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Universal Credit: Debt Repayments

Volume 654: debated on Monday 11 February 2019

10. What assessment she has made of trends in the level of debt repayments by people in receipt of universal credit. (909116)

The Government have recently reviewed the maximum rate of deductions, which will be reduced from 40% to 30% from October 2019. We are also taking action through the introduction of a Breathing Space scheme and the setting up of the Single Financial Guidance Body, which will consider the needs of people in vulnerable circumstances.

The Minister will be aware that I recently met the Minister for Employment regarding my constituent Georgina Woods, whose historical repayments soared from £11.12 a month to £79.46 a month when she moved from tax credits to universal credit—a situation that she cannot get resolved because she tried to save the Government money by not applying for tax credits. It is really difficult to resolve this case due to a lack of communication between the Treasury and the DWP, and that issue will only get worse as universal credit rolls out and it is more difficult for constituents to get this resolved. Why is the Minister’s Department treating people more harshly than the Treasury is?

I know that the hon. Lady has met my hon. Friend the Minister for Employment on the issue of her constituent and that the Department awaits more details to investigate it in more detail. The wider point is that the Minister for Employment is looking into this issue with Her Majesty’s Treasury and will, I am sure, update her.

I welcome the reduction in the maximum deduction rate, but what analysis has the Minister done of what that may mean for the poorest households and how will he communicate the impact of the change?

We believe that it is a positive step in the light of the review that took place. I draw my hon. Friend’s attention to the Breathing Space scheme that is being introduced by Her Majesty’s Treasury to assist people on an ongoing basis. That scheme came in in the legislation that we introduced last year.

Why does the Minister not stop universal credit until such time as the Government get the result of the pilot scheme? Anywhere else, if people have a pilot scheme, they wait to implement it and learn the results from it before rolling the system out. You would do that in the private sector. Why not do it here?

With respect, the answer is twofold. First, there has been a gradual introduction of universal credit and, secondly, the pilot scheme is in respect of managed migration.