s support in principle for universal credit, as well as its frustration that in responding to the report, Ministers gave so few answers to the telling questions that it raises.

The Committee raised the timetable for implementation, and as the hon. Members for South Dorset (Richard Drax) and for Enfield North (Nick de Bois) pointed out, it was always clear that there would be a problem with the IT. We warned the Secretary of State about that simply on the basis of how long it took the same officials to implement much more straightforward changes under the previous Government. The Secretary of State was good enough to meet me in November 2010, and I wrote to him on 16 November 2010—well over two years ago—and warned of

“a serious risk that it will not be ready for new applicants by 2013”.

He replied on 31 January 2011:

“I am confident that I can offer reassurance on each of the points that you raised.”

On 18 April I wrote back to the Secretary of State:

“I remain deeply sceptical of the feasibility of the current implementation timetable…the Department should recognise that the timescale will slip”,

and he replied on 11 May 2011:

“I recognise that we may not share the same overall assessment of the issues”,

which indeed we did not.

In the Welfare Reform Bill Committee, I said to the Minister’s predecessor that

“the system will not be ready by October 2013”––[Official Report, Welfare Reform Public Bill Committee, 28 April 2011; c. 596.]

but the Minister replied that I was “wrong to be pessimistic.” I warned about the problem again in another debate in Committee on 8 June 2011.

Today it is reported that contractors have been told to down tools. The Department has denied it, as has the Minister, but I have no doubt that the reports are accurate. They come from people who have received these instructions, and I have no doubt that before long the position will become clear. The Secretary of State claimed yesterday, and the Minister has repeated today, that

“the implementation of universal credit…is proceeding exactly in accordance with plans”.

The hon. Member for South Down (Ms Ritchie) was right to say that it is certainly not proceeding according to plans. It is genuinely a mystery to me why Ministers deny what is clearly the case.

The Government’s initial timetable for universal credit had all new applications for out-of-work benefits being treated as universal credit applications from October this year. We now know that hardly any new applications will be treated as universal credit applications in October this year and everybody else will be treated as applying for existing benefits. As I understand it—the Minister will correct me if I am wrong—only applications submitted in one jobcentre in each region will be deemed to be universal credit applications, so that is only nine jobcentres. Even then, it will only include people with the most straightforward applications, because the IT will not be ready to handle the rest.

I want to ask the Minister a specific question. For two years, Ministers said that all new out-of-work benefit applications would be handled as universal credit applications from October 2013, and all new in-work benefit applications from April 2014. What is his current estimate of those two crucial dates? Just how far have those milestones slipped? Does he have any dates now that he is confident enough to give the House for when those milestones will be reached?

It is not just I who am worried. The Minister has bigger problems than that. Four times at the regular press conference this morning the Prime Minister’s spokesman was asked to express confidence that universal credit would be delivered on time and on budget. Four times he refused to give that assurance.

It is not just the IT that is in trouble, but the policy too. Ministers have failed to make crucial decisions, as set out in the Committee’s report. The Secretary of State told the Welfare Reform Bill Committee in February 2011 that he would have proposals for entitlement to free school meals before the Bill left the Commons. He did not deliver, and two years later we are still waiting for those proposals. As the Select Committee politely pointed out, the Government

“now needs to make decisions”.

Actually, they should have made decisions a very long time ago, but we certainly need them now. As my hon. Friend the Chair of the Committee pointed out earlier, the pupil premium is also dependent on this, as well as whether universal credit will deliver. The Government’s response assures us that the Department

“has committed to working with other Government departments and Devolved Administrations to ensure that the issue of passported benefits both in the short and long term is approached from a wide perspective and any changes are simple, fair and easy to understand.”

It burbles on in that vein for a page or so, but the Minister must now decide. What is the policy? He cannot keep ducking the issue. It is all supposed to start in October. When will he tell us?

It is not a minor issue. The solution adopted on free school meals will have a fundamental impact on whether universal credit has the intended effect of making it worth people’s while to be in work. If—as is widely suggested—the Minister and his colleagues introduce a crude income threshold for eligibility for free school meals and other passported benefits, they will create the most enormous disincentive for people to get jobs and increase their income—far worse than any of the cliff edges in the current system of which they have been so critical. He really cannot delay these fundamental decisions any longer. He cannot keep putting them off.

The Committee also raises the crucial issue of supporting and funding exempt accommodation. It makes this point:

“DWP must urgently finalise and publish the details of the revised arrangements so that providers have the certainty they need to plan ahead and maintain their service provision.”

I raised this with the Minister in Committee when we debated the regulations on 11 February. I pointed out that Women’s Aid estimates that more than half the domestic violence refuges in the country are not covered by the exemptions in his regulations. The problem is that the regulations use an out-of-date definition. I am absolutely sure that the Minister does want such accommodation to be exempt, but it will not be achieved by his regulations. What is he going to do about that? His response to the Committee does not give an answer. The National Housing Federation makes this point:

“It is vital that the Government ensures the regulations exempt the full range of supported housing by using a definition of supported housing that reflects the set up of refuges, hostels and specialist schemes for disabled people.”

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) was absolutely right to ask the question that was also raised by the Committee: what is going to happen to people who do not have a bank account? How are they going to be paid universal credit? We still do not know. In the pathfinders starting next month in four local authority areas in the north-west, people without a bank account will not be able to claim universal credit. How long will it be before the system is able to cope with people who do not have a bank account? The Committee’s report states:

“The DWP has been unable to present us with any clear plans for how the Universal Credit service will be delivered to those people who cannot make an online claim.”

The response from the Government does not give us that clear plan.

Unison is right to draw attention to a host of basic issues to which we still do not know the answer. The hon. Member for South Dorset (Richard Drax) raised some of those issues, too. How will somebody apply locally for universal credit? The response to the Committee reassures us that

“we will offer claimants the option to claim…in person”.

What does that mean? Where will they apply? Will they go to the town hall, or to the jobcentre? What documents will they need? How does somebody get face-to-face advice if they have a problem? This is all supposed to be up and running from October and we do not know who is going to do this. We do not even know what the online application process will look like in the pathfinders that are supposed to start next month.

One of the Government’s worst errors in the whole project—the Chair of the Select Committee has already drawn attention to it—was leaving council tax benefit out of universal credit and devolving it with a 10% cut. The Committee’s report was right to point out the problems that that will cause. It works against simplification, it undermines work incentives, and it makes it much harder for people to know whether they will be better off in work. It has, as the Committee stated,

“the potential seriously to undermine the objectives of Universal Credit.”

We have heard about a lot of other problems in the debate. Problems relating to digital access were highlighted by my hon. Friend the Member for Bishop Auckland (Helen Goodman). The hon. Member for Leeds North West (Greg Mulholland) was right to draw attention to the problems emerging in the direct payment demonstration projects: the National Housing Federation tells us that rent arrears in the demonstration project areas are up by 60%.

It is, I am afraid, universal chaos: fundamental policy decisions have not been made; obvious gaps have not been plugged; where precise answers are needed we just get vague flim-flam; key milestones have gone back by a year or more; IT contractors are reported to have been told to stop work; and the Minister blithely assures us that it is all proceeding exactly in accordance with plans. It is too late for flim-flam. These crucial decisions cannot be delayed any longer. It is time now for the Minister finally to give us some answers.

I commend the Chair of the Select Committee, the hon. Member for Aberdeen South (Dame Anne Begg), for the way in which she opened the debate, and for the balanced way she set out the issues in its report. I thank the Committee, too, for its work. Often, people outside the House underestimate the important role that Select Committees play in scrutinising policy development, but the report is a very good example of the excellent work they do to highlight the issues and to get the balance right.

Balance was what was missing from the speech by the right hon. Member for East Ham (Stephen Timms). I think there was a 10-second acceptance at the start that universal credit was a good idea. He then spent the rest of his speech trying to conjure up reasons why it was not a good idea. [Interruption.] No, that is absolutely true. I will give some examples. He and the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) have been touting for some months now the story that people have been walking off the project and that the project is in chaos. We saw it in today’s Guardian—an article that perhaps should be seen in the context of today’s debate—and the right hon. Member for East Ham said just now that he expected contractors to walk off site. What a load of rubbish we have heard! In a statement today, HP, one of the big contractors, said that it remained committed to supporting the DWP, to the universal credit pathfinders going live in April 2013 and to subsequent releases. It also said that it would continue to work with the DWP and our other suppliers on this major programme of welfare reform.

I can reassure the Minister that the source of the report came from the companies concerned. But let me ask him this: the initial plan was for all applications for out-of-work benefits to be handled as universal credit applications from October this year. Is there a new date for that milestone, and if so, what is it?

Yet again, the right hon. Gentleman needs to get some perspective. We have always made clear our plan for a progressive roll-out of universal credit, for exactly the reason that hon. Members have mentioned, which is that previous Governments have launched unsuccessful big-bang IT projects. We have been clear, therefore, that we need a progressive roll-out—pilots, lessons learned, consolidation and then next-stage roll-out.

That is the best way to ensure that universal credit is rolled out correctly and it is a significant change from how previous Governments have handled IT projects, including the disastrous tax credits system when, of course, the right hon. Gentleman was a Treasury Minister. We have made clear our plan for a gradual roll-out for new claimants from October 2013. We have always said that the progressive roll-out of new claims across the country would begin in October 2013. That is a simple restatement of what we have always intended to do. I respect the right hon. Gentleman, but I think he has overreached himself on this argument.

No, I only have a relatively short amount of time in which to respond to quite detailed questions from hon. Members. [Hon. Members: “Give way!”] No, I want to make some progress.

No, all the right hon. Gentleman is doing is scaremongering, which is not the right approach. Someone made the valid point that misinformation undermines claimant confidence in the system. I want to address some of the concerns that people have expressed in this debate and demonstrate how the Government are tackling the issues highlighted in the Select Committee’s report.

I am not going to give way. The more often the right hon. Gentleman seeks to intervene, the less time I have to engage with the substantive discussion.

I will remind the House of the aims of universal credit. It is designed to avoid universally recognised problems in the current flawed system, which traps people on benefits and makes them dependent on the welfare state. It will ensure that work remains the best route out of poverty and benefit dependence for those who can work, and is intended to be radically simpler than the complex web of tax credits and benefits it replaces. We made a deliberate choice here. My hon. Friend the Member for Leeds North West (Greg Mulholland) was right to highlight a previous Committee report on the complexity of the welfare system. Rather than replicating the current system, in all its complexity, we are seeking to design a system that is easier for claimants to understand and creates better incentives.

Crucially, universal credit brings together in-work and out-of-work support into a single monthly payment for those out of work or on low earnings. At present, there are separate systems for out-of-work and in-work benefits administered by different national and local agencies. A move into work therefore entails a recalculation of entitlement, multiple communications and possible delays and gaps in payments. As a result, many people are not prepared to take the risk of moving into work.

This is not just about those who are out of work, however; it is about those who are in work as well. One of the rigidities built into the tax credit system is the 16-hour-a-week rule, which means that people offered work have to ask themselves, “Is it worthwhile my taking on this additional work?” Many people have to go to the jobcentre to make a better-off-in-work calculation. We cannot have barriers in place preventing people from wanting to earn more, take on more hours and look after themselves and their families.

With universal credit, we are aiming above all to achieve a fundamental change in attitudes to work, helping people to see more clearly that they are better off in work and encouraging and supporting people to move into work or to increase their hours.

As I said earlier, too many people are trapped into working 16 hours a week by a system that means there is no point in extending their hours because they would be worse off. I have even heard of people turning down bonuses from their employers because they are concerned about the impact on their benefits. What a tragic situation we are in, when a system of benefits traps people in low incomes. What we need to do—I hope Opposition Members will reflect on this—is find a system that helps people to get back into work. That is one reason why it is important to have in-work conditionality, to help people move up the income scale and find ways to increase their earnings by getting new skills, getting promotions and increasing their hours. In focusing on how we resolve some of the exceptions in the system, Opposition Members are in danger of losing sight of the reason for doing this: to free people from a complex system of benefits that has trapped so many out of work.

I am most grateful to the Minister for giving way. He was not able to give a date for the earlier milestone; he is now setting out the advantages, as he sees them, of universal credit for people who are in work. To begin with, all new in-work benefit applications were going to be universal credit applications from April 2014. Can he tell us when that new milestone will be reached?

We have always said that there would be a progressive roll-out of the system. I am not going to give a running commentary on the timetable at this moment. We have been very clear—[Hon. Members: “Ah!”] No, we have been very clear that we would have early implementation in April 2013, and we are going to see that in the Greater Manchester and Cheshire area. That will enable us to test the end-to-end process in advance of the progressive national roll-out of universal credit from October. Once a pathfinder has happened, we will continue to adjust the exact timing and sequence of the migration process in the light of experience, including the operation of the pathfinder service in the Greater Manchester area. That will be done exactly to avoid the problems that previous Governments have faced with big-bang system changes falling over.

I would also point out to hon. Members who continue to question the Department’s ability to deliver significant system changes that we have launched the latest generation of the child maintenance system on time and on budget. We have also successfully launched the universal jobmatch service, which is helping more than 1 million jobseekers find work and get into employment more quickly. That we have been able to do those things demonstrates the Department’s capacity and capability to deliver programmes on time.

Even if things work entirely to plan and universal credit proves to be easily accessible and simple to use for the majority of claimants, we know that some of the most vulnerable claimants will be unable to make claims unassisted. They will go to an independent advice agency such as Welfare Rights or Citizens Advice for help. Can the Minister assure me that those agencies will be able to contact the Department easily with queries? They already struggle in the present system to find a dedicated helpline that can help them as advisers. Can the Minister confirm that that will be put in place and will work effectively for adviser agencies under universal credit?

I want to return to the question of support and advice agencies, because the need to support people on to universal credit is an important issue that has been raised. Before I do that, let me talk about a couple of other issues that people have raised in this debate.

A number of hon. Members have raised the issue of online access. We should recognise that digital exclusion is a major issue affecting communities and individuals. It acts as a barrier to employment, as well to claiming universal credit. We need to lift that barrier and make it easier for people not just to claim universal credit, but to get the online and digital skills they need to get into work. Universal credit gives us an opportunity to move people online.

I have only just started making this point, so let me make a bit more progress.

Research suggests that 92% of advertised vacancies require applicants to have basic IT skills. Therefore, those without such skills are considerably limited in their employment prospects. By using the digital channel as the default, we will be able to identify individuals who are struggling to manage or who lack the basic skills to use online systems. In doing so, we will be able to target support so that they can learn these essential skills, thus improving their prospects of finding work. Work done by the Cabinet Office on internet usage demonstrates that 78% of existing benefits and tax credits recipients already use the internet. Our latest figures show that more than 51% of jobseeker’s allowance claims received by the Department are now made online. I think that that demonstrates that people will be able to do it. We need to encourage more people to go online and find ways to give that support. For those who cannot use the internet, telephony and face-to-face access will be available. Rather than accepting that people cannot use the internet, we should try to help them get on to it and use telephony and face-to-face access as a fall-back mechanism.

The hon. Member for Bishop Auckland (Helen Goodman) said that 10% of people do not have access to superfast broadband with a speed of more than 2 megabits per second. She will be pleased to know that people will not require broadband at that speed in order to access universal credit and make claims.

The Minister might not know the answer, but will there be a real person at the end of the telephone, or will people have to enter all their details by pushing buttons and never get to speak to anyone?

I assure the hon. Lady that a lot of real people answer telephones at the Department. I am sure that she has visited some of our contact centres and seen them in the flesh. It is important that that human support is available either locally or over the telephone.

In my experience of the disability living allowance, it takes some time to speak to a real person because the caller has to push lots of buttons, and that in itself acts as a barrier.

Indeed, but we also need to triage people so that they can get to the person with the right expertise and ensure that we focus our resources on the more difficult and challenging enquiries, which requires some triage through the telephone system.

I have about 15 minutes left and am keen to deal with some of the other points that have been raised.

On advice and support, the advice sector is key to ensuring that we deliver universal credit effectively. We work very closely with the stakeholder organisations to ensure that their expertise is utilised. This is a moving picture and several things have happened since the Government published their response to the Committee’s report. On 11 February, we published the local support services framework, which addresses what support UC claimants need, including those with complex needs, and how we will work with the third sector and local authorities to provide that support in the most effective way.

At the heart of the framework is a partnership approach, which emphasises the need for close working between DWP, local authority managers and service providers such as social landlords and charities to agree on the services that will be needed at a local level. By encouraging close partnership-working between agencies, we will provide a more joined-up, holistic service for claimants with complex needs and a single claimant journey towards greater independence and, wherever appropriate, work readiness for claimants.

The hon. Member for Stretford and Urmston (Kate Green) asked about access. We have not decided yet whether there should be specialist advice line for welfare rights advisers, but we will try to bring together all benefits guidance in one place—I think it is a legitimate criticism to say that it has been fragmented in the past—and provide a much more simplified resource for relevant information. I hope that will make life easier for advisers in the third sector. I take on board the hon. Lady’s helpful point.

A number of hon. Members raised the issue of monthly payments, including the Chair of the Committee and my hon. Friend the Member for Amber Valley (Nigel Mills). Universal credit is designed to reflect a world where 75% of employees are paid monthly. Paying universal credit monthly will not only reflect patterns that people who fall out of work are used to, but help smooth the transition into work and encourage claimants to take personal responsibility for their finances. For the first time, we will be able to identify those claimants who struggle to manage on a monthly salary, and will provide support to help them develop the necessary money management skills to remove barriers that prevent some of them from moving into work.

We recognise that a move to a single monthly household payment is a significant change to the way in which many benefits are currently paid and that some claimants will require support to help them manage that change. Money advice will be offered to all claimants when they make a claim, and given to those who have a clear need for it. There will be different levels and types of money advice, based on need. Some claimants will be signposted toward an online service, some might be offered a single session over the phone, and others might be offered an intensive face-to-face session with follow-up calls. We also recognise that some clients might need money advice for only a short period, while others will need it for longer. We are trying to create a service that can be tailored to the needs of individuals, rather than a one-size-fits-all service.

On 11 February, we published guidance giving details of the factors that advisers should consider when discussing alternative payments with claimants. Those factors include drug and alcohol dependency. For most claimants, alternative payment arrangements will be time limited, and offered alongside further budgeting support and help to move towards managing a standard monthly payment. I mentioned that drug and alcohol issues were one of the factors that should be borne in mind. Others include learning difficulties, mental health conditions, those in temporary or supported accommodation, perhaps including people who are homeless, those who have severe debt problems and those who are the victims of domestic violence. So a range of factors will be taken into account to determine whether a monthly payment should be made, or whether an alternative, more frequent payment would be in the claimant’s interest.

My hon. Friend the Member for Enfield North (Nick de Bois) made the point that this is all about boosting aspiration. It is about enabling people to manage their finances and to get into work, and we need to ensure that we have a system that meets mainstream needs but also supports the needs of more complex cases, rather than a scheme that is designed entirely around the needs of the exceptions. It is important to get the balance right.

I just want to say something about basic bank accounts. We have set aside £145 million to stimulate new financial products for universal credit claimants, and we are working closely with financial providers across the private, social and third sectors. We are continuing to consult those providers and other stakeholders about the arrangements for those products, and we will announce our detailed approach and requirements in due course.

The hon. Member for Edinburgh East (Sheila Gilmore) referred to the fact that we had discussed basic bank accounts when I was in my previous role. There is a real challenge involved. One of the final pieces of research produced by the financial inclusion taskforce identified that many of the people who did not have a bank account were those who claimed benefit, and that many people who had had bank accounts had ceased to use them. It is important to ensure that we put the right financial products in place, but we must also give people the support they need to manage their money so that they can remain banked, rather than dropping out and becoming unbanked.

The Minister mentioned people in supported accommodation. Does he have a response to the concern that I raised about women’s refuges and other supported accommodation, given that the definition in the regulations does not seem to be quite right? Can he give me any reassurance about continued support for people living in such accommodation?

The definition in the regulations will be the one that is in the existing regulations, and it has worked well so far. We are talking to women’s refuges and others to try to understand what has changed, and why the existing definition no longer gives the desired results. That is a matter that we want to continue to discuss.

We need to be careful when we talk about the direct payment of rent, because the vast majority of people have no problem paying their rent or their mortgage. My hon. Friend the Member for South Dorset (Richard Drax) has raised this matter. In one of the pilots, 92% of people paid their rent on time. Among the other 8%, some were underpayments and some were mis-payments, but not all were wilful non-payments. We have an obligation to try to move that 8% so that they can pay their rent on time and meet their obligations. Also, this change will encourage social landlords to think about the broader needs of their tenants—how they can find the necessary skills to get work, and get the necessary financial and budgeting support to manage their money more effectively—rather than just thinking about collecting the rent.

We need to ensure that the new system does not remove personal responsibility from everyone, while recognising that we will need to do something for those who are facing the greatest problems. We are working on that, and the pathfinders will help us to gain that knowledge. We want to make sure that the risks are managed and that landlords can request that the housing element is paid to them when the rent arrears trigger has been reached. These arrangements will be in place for some high-risk claimants from the outset until there is improved financial capability. In effect, we will start the shift to direct payments for claimants with the easier cases and then progress to the more difficult cases. The approach that runs through the roll-out of universal credit is to pilot things and understand the lessons to be learned to ensure we avoid mistakes in the future.

I am sure that I have already spoken for far longer than I should have done, but I think our debate has been important. I end by echoing the words of my hon. Friends who have contributed. We are talking about a change in culture. It is not just a benefit replacement exercise; it is about helping people back into work—making sure that they know that it is better to work than not to work, that it is better to work longer to earn more than to work fewer hours and earn less. We need to tackle some of the barriers to getting people into work, not just in respect of the complexities of the benefit system, but by enabling people to manage their money and to take responsibility for their finances and for their future.

Universal credit is a huge step forward in encouraging self-reliance, but we recognise that a number of people—not the vast majority of people—will need more support. The measures we have set out today and the way in which we have developed them, even from when we submitted our response to the Select Committee’s report, demonstrates this Government’s serious commitment to get universal credit right. It is by getting it right that we will have the best chance of getting people out of poverty.

Dame Anne Begg seeks the leave of the House to make a short response to the debate. With the leave of the House, I call her to speak.

Thank you, Mr Deputy Speaker, and I would like to thank everyone who has contributed to today’s debate, which has been extremely worth while in teasing out what the Government have done and the questions they needed to address. Some fairly meaty questions are still to be answered—not least the one about passported benefits, which I noticed the Minister did not answer, probably because it remains a thorny issue.

I suspect that the Select Committee will return to this subject in the coming months or years—depending on which side of the House is believed on the timetable for the roll-out. Issues will arise once things are up and running and once real live people are claiming the benefit. Because so much about the universal credit will depend on behavioural changes, it is impossible to say at this stage which side of the argument is correct as to how people will behave when people are faced with the reality of claiming the new benefit. On behalf of the Select Committee, let me say that this debate has provided a great opportunity for us to explore what we thought would be the most important challenges for the Government in the future.

Question deferred until Seven o’clock (Standing Order No. 54)