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Universal Credit

Volume 629: debated on Monday 9 October 2017

The roll-out of universal credit is proceeding to plan, gradually and sensibly. People are moving into work faster and staying in work for longer. The most recent phase of expansion will only take the proportion of the forecast claimant population receiving universal credit from 8% currently to 10% by the end of January.

There is a great deal of support for the principles of universal credit. However, the roll-out has been characterised as

“operationally messy, socially unfair and unforgiving”.

These are not my words, but those of Sir John Major. If the Secretary of State will not postpone the roll-out—along with many other right hon. and hon. Members, I would like him to consider that again—will he consider two other remedies: to drop the waiting period, and to allow the benefit to be paid fortnightly?

Let me be clear: as I touched on earlier, the evidence so far shows that those who go on to universal credit are more likely to be working six months later than they would be had they been on the legacy benefits, and they are also more likely to be progressing in work. That is really important, and it is not something that I want to deny people. I believe that we should roll out something like this gradually and sensibly, and make changes as and when necessary, but that is exactly what we are doing.

Those of us who remember the chaos around the introduction of tax credits can see the good sense in a phased, gradual introduction to universal credit. However, I have to say to the Secretary of State that if we do not learn the lessons from the pilots, we frankly risk losing any advantage that we will gain. Some 57% of applicants for universal credit are having to borrow money before their first payment. Is not that alone enough to justify a pause?

The system of advances is an integral part of the system. It has always been there, but we want to make that properly available. Nobody who needs support should have to wait six weeks before they receive any support. What we are doing is making it clear that people can receive an advance of their first month’s payment, which is then deducted over the next six-month period. That is helping people deal with cash-flow issues in that first month, which I think is a sensible and pragmatic response.

A recently bereaved constituent of mine, a working single parent, has seen her income reduced by £300 a month since transferring to universal credit. For her, work does not pay. Will the Secretary of State urgently review the link between agreement to support payments and universal credit, and will he stop the roll-out until he has done so?

The hon. Gentleman says that work does not pay. Let us be clear: universal credit always means that it is worth working an extra hour and worth taking a pay rise. It is always worth working more under universal credit, which was not the case with the legacy benefits. That is why the evidence is suggesting that people do work more and do work more hours than they do under the legacy systems.

Does my right hon. Friend agree that one of the reasons why more people have gone out to work this morning than ever before in our nation’s history is that we as a Government have not ducked the challenge of welfare reform, we do not let people languish for years on out-of-work benefits, and universal credit is an essential part of the welfare reform programme?

My right hon. Friend is absolutely right. It has been the consistent policy of this Government—including under my predecessors, such as my right hon. Friend—to ensure that we have a welfare system that puts work at the heart of it. That is one of the reasons why we have record levels of employment, as he so rightly says.

No, the hon. Gentleman was standing up on No. 1 and he has a very similar question, so he can unburden himself of his important thoughts now.

7. My right hon. Friend is aware that I and many of my Conservative colleagues have pressed him on the issue of providing support for people during the six-week assessment and transition periods for universal credit. Will he confirm that jobcentres in Scotland will proactively offer such advances and support where needed? (901039)

My hon. Friend is right to highlight that point. As I said last week, we are refreshing the guidance to DWP staff to ensure that people who need support—who will struggle to get through to the end of the assessment period without financial support—have access to that money quickly. Increasing the eligibility for advance payments is one of the best ways in which we can address some of the concerns that have been raised and learn from that experience.

Although I believe that advance payments are treating the symptoms rather than the cause, I welcome the Secretary of State’s additional guidance to make sure that jobcentres offer them. Advance payments cover roughly two weeks’ worth of money: what support is in place for people waiting three, four, five, six or seven weeks?

The level of advance payments of 50% is, we believe, the right balance between getting support to people early in the process—they can get it very quickly—and ensuring a reasonable level of deduction for that advance payment in subsequent months. Clearly, this is an issue that we will continue to look at, but 50% strikes the balance. I welcome my hon. Friend’s support for that announcement.

Rent arrears, food poverty and in-work poverty have all rocketed in areas where universal credit has been rolled out. The third sector has united to join in our call for universal credit to be halted, and we know that pressure is mounting on the Conservative Back Benches for that to happen. Is not the Secretary of State’s apparent climb-down on crisis loans and advance payments an admission that universal credit is failing?

Not at all. I come back to the point that universal credit is giving more people the opportunity to get into work and progress in work. The personalised support that is provided by jobcentres where universal credit has been rolled out is proving to be effective. To those people who call on me to stop the process, I say that once fully rolled out, universal credit is likely to mean that 250,000 more people will be in work than would otherwise have been the case. I will not deny those people that opportunity.

The Secretary of State is either desperately deluded or ignorantly incompetent. In one of the areas in which universal credit has been rolled out, East Lothian Citizens Advice reports that more than half of its clients on universal credit are worse off by an average of £45 a week. The just under a third who are better off have gained just 34p a week. How much more evidence of social destruction will it take for the Secretary of State to have the strength to halt the roll-out?

Universal credit is adding to what the Government have already been doing—ensuring that work is at the heart of welfare. That is why we have 3 million more jobs than we did in 2010. Welfare reform is part of the reason for that, and it is part of the reason why we will continue to press on with reforming the welfare state to encourage work and help people to progress in work.

May I warmly welcome advance payments within five days and immediate needs payments the same day as a definite step forward? Given the reasonably high levels of adult illiteracy and poor computer skills in some areas, can the Secretary of State say something about how volunteers might be able to work alongside personal advisers to help people fill in the application form in the first place?

It is important that people filling in forms receive the necessary support, but jobcentre staff provide that support. Voluntary organisations may be able to assist, but Jobcentre Plus staff are already giving the intensive support necessary to help people to complete the applications.

Given the Secretary of State’s confidence in the roll-out of universal credit to another 150 Jobcentres Plus, can he give the House a guarantee that none of our constituents will face hunger or near destitution through lack of money over the Christmas period?

Universal credit is about ensuring that our constituents are in a stronger financial position. That is what we are trying to deliver by enabling them to work and providing the support they need. As I said earlier, if we look at where we want to get to by 2022, 8% of claimants are already on universal credit and by January it will be 10%. The process is gradual and measured, and that is enabling us to learn from the experience and make improvements, which we will continue to do all the time.

I support universal credit and its roll-out, but I am concerned about applicants with zero savings who, if they lose money for one or two weeks, have nothing to fall back on. Will the Department consider the possibility of jobcentres writing supportive letters to landlords to explain the situation in which benefit claimants find themselves, because the worst outcome for applicants is that they lose their home?

My hon. Friend makes a very good point. There is an obligation on social landlords, given the source of income through universal credit, to work constructively with tenants. If a tenant has a reasonable expectation of receiving housing costs as part of their universal credit payment but has not yet received them, the landlord should not take action and the tenant should not face risk of eviction.

As we have heard, universal credit is causing debt, rent arrears, and even homelessness up and down the country, with many claimants already in work. Given that housing associations are saying that over 80% of rent arrears are down to UC, and that the Mayor of Greater Manchester is predicting that rough sleeping will double as a result of UC roll-out, how many more families does the Minister estimate will be made homeless this winter as a result of the Government’s refusal to pause UC roll-out?

Let us be clear: no one needs to go six weeks without financial support when there is a system of advances in place. I make the point to all right hon. and hon. Members that if they are aware of constituents who have not received an advance, they can make it clear to them. Let us be realistic: the fact is that we are now moving towards a welfare system that does not put in place barriers to work and does enable people to make progress. It is no good Labour Members saying they are in favour of the principles, but then trying to obstruct the delivery of a reform that will give 250,000 more people a job.