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House of Commons Hansard
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Universal Credit and Debt
05 June 2019
Volume 661

[Sir Henry Bellingham in the Chair]

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I beg to move,

That this House has considered universal credit and debt.

Universal credit affects a huge proportion of our population already. As of April this year, 2 million people were on universal credit, and in the last three months more than 200,000 extra households each month have started a claim. By the time it is fully rolled out, around 7 million households, comprising around 15 million people, will be on universal credit—almost one quarter of the population and 28% of people under pension age—and around 38% of our children will be growing up in households on universal credit. It will affect a whole generation.

The impact of universal credit is felt not only at an individual, but at a societal level, so it is incredibly important that we get it right. That is why I set up the all-party parliamentary group on universal credit, to collect evidence and make recommendations. I thank all those parliamentarians here today on both sides of the House who have contributed to that very productive group, alongside our colleagues in the Lords, charities and researchers. I must especially mention Holly in my office, who has been running it as a labour of love.

Most of all, I thank the individuals who are claiming universal credit, particularly all those who responded to the social media outreach that I and Parliament have done for this debate, telling us about their often very personal experiences. The amount of money we have affects not just our bank balance, but our ability to look after both our physical health, in terms of affording housing and enough to eat, medication and travel to health appointments, and our mental health, particularly when we get into debt.

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I congratulate the hon. Lady on securing the debate. Does she agree that until relatively recently there was a broad political consensus on the need to revise the labyrinth of welfare dependency and the bureaucracy surrounding it, but that that should be done in a way that minimises the impact that she has just been outlining and that many of our constituents are suffering from?

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I agree; it was a laudable aim, but unfortunately it is not happening in practice, as shown in some of the evidence. That is why I secured this debate.

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I congratulate my hon. Friend on securing this debate. We have had numerous debates on universal credit, and I have said this before and will say it again: we should call a halt to universal credit, and if it cannot be reformed we should disband it, because people are suffering as a result. We also now have the working poor, including in cities such as Coventry, where last year 20,000 people used food banks. When we think about it, the impact that that is having on people is incredible.

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I hope the evidence I will bring today, and the evidence colleagues will bring from their own experiences, will help to make that case without my having to make it explicitly. There are certainly many changes that should be made. The evidence I have heard from people who say that it is not just the amount of money they have on universal credit, but their powerlessness against a system that takes deductions seemingly at random and with no recourse to justice, that leaves them feeling absolutely hopeless and in despair.

One man from Wales told me on social media:

“It is very difficult to manage on universal credit, payments are very low…I’ve had to go without food to have heat and vice versa. This with my health condition has led me into depression & despair at times. Universal credit are always deducting monies eg carers allowance etc which has left me worse off. It’s very difficult to get through to talk to anyone via phone and very often treated as a second class citizen.”

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The hon. Lady is making an excellent case for changes to universal credit. Pertinent to what she is saying about people being left unable to pay, does she share my concern that 51% of the food parcels that the Salvation Army distributes are to people who come as a result of having insufficient support from the universal credit system? Does she agree that maybe we should put back the money that was taken out of the budget?

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Absolutely. My local jobcentre also tells me that the major reason why people are seeking support with food parcels is that they simply do not have enough to get by on, often because of the deductions.

A mum from East Anglia told me that she has had to resort to loan sharks, and she almost got involved with a man just so that he could buy some food for her and her daughter. Now she has had letters saying that money will be deducted for her debts. She has lost jobs because she could not afford a bus pass and she has friends who resorted to selling their body for food because of their children.

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rose

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rose

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I will go across the House first.

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The hon. Lady is making some good points, and she is right to draw an association between adverse life events, debt and poor mental health. On the issue facing many of the people she is using as examples, who are experiencing difficulties with universal credit, is it not the case that the wait of five weeks to receive universal credit exacerbates debt issues and the challenges facing people in sometimes very difficult circumstances, and that the Government perhaps need to look at that as a priority in helping to improve the system?

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The hon. Gentleman has pre-empted part of my speech. The five-week wait for payments is doing a tremendous amount of damage, putting people into debt right at the start of their claim.

That is not to say that universal credit has not improved—I am sure we will hear a lot about that from the Minister. I pay credit to the Department for listening, and especially to the current Secretary of State, who has made changes beyond those forced on her by High Court cases. However, there is still an enormous amount to do to help people to get by and feel secure with universal credit.

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A number of my constituents are living below the poverty line, because that is what their universal credit calculation assesses them as being entitled to. It is not surprising that three quarters of those who are in rent arrears are on universal credit, while only one quarter are not. Does my hon. Friend agree that the way we calculate welfare payments to the most vulnerable must be looked at again?

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Absolutely. As I will come on to discuss, the problem is not only welfare payments, but the deductions made from those welfare payments. People who are already in poverty are having huge deductions taken from their incomes with almost no recourse to justice.

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Will the hon. Lady give way?

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I will take one final intervention, then I must make progress.

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I thank the hon. Lady for giving way. This is a point that I imagine the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) will elaborate on, but the Highland Council’s budgets have been hit to the extent of £2.5 million just from dealing with universal credit. That money is money that we could be spending on classroom assistants, who are facing swingeing cuts not of their own making. Should that money not really be repaid to the Highland Council to make up for all this?

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All councils need an uplift in their budget, but if the Department for Work and Pensions was to give money away, I would say it should go into the pockets of the people who are suffering at the sharpest end of universal credit.

We have already seen four years of a benefits freeze that has cut more than 6% from those benefits. That is on top of the three-year freeze in 2011 and the 1% benefit cap from 2014. On housing, the impact of those freezes, together with limiting local housing allowance to the lowest 30% of rents, means that now tenants in 97% of areas must make up a rent shortfall out of their universal credit. In one in five areas, that shortfall for a family with children in a two-bedroom home is at least £100 month, Shelter has calculated. That is a huge amount taken out of an already low income, but universal credit will mean even more reductions.

With managed migration having been delayed, most people will transfer on to universal credit due to a change in circumstances—anything from having their first baby, losing a job or moving to a different local authority area. Those 5 million or so households are not due to receive any transitional protection if they were better off on legacy benefits. Contrary to what Parliament was promised when the cuts to universal credit were pushed through in 2015 and 2016, most people will immediately be worse off.

Even after the changes to universal credit, the Joseph Rowntree Foundation has calculated that, although 5.6 million people in working households will gain an average of £3,000 a year, 5.1 million working people will lose an average of £2,300, including 1.7 million who are already in poverty. Of non-working households, 1.9 million people will gain an average of £2,000 a year, but 2.6 million people will lose an average of £1,400 a year, with half of those—1.3 million—already in poverty. Overall, even after the changes, 7.5 million people will gain from universal credit, but 7.7 million people will lose out, including 3 million households already in poverty. While the Government may state that more is being spent on universal credit, which may well be correct, that does not change the fact that the majority of people already on very low incomes, many of whom are in poverty, will be worse off.

Even those who are supposed to be better off on universal credit often struggle because of the deductions from their payments. According to yesterday’s written answer from the Minister, who I thank for responding in time for the debate:

“Of all eligible claims to Universal Credit Full Service due a payment in Feb 2019, 57% (840,000 claims) had a deduction.”

An answer to a further parliamentary question showed that an average of 10% of all universal credit is now deducted from people’s claims. Almost everyone seeing deductions took the advance payment introduced to help people get through the minimum five-week wait for their first payment. Some 60% of people take that advance, mainly because rent is payable in advance, whereas universal credit is payable in arrears. That advance has to be paid off over 12 months, so people are paying 13 months’ rent out of 12 months of income. With a system that in 97% of areas does not even give enough money each month for one month’s rent, it is not surprising that people are struggling, and that five-week wait is absolutely part of that.

On top of repayments for advances, another 440,000 households are also repaying at least one other debt for benefit overpayments, social fund loans or other advances. That does not include third-party debts such as rent arrears, utility bills or council tax debt. The Department does not keep data on those debts that it also deducts. I question why not, as it clearly has the data on the deductions being made and should monitor the impact on vulnerable people. Of those 840,000 households seeing deductions, half were of up to 20% of the standard allowance in universal credit, 170,000 were between 21% and 30%, 238,000 were between 31% and 40%, and 13,000 were above 40%.

With 40% of the standard allowance as the current maximum deduction supposed to be permitted under universal credit, that means deductions of £127 a month for a single person’s claim or £200 a month for a couple. Of the 3.3 million couple-parents already losing an average of £2,500 a year under universal credit—more than £200 a month—a majority see deductions on top of those losses of up to another £200 a month, plus their rent top-up of around £100 a month, so many will be £500 a month, or more than £100 a week, worse off.

It is not surprising that we see such an increase in people going to food banks and struggling with debt, like one of my constituents, Gareth, who is struggling to keep his head above water. He suffers from anxiety and depression. His mother died recently and he split from his partner so had to move into his own place and claim universal credit. He had been working as a cleaner but had to give up his job. He was awarded universal credit of £692 a month, including £374 for housing, although the lowest rent he could find is £500 a month, so he has to make up the shortfall of £126 a month. Some £58 a month is being deducted for his advance payment, and £46 a month for an earlier budgeting and crisis loan, leaving him with £588 a month, of which his rent is £500, so he is left with just £20 a week for all his bills and food. He is experiencing extreme poverty, which is obviously impacting on his health.

Those deductions are things he knows about, but many are not. The second highest number of deductions are for tax credit overpayments, and two thirds of people migrating on to universal credit from tax credits are seeing deductions for an overpayment. The Treasury states that £6.9 billion of tax credit overpayments will be transferred on to universal credit. The reduction in the excess earnings limit in one year from £5,000 to just £1,000 in 2012 has meant that constant overpayments are now hard-wired into tax credits, but in many cases these are historical.

Only 29% of that £6.9 billion relates to 2016-17 onwards. More than half relates to between 2011-12 and 2015-16, and 16% is even older. Many people just were not aware of these overpayments and are not given the opportunity to challenge them. Locally, I have the case of Mrs G, who has a disability. She migrated on to universal credit because she had to move into accessible accommodation, which happened to be in the neighbouring local authority. Only after she had claimed was informed that she had tax credit overpayments of around £450 from 2011 and £850 from 2005. She had not claimed tax credits since 2015, and had paid off the only overpayments of which she had been informed over the next two years. She challenged the overpayments through Derbyshire County Council’s welfare rights service, which is marvellous at handling these cases, but was told that she had been informed about them in 2011 and 2006, and as the Inland Revenue had not received a dispute within three months of those letters being sent, the overpayments could not be challenged.

After losing her disability premiums, Mrs G was already £43 a week worse off under universal credit—almost £200 a month. She was having £42 a month deducted to repay her advance payment and was left with only £169 a month. A further £48 a month was then deducted for her tax credit overpayments, which she faces for years to come. Faced with having to live with a serious disability on just £121 a month, and with no one in government prepared to look into her case, the welfare rights service told me that Mrs G’s mental health deteriorated rapidly and that, on new year’s day, she attempted to take her life. Fortunately the attempt did not succeed, and she is now being supported by her GP, but five months later the issue is still not resolved, even with expert advice and her local MP contacted. Mrs G says,

“it’s on my mind all of the time”,

and it is still affecting her health.

The inability to challenge deductions—or even, in some cases, to find out about them—leaves people feeling utterly helpless and either angry or hopeless. People often receive a note on their journal saying:

“We agreed to pay a fine from your universal credit”,

but they are not even told how much the fine is, where it comes from or how to challenge it. I have seen cases of much more than the 40% limit being taken from people’s standard allowance, leaving them with practically nothing to live on. Advisers on the universal credit helpline have been unhelpful and aggressive, even to Citizens Advice and the welfare rights service.

Real examples like those from in and around my constituency, where limited numbers of people are on universal credit, bear out the problems illustrated in those answers to parliamentary questions. They are key drivers for the increase in food bank use and debt and rent arrears, and are a significant reason for the huge increase in depression and anxiety.

The Government must act. It will not necessarily take anything very radical. Many of the actions have already been agreed, but they need to be brought forward and done now. We need to look at the five-week wait, as I think is agreed across the House, and at the very least, as a first step, bring forward the two-week run-on of jobseeker’s allowance, employment and support allowance and income support from July 2020 to July 2019. The maximum 30% cap on deductions needs to apply now, not in October, when another 800,000 people will have applied for universal credit and be suffering 40% reductions. And people suffering hardship should be able to reduce that.

The extended repayment period for advances from 12 months to 16 months should apply now, not in October 2021. Historical tax credit overpayments should be written off, as the Government stated they were doing back in 2011. Later overpayments should be proved and the opportunity given to challenge them properly before they are collected. The benefit freeze needs to be ended and the cap on rents restored at least to the 30th percentile. And the monthly assessment period should be reviewed, as the High Court has stated it should be.

Just the measures that I have listed would be an enormous help for the hundreds of thousands of people—almost 1 million—suffering already under deductions from universal credit. If this is test and learn, those people are the guinea pigs that this Government are experimenting on. The Government can make changes. We in Parliament get a second chance at legislation, but the people who are suffering this system now are left with spiralling debts, to which they can see no end. They are driven by the unresponsive system even to try to take their own life. They do not get a second chance at living a better life. Their children do not get another chance at a childhood not marred by poverty. Another 60,000 families will apply for universal credit next week. That is why it is not just our job but our absolute duty to get it right.

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Order. In addition to thanking the hon. Member for High Peak (Ruth George) for her exemplary and moving speech, I point out that a lot of right hon. and hon. Members are hoping to speak, so we will have a limit of between two and three minutes on speeches—voluntarily, at the moment.

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I hope that as I am the only speaker from the Government side, you might show me a little leniency, Sir Henry, but anyway, it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for High Peak (Ruth George) on securing the debate.

The full roll-out of universal credit in Lowestoft started in May 2016. The process has not been straightforward. Many of the most vulnerable in society have been put under enormous pressure and have faced real challenges in getting by day to day. The situation has improved: the Government have listened and introduced changes. However, much more needs to be done if universal credit is to achieve its goals of transforming people’s lives in a positive way; encouraging and supporting them into work; and simplifying the welfare system.

I sense that at the outset, the sheer scale of the task of introducing universal credit was not recognised. It is a mammoth task that requires a complete change of mindset by everyone involved and the implementation of an enormous IT project. Some of the assumptions on which universal credit was based have been shown to be idealistic and could not be implemented in a fair way in the real world.

Jobcentres, citizens advice bureaux and councils have stepped up to the plate and really worked hard to get the new system working fairly and properly. As I said, the Government have been listening, and have introduced changes to improve the roll-out. They are right to adopt the test and learn approach, but more needs to be done to ensure that debt, which burdens people, causing distress and worry, does not unnecessarily build up. I shall quickly highlight five areas in which action is required to alleviate the albatross of arrears.

First, serious consideration needs to be given to abolishing the five-week wait for universal credit. The think-tank Bright Blue has concluded that the initial waiting period is a design feature that is inherently flawed. Secondly, the feedback that I am receiving from constituents is that the lack of transitional protection for former recipients of the severe disability premium is pushing claimants into debt. The Government need to get on with addressing that.

Thirdly, universal credit needs to be adapted to address the needs of those on zero-hours contracts. Quite often, such work is heavily affected by the weather, and during lull periods, in which people claim universal credit, the delay in payments leads to an inescapable spiral of debt, which is never paid off from one season to another.

Fourthly, there is compelling evidence from organisations supporting those facing domestic violence that the single payment arrangements are putting the victims of domestic violence at added risk, with perpetrators having universal credit payments paid into their own bank accounts. That means that they can use the money as a tool for coercive control. To address that, universal credit payments should be separate by default.

Finally, East Suffolk Citizens Advice has advised me that the Department for Work and Pensions does not provide it with feedback when it makes a request for assistance with the journal of a client whom it is supporting. I appreciate that there are data protection requirements, but that issue needs to be fully addressed if universal support is to be fully effective.

I commend both the Minister and the relatively new Secretary of State—I hope that she stays in her post—for listening and responding. I acknowledge that theirs is a difficult task, but I urge them to take on board the further feedback from this debate. For the sake of the vulnerable people who rely on universal credit, we must get it right.

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It is a pleasure to serve under your chairmanship, Sir Henry. I congratulate my hon. Friend the Member for High Peak (Ruth George) on an absolutely outstanding opening speech. There is not much more that one can say. However, I will pick up on a few points.

To understand the rise in poverty that people are facing across the country—not in isolated areas, as some on the Government side would like to say—we need look no further than social security policies, unfortunately, and universal credit is a key aspect of that. The Child Poverty Action Group said back in 2015 that an additional 1 million children would be living in poverty. Just a couple of weeks ago, Policy in Practice estimated, on behalf of the Children’s Commissioner, that half of low-income households would lose nearly £3,500 a year, which will see child poverty double. The figure is already at 4 million—three quarters of the children living in poverty are from working families—and it is set to double. That is down to three social security policies: the two-child limit, the benefits cap and universal credit—particularly, as my hon. Friend said, the five-week wait, and the repayment not just of the advance loan but of other debts.

We recognise the intervention in last autumn’s Budget, but it is paltry compared with the £12 billion that was cut in the 2015 summer Budget. It did not go even halfway to restoring what was cut. It is still the case that 40% of people on UC will be and are worse off—this applies especially to disabled people; 1 million disabled people are worse off under universal credit—by nearly £2,000. It also applies to the self-employed and single parents; they are all worse off as a result of universal credit. We have touched on the natural migration that is happening, separately from managed migration, as a result of a change in circumstances.

The UN special rapporteur on extreme poverty and human rights, Philip Alston, said last month that the UK’s poorest people face lives that are “solitary, poor, nasty, brutish, and short”. He accused Ministers of being in a state of denial about the impact of policies, including the roll-out of universal credit, and referred to the “systematic immiseration” of a significant part of the British population. I know that his comments have caused some consternation on the Government side, but we have only to look at Westminster tube station to see our homeless people. Two thirds of those in homeless refuges are people who have issues with universal credit. We all have constituency cases—I shall mention a few if that is okay, Sir Henry—of people who are really suffering.

Sally is a single mum who moved out to escape an abusive relationship. Due to her change in circumstances, she has lost £400 from her universal credit. Katie’s employers made a mess of their returns, and she was left with £67 to live on. It was her employer’s error. She said:

“Every time I call they just say there’s nothing they can do and I just have to wait for a decision. Please help me as I’m at the end of hope!”

June was in receipt of employment and support allowance with a severe disability premium. Again due to a change in circumstances, she lost £300 a month. Karen works for the Greater Manchester police and has a two-year-old daughter. She was told by the jobcentre that universal credit would pay for 85% of her childcare. She had to pay it up front, but she was still waiting six months later. That is unacceptable, and it is happening up and down the country.

The Minister will be aware that universal credit has a bad press. In debates such as this, it is our job to draw attention to the dire circumstances that people are facing. There are also rumours, based on leaked emails, that there is a planned propaganda exercise to try to restore the public’s faith in universal credit. I would be grateful if the Minister could address that. I have gone over my time, so I will end there.

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I am afraid we will now have to move to a two-minute limit on speeches.

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It is a pleasure to serve under your chairmanship, Sir Henry. I congratulate the hon. Member for High Peak (Ruth George) on securing this debate.

In Inverness and the highlands, we have had universal credit for six years. Thanks to the Tory-Lib Dem coalition, we were already suffering from austerity. There was one food bank in Inverness. With the addition of universal credit, problems rocketed. We now have a food bank in every quarter of the city and beyond. My constituents face choosing between buying clothes for their children, switching on the heating and putting food on the table.

Other hon. Members will recommend changes, but given the extremely limited time that I have, I will focus on the debt accumulated for every single household in Highland, and give a warning to hon. Members who are dealing with universal credit in their constituency case-loads. Highland Council has incurred debts, directly attributed to universal credit, of £2.5 million. Of those debts, £600,000 is directly due to administrative costs resulting from universal credit. The details of those costs have been provided to the Minister and the UK Government. They have said in written answers to questions that no council should bear an additional burden or debt as a result of universal credit, yet it is a fact that this debt is out there.

It is incumbent on the Minister and his Government to sort this out now for the people of the highlands, to repay the money that those people are due, and to ensure that councils across the rest of Scotland, and the other nations of the UK, are not similarly burdened. This shambolic roll-out of universal credit continues to cause harm in people’s homes and to their health, and to harm those who are not directly involved in universal credit.

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It is a pleasure to serve under your chairmanship for the first time, Sir Henry. I thank my hon. Friend the Member for High Peak (Ruth George) for securing this debate, and for her excellent speech setting out the issues. In the time I have, it is not possible to repeat the arguments, but it is clear from the experiences hon. Members have related, from all parts of the United Kingdom, that universal credit is not working.

The Trussell Trust is heavily involved in this debate, and it supports the points put by my hon. Friend, particularly regarding the five-week wait. This subject comes up frequently. In both Houses in the past year, there have been 1,858 references, 70 debates, seven written statements and two Divisions on universal credit, yet we do not seem to be any further forward.

The overwhelming majority of experiences quoted in debates and put forward in questions about universal credit are negative. There is no doubt that it is increasing hardship. The Government must recognise the problems being caused. It has been suggested that it is a flexible and personalised system offering unprecedented support, but that is clearly not the case. We need firm action from Ministers, not just assurances about mitigating the worst effects.

In the few seconds remaining, I ask the Minister whether he thinks it is reasonable, when people are facing such dreadful financial hardship, for the Department to spend over £23 million advertising universal credit in a single newspaper, the Metro? I feel that is a shocking waste of money. [Interruption.] I have received a written parliamentary answer from the Department showing that it is true. I would welcome the Minister’s comments on that.

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I thank the hon. Member for High Peak (Ruth George) for bringing this debate. As I often do, I will give a quick example. A troubled young man from my constituency, from a good family, is unable to deal with his social situation and finds himself sleeping rough. As he is a new claimant, he has to move on to universal credit. He goes to the housing executive, which tells him that he is not a priority, and to self-refer to a hostel. He depends on his family.

I want to put on record that the staff at the Ards benefits office—Frances, the manager, Lee and Donna—are tremendous and exceptional. If every person had such people to respond to them, it would be very helpful. They do their best to help, but they can only do what the system allows them to do.

Due to problems in the past, my constituent is already paying £10 a week out of his jobseeker’s allowance, and £40 a month comes off his housing benefit, which leaves him with £30 to live on. Internet is essential for those making online claims. What if somebody cannot use the library or another place with wi-fi? He waits five weeks for a claim that is not even back paid. What if he did not have a loving family, doing what no one would expect them to do for a 40-year-old man? Is this system working? I say to the Minister: it is not—far from it.

I meet people with severe and immediate financial hardship every day. Nearly a quarter—24%—of all universal credit claimants have a deduction of above 20% of their standard allowance. Research by StepChange found that even a deduction of 5% would push nearly half of StepChange clients on benefits into a negative budget. When a 40% deduction is applied—these are serious figures—70% will be pushed into a negative budget.

I ask the Minister: can we give staff such as Frances, Lee and Donna in the social security office in Newtownards the opportunity to read a situation, and allow them the discretion to allow past bad debt to be repaid at a nominal rate? We should understand that the private sector does not understand the bedroom tax, and rent does not come down to what the Government say it should be. It just does not work.

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I congratulate my hon. Friend the Member for High Peak (Ruth George) on her speech. It is a fact that more people who go on to universal credit are seeking debt advice. In my constituency, 90% of new claimants in social housing go into rent arrears. Of those, 60% go into arrears of over £600. Those who can least afford the benefits freeze have been hit the hardest by it. We have talked about the five-week wait and the advances. [Interruption.]

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Order. We have a Division. I will suspend the sitting for 15 minutes, assuming there is one Division. We can resume with the hon. Lady when we come back.

Sitting suspended for a Division in the House.

On resuming

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Order. The debate will now conclude at 12 minutes past 4.

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Thank you, Sir Henry. I was talking about the five-week wait and advances. Even with a 30% payment back, 65% of StepChange clients who are in debt will still have problems paying. They will still have problems paying their gas, electricity and other bills. I want to ask the Minister how advisers ensure that repayments are affordable. I believe that there are safeguards, but I have never heard what they are. Do they use a single financial statement, as most creditors do? Do they look at other debts? We know that many people on universal credit who have had the five-week wait have other debts. They have gone to high-cost lenders and owe on the gas and electricity.

I also want to ask the Minister whether the debts to Departments are included in the proposed breathing space scheme. That would be a help. At least it would give people time to work it out, but unless the DWP accepts affordable repayments, even that will not help people on universal credit who are being forced into debt. I have always said that simplifying the system was a great aim, but people’s lives are not simple, and the people I am talking about are the ones who can least afford a bump in the road. Throwing people into debt makes life more complicated. It makes more people go to the doctor with mental health problems and depression, and eventually it costs the state more.

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This is a great opportunity for the Minister—a valuable chance to hear from different constituencies about the situation of those claiming benefits through universal credit.

Gloucester’s experience broadly mirrors that of the country over the past 18 months. The roll-out has steadily expanded. By February, just over 4,000 people were on universal credit. That represents 26% of our population—slightly more than the 24% figure for Great Britain as a whole, and marginally less than the figure for the south-west region, which is 27%. The figures have continued to rise and I suspect in Gloucester it is now close to 5,000 people.

I pay tribute to the staff of Jobcentre Plus, especially the work coaches, who are implementing the policy and working closely with my office when constituents have difficulties. It is of course true that there are difficulties, and 117 of my constituents have been in touch with me and my office about issues. The vast majority of them are having difficulties with application forms. One of my staff, who is dyslexic, did the form herself. It took her seven minutes. I have tested it myself and it took me marginally longer, but broadly the application form is challenging only for those without personal internet access or much experience of digital processing. That, of course, is why the contract with Citizens Advice is so important.

I shall briefly share the Citizens Advice experience of UC inquiries, which is important. First, the calculation of benefit entitlements is more transparent than under legacy benefits, which is, of course, a significant improvement. Secondly, with the exception of those in receipt of disability benefits, it sees little difference between UC and legacy benefits. Thirdly, the increased availability of advance payments has improved the situation, but further flexibility would, it is noted, be beneficial. The last comment is that it is fairly commonly recognised that those in receipt of disability benefits are worse off than they would be under the previous system. Perhaps the Minister could comment on that. In my experience the situation is varied. People suffering from multiple sclerosis have quite often received greater benefits than previously, so there seems to be a little variation from disability to disability.

Clearly, debt is an important issue. Large numbers of our constituents have debt issues. More research is needed on how those debt issues arise and why so many people have so much debt when they come on to universal credit. That is, of course, a wider issue than universal credit itself.

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I shall be very brief. I know that there are many aspects to universal credit, but I want to focus on the in-built five-week wait, which is pushing people into severe hardship and is cruel in the extreme. To say that advance payments address that is simply disingenuous, since those payments are unaffordable loans by another name, offering claimants the Hobson’s choice of hardship now or hardship later. That must urgently be addressed.

The loans have to be repaid and take no account of people’s ability to repay them. That is how other loans work, but the DWP advance payment loans have repayments set at a fixed level, which can be hard to challenge even if people fall into financial hardship while trying to repay them. Renegotiating repayment levels is rare but even if someone manages it, they are by that time already likely to be in serious financial difficulty with other bills.

The debt that people are pushed into can sometimes overwhelm them, or can undermine them so much that entering or sustaining employment becomes a much greater challenge, as people are forced to rely on food banks. The only way to deal with that pernicious aspect of universal credit is to remove the need for bridging loans by ending the five-week wait. There should be a single, non-refundable assessment payment for all claimants during the five-week wait period, with immediate effect.

If the Minister does nothing else today, or during his time with his current portfolio, he can and should do one thing: abolish the five-week wait. By doing so, he could make life much easier for many households who are struggling under the system as it is currently designed.

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It is a pleasure to serve under your chairmanship, Sir Henry. I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing the debate.

There is an argument for a simplified benefit system, but what we know of universal credit is that it has led to many cases where people are trapped in further poverty owing to the way the system is administered. In its current form, it is causing too much hardship and stress. Every week my constituency office, like many others, supports local people who have been placed in difficult situations. I also work closely with the citizens advice bureau, providing support jointly to constituents in need of advice and support. According to my local citizens advice bureau, the issue of universal credit was raised with it on 1,882 occasions last year. I think that that highlights the scale of the need.

I want to mention advance payments. Because of the wait before people get their first payment, many fall into debt. People clearly need the advance in the initial period, as they have no money to live. However, the repayments are often too high and that leads to continuing debt problems, which cause anxiety and stress. There is much confusion about the repayment period for advance payments. In my constituency, although the maximum period is 12 months, I have heard of cases where repayment is expected within three months. Again, that causes further debt, anxiety and stress. Claimants have a choice of repayment period up to a maximum of 12 months, and up to 40% of their claim.

As we have heard this afternoon, the Government are planning changes to the repayment period, which will be a maximum of 16 months, with deductions of no more than 30% of the claim. Those changes are in the right direction, but they do not go far enough. We have heard more today about looking at other debts, and that is an avenue that it is important to explore. The disappointing thing is that we have to wait until the end of the year for the changes to take effect.

I ask the Minister to give us clarity about the changes and to make them a lot sooner. People need help now, because they are in debt now. They are using food banks more than ever. Will the Minister and the Government take note and take action as soon as possible?

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It is a pleasure to see you in the Chair, Sir Henry.

This debate is in stark contrast to the advertisements for universal credit that we see in certain newspapers. Those adverts should not include a DWP or universal credit logo; those advertisements would not look out of place in an episode of “Jackanory”. As a constituent pointed out to me yesterday, one advertisement mentioned the advance payment, but did not say it was a loan. Does that advance come in wrapping paper and ribbon? The advance payment is a loan, and the Government cannot keep denying that or saying that it is something else. That loan is adding to universal credit debt, as is the five-week wait. As has been said, many of those leaving work were paid weekly or fortnightly, and they then have to wait five weeks. People are refusing the advance because it is a loan.

Some 60% of those with debt reductions are not getting the help they need from creditors, so they are borrowing more money. Those with deductions on universal credit are becoming more reliant on foodbanks, and Scottish Welfare Fund crisis grants are increasing all the time as a result. Some 40% of those with deductions are also behind with other household bills, such as food or fuel—it is a circle. My great fear is that the Government are not following Cabinet Office guidelines on debt collection, and that this is become a loan shark’s charter. This is a serious issue, and I hope that the Minister and his Department will get a grip on how they deal with debts and universal credit.

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I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing this important debate. With the best will in the world, this seems to have become a state-devised system that, by its design, drives people into gross financial hardship. We have heard about the difficulties of the five-week wait, and about the 40% repayment rate on any debt that occurs. We have not talked about the advance up-front costs of childcare payments and the 85% payment that can be obtained through universal credit.

My constituent is 21. She is a single parent and has an apprenticeship in a doctor’s surgery. She is paid the lower apprenticeship rate, and takes home just £111 a week. She has to pay her childcare upfront. The element of childcare provision in her UC was suspended, and because she obviously required that childcare, she ended up with more than £2,000 of debt. Only the fact that her parents could bail her out helped her through that difficult situation, and an intervention from my office subsequently got that money repaid.

How can we have a system that drives people into debt? There is undoubtedly a link between the two things. It could be rental debt; a local housing association stated that after the launch of universal credit its rent arrears increased immediately, and that as of June 2018, UC claimants accounted for 40% of its overall rent debt. That cannot be allowed to continue. In 2009-10, 350 people used the local food bank, but recent figures suggest that that number is now 2,525. That food bank is now so overburdened that it will have to close to focus on its core system—something has to change.

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It is a pleasure to serve under your chairmanship, Sir Henry. I also wanted to mention childcare payments, but I will write to the Minister separately and concentrate my remarks on tax credit debt.

Three weeks ago, I was told in an answer to a parliamentary question that 255,000 claimants—one in six universal credit claimants—had received a deduction for alleged historical tax credit overpayments. Last week, in widely reported coverage, Citizens Advice stated that the figure was actually 410,000, which is closer to a quarter of all claimants. Will the Minister clarify that point and say which figure is most accurate? Even the lower figure of a quarter of a million overpayments and the associated debt, as a result of problems within HMRC that are perhaps years old or involve arbitrarily fixed rates that do not reflect people’s wider circumstances, are a real problem. Crucially, many people do not know that they can challenge that overpayment, and its impact is considerable.

I urge the Minister to put in place a new minimum repayment threshold for all non-fraud overpayments or other DWP debt. That threshold should genuinely reflect living costs and not discourage claimants from seeking work. There must be flexibility to consider individual circumstances, and claimants should be encouraged to complete income and expenditure forms, and only be asked to pay what they can afford. No family should ever receive less than their standard allowance or be worse off in employment, and no family should be forced into greater debt by the actions of the DWP.

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I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing this debate. Leigh has been a pilot area for universal credit since 2013, so as a representative of a northern town with extensive experience of universal credit, I can say with certainty and after countless surgeries that it is driving people into poverty, into food banks, and into debt.

We know that universal credit is not working because a recent report by the Association of Retained Council Housing found that in the north of England, 75% of universal credit households were in arrears, compared with 39% of non-universal credit households. In our local authority, universal credit tenants have £1.9 million of rent arrears, which is a shocking £534 per tenant on average. Those are not isolated cases; that is caused by the failing system. With a 97% likelihood of local universal credit claimants falling into arrears, only a total and fundamental overhaul of our welfare system will suffice.

The hard reality facing those going on to universal credit is a choice between a lengthy delay for the first payment or an unaffordable loan that only kicks the can of financial hardship further down the road. Since universal credit was introduced in Leigh, my mailbox has been full of individuals desperate to receive assistance because, through no fault of their own, they have found themselves let down by a system that is so complicated that they struggle to navigate it. How do the Government respond? The Minister can take one of two paths: either he will listen to the facts, stories and experts, or he will follow the Chancellor’s example and claim there is no crisis. For the sake of my constituents who are tackling mounting debt, I sincerely hope he will choose the former path.

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I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing this debate, on her fantastic speech, and on her fantastic, dedicated work on welfare. She is a tireless campaigner.

As many of today’s contributions and evidence from Citizens Advice Scotland have shown, debt is built into the universal credit system. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) spoke about survivors of domestic abuse, and I too wish to focus on that important area. Survivors of domestic abuse often flee relationships with little or no resources, and often after being subjected to economic abuse. For them, the five-week wait is particularly damaging. Although advances are available, that is a loan that must be paid back.

The charity Refuge recommends that survivors of domestic abuse be exempt from repaying advances, as the initial period after fleeing an abusive relationship can be costly. People often have to buy a lot of possessions and set up a new home and a new life. If they have to repay an advance, their future income will be heavily reduced. I hope the Minister will consider that issue and tell me his thoughts.

As I have highlighted previously, single household payments can easily be used by coercive or abusive partners to trap people in an abusive relationship. Rent arrears accumulated under single payments mean that survivors have restricted options when they are fleeing, and it is common for landlords to refuse to accept tenants who have arrears, even if those arrears were accrued due to domestic abuse. That huge issue must be ironed out.

I wanted to talk about some constituency cases today, but I do not have time. The constituency cases that we raise time and again in respect of universal credit are not unique; this is happening everywhere. This issue is raised on the doorsteps, in our surgeries and with our neighbours. It is such a huge issue and I am fed up with speaking about this cruel system that does not work. The Government must take their fingers out of their ears and stop defending it. They must work with Members across the House who have spoken up about this issue, stop this system and rehaul it once and for all.

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Before I call the SNP spokesman, I thank right hon. and hon. Members for showing so much restraint. The Opposition spokesmen can now go from eight minutes to 10 minutes. I call Mr Neil Gray.

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Thank you, Sir Henry. It is a pleasure to serve under your astute chairmanship, which has allowed a bit of latitude in the debate and for so many voices to be heard. I am very grateful to the hon. Member for High Peak (Ruth George) for securing the debate. She covered a lot of ground in her speech and I will try my best to sum up her contribution and the other important contributions that have been made.

The hon. Lady spoke about deductions being taken, apparently at random. I totally agree. She also mentioned carer’s allowance. She may not be aware that in Scotland we have looked to do something different on carer’s allowance. We are uprating carer’s allowance to better acknowledge, in some small way, the great work that carers do in our society. I encourage her to look at that.

The hon. Lady was right to say that universal credit has improved. There have been some improvements of late, and I am sure she would agree that the changes appear to acknowledge some of the problems that we have all been campaigning on, but do not go the full distance in terms of resolving the problems that are clearly still there—for instance, the two-child policy, the benefit freeze and the five-week wait. I will come back to some of those. She was also right to highlight the so-called major budget interventions that were made by the Government on universal credit. They do not come close to making up for the cuts that were made to it in the 2015 Budget, which made it almost unrecognisable from what was originally envisaged. I commend the hon. Lady on her speech.

The hon. Members for Waveney (Peter Aldous) and for Midlothian (Danielle Rowley) touched on the issue of separate payments. The Scottish Government and the previous Administration in Northern Ireland have looked to try to resolve that, and I would encourage the UK Government to look at that again and to stop insisting on charging for that.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) is an authoritative voice on the subject, and it was good to see her here. She was right to draw on the evidence put forward by Philip Alston, the UN special rapporteur on extreme poverty. The UK Government have chosen to attack him personally, rather than to address the issues that he has quite legitimately raised.

My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) has possibly the greatest experience of us all on the impact of universal credit. He was right to raise the issue of the £2.5 million debt that Highland Council now finds itself in, and the £600,000 in administration costs that the UK Government should be paying up for. Of course, it is a triple whammy: UK Government austerity on public finances, UK Government austerity on personal finances and now the local authorities have that added burden on their services.

As the hon. Member for Strangford (Jim Shannon) did, I commend DWP staff, who try to resolve the issues we raise with them. They do their best to deal with those issues within the stringent policies implemented by UK Ministers.

The hon. Member for Great Grimsby (Melanie Onn) was absolutely right about advanced childcare costs—I have had many similar cases. I find it incredible that universal credit is paid in arrears, yet the bills that people have to pay on childcare must largely be paid in advance.

The hon. Member for Gloucester (Richard Graham) looked to paint a particular picture on universal credit. I encourage him to look at the Citizens Advice Scotland report and briefing that was available ahead of the debate. I think it would contradict and enlighten him greatly.

My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) pre-empted much of what I have to say on the five-week wait. I appreciate her intervention. My hon. Friend the Member for Glasgow South West (Chris Stephens) dissected the DWP’s propaganda regarding universal credit that has been out of late.

I also commend the hon. Members for Easington (Grahame Morris), Bristol South (Karin Smyth), Makerfield (Yvonne Fovargue), Leigh (Jo Platt) and Merthyr Tydfil and Rhymney (Gerald Jones). This has been a very broad debate, with many good contributions.

As has already been highlighted, there are a number of issues at play on universal credit and debt. I am grateful to Scope, Shelter, the Child Poverty Action Group, StepChange and Citizens Advice Scotland for their briefings.

The first issue is the five-week wait. I appreciate that the Government have at least partially acknowledged that there is a problem, by looking to extend certain legacy benefits and to expand advance payments. However, much of the run-on for legacy benefits will not happen until next year, and no run-on help is available for those who are in touch with universal credit for the first time. Those fixes are not in themselves going to solve the problem, as the evidence from CPAG and Citizens Advice Scotland confirms. That is why I have asked Ministers to look at making what is now the assessment for an advance the first UC assessment, and making the advance essentially the first payment. If the recipient is shown to need the money at that point, why would the Government deny them that as part of universal credit, rather than financially penalising them for months after? I do not think there would be a major cost implication, other than to shift payments to the front end of the claim instead of further down the line.

Payment of housing costs to landlords is a major issue for both tenants and landlords. My local authority, North Lanarkshire Council, is having serious problems with the inflexibility of the current system on when rent payments are made. That means that I have received loads of cases where council tenants are getting chased for rent arrears, when the delay is in fact caused by the DWP. The DWP has acknowledged that issue, but there is no date for when it will move from a four-weekly to a monthly payment system. I encourage the DWP to work with local authorities and other housing providers to establish a more flexible system that enables them to know for certain when rent is to be paid.

The benefit freeze has already been raised. It is having a major impact on indebtedness as part of universal credit. While most working-age benefits have been frozen for four years, living costs have risen sharply with higher than anticipated levels of inflation. There is not an expectation that the freeze will continue beyond this financial year, but the Treasury is going to more than recoup its estimated savings from the policy this year. Quite frankly, low-income families have paid more than their fair share towards this Government’s policies and the benefit freeze should have ended this year. What estimate have the Government made of the impact that their benefit freeze has had on low-income families and poverty levels? What other detrimental impacts has it had?

Direct deduction rates must be looked at again. The hon. Member for High Peak was right to focus on that issue. If only DWP policy were to match that of the Cabinet Office, as my hon. Friend the Member for Glasgow South West said, which advocates fairness in debt collection and an understanding of the impact that debt collection processes have on people. As the hon. Member for High Peak said, that could start with the DWP understanding what debt repayments are actually for, so as to better understand the circumstances that the DWP Ministers should have a duty of care to support.

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Does my hon. Friend not think it absolutely shocking that if a terminal patient accrues debt, that passes on to their family? People should be defined by their medical definition and not the arbitrary six months that exists at the moment.

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My hon. Friend is absolutely right. Of course, she will know that a different system is being created for that in Scotland. I ask the Minister to look at the definition of terminal illness that has been adopted by the Scottish social security agency, which I think would help to deal with some of these problems.

Currently, deductions for indebtedness can be up to 40% of the standard allowance, and the Government are looking to reduce that to 30%. If we accept that the standard allowance is barely enough for anyone to live on in the first place—figures from the Joseph Rowntree Foundation show that adults without children on UC receive only 40% of the minimum income standard, while adults with children get just 60%—reducing that by a third is just going to exacerbate indebtedness. Most people would struggle if their income was reduced by a third without warning or negotiation, but I also acknowledge that there is a debt, so some effort must be made to repay it. There should be an affordability test and discussions in advance of a deduction being applied, and the recipient should be afforded expert advice and advocacy during that process. That surely has to happen if the DWP is going to give people help and breathing space for indebtedness.

As part of the summer pilot, the Government should consult extensively with key stakeholders, the devolved Governments and the expert charities, and those in receipt of universal credit themselves, particularly disabled people, to make sure that the system is got right and that no one is further impoverished as a result of universal credit.

Speakers from across the House have demonstrated in this debate, once again, that universal credit is still not working. It is time for the Government to listen, to restore and expand the funding available to universal credit and to fix the inbuilt technical issues and flaws that have been raised today and previously, which are contributing to a rise in food bank use and the impoverishment of those both in and out of work.

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I call Mike Amesbury.

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Thank you, Sir Henry; it is a pleasure to serve under your chairmanship.

[James Gray in the Chair]

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Well, it was—very briefly.

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Very briefly.

I thank my hon. Friend the Member for High Peak (Ruth George) for securing this vital debate on universal credit, and for all that she does. The debate’s importance has been powerfully illustrated by the presence of 26 Members in this Chamber.

As my hon. Friend rightly pointed out, universal credit was supposedly designed to be the flagship policy of a reformed welfare system that would protect the most vulnerable in our society, support people into work and act as a safety net for those who needed it most. However, as hon. Members’ speeches today have shown, the experience for hundreds of thousands of our constituents has been chaos and hardship, sometimes resulting in tragic circumstances.

What was once hailed as a simplified, holistic and supportive social security reform has become nothing more than a vehicle for cuts. The political choice of austerity has taken more than £37 billion from the welfare state, while giving more than £110 billion of tax cuts to the wealthiest individuals and rich corporations. While the Chancellor looks around and claims to be blind to the poverty that many of us witnessed as we walked into Westminster this morning, the record £1.6 million emergency food parcels that were given out last year alone and the 4.1 million children who are in poverty tell a different story—one that should shame every single one of us in this House.

Riverside, a major social housing provider nationally and in my constituency, has provided me with a case study that illustrates the systemic failure of universal credit on the frontline. The couple involved, who do not wish to give their names because of the sensitive circumstances, said:

“Me and my partner have had so much Universal Credit taken off us, that we are struggling to get gas, electric and food, on a monthly basis, we have tried weekly and that was even worse, the money that we are on makes having a home difficult…so we are having to visit the food bank more regularly.”

That is just one among many cases that have been highlighted in this Chamber today. The changes and cuts to the local housing allowance have helped to drive rent arrears up to alarming levels. According to Shelter, two in five renters in the private sector are having to borrow money. Minister, that needs to change.

It would be easy for the Government to try to dismiss such cases and statistics as cherry-picking from Opposition MPs; in fact, a previous Secretary of State referred to them as “fake news”. But what about the findings of the United Nations rapporteur on extreme poverty and human rights, who last month published his third and perhaps most damning view of the Government’s welfare policies, stating that our country’s poorest residents face lives that are “solitary, poor, nasty, brutish, and short”? What about the independent End Child Poverty coalition’s finding that child poverty is the “new normal” in some of the most deprived parts of Britain, with half a million more children living in poverty now than in 2010?

The Trussell Trust has found that when universal credit goes live in an area, food bank demand increases by a massive 52%. The trust’s figures show that a fifth of all referrals to food banks last year were linked to delays in receiving benefits, almost half of which related directly to universal credit. The Minister will claim that advance payments are available to universal credit claimants, so no one should go hungry for lack of cash. However, it has rightly been pointed out in this debate that those are loans that have to be paid back, which means debt on top of debt for the 60% of claimants who are forced down that route.

The five-week delay in payments must end. The system must be reformed. Will the Minister listen to the plethora of organisations that hon. Members have cited today, such as Shelter, Mind, the Child Poverty Action Group and the Riverside housing association? The monthly payments design of universal credit does not reflect the reality of many people’s lives or how they manage their money. A Resolution Foundation study found that most people moving from employment were paid either fortnightly or weekly in their previous job. The research highlighted the fact that people who claim universal credit are often not made aware of alternative payment arrangements to help people who are struggling to manage their own money, and do not always receive them when they apply.

In January, the Secretary of State announced her intention to improve the provision of alternative payment arrangements, make it easier for private renters to have payments made directly to landlords, and test ways to make more frequent payments to more people who struggle with monthly budgeting. Will the Minister tell us what progress has been made on that?

As we have heard today, it is not just advance payments that can lead to deductions from universal credit, but other bills too. Indeed, up to 40% of the universal credit monthly standard allowance can currently be deducted for repayment of advances, utility bill debts and rent and council tax arrears. More than half of universal credit claims had a deduction; as my hon. Friend the Member for High Peak pointed out, that is 844,000 people. What assessment has the Minister made of the impact of debt repayments on levels of hardship among universal credit claimants?

According to Citizens Advice, a single person over 25 who claims universal credit can see £127 deducted from their benefits every month to repay existing debts. If the Government are determined to help people to manage their debts, why is their own Department making deductions that often push claimants into hardship?

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My hon. Friend makes an incredibly important point. In a recent roving surgery, I visited a constituent who was suffering so much with mental health problems that he was unable even to face opening the letters that he received. He therefore did not receive the information about his situation and was subject to severe sanctions and reductions. He could have challenged them because of his situation, but the DWP was unable even to engage with him to assess the risk that he faced. As a result, he was suicidal. It is absolutely shocking what is going on.

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My hon. Friend makes a very powerful contribution that shows the need for more compassion and flexibility in the system. It is clear from the evidence and from this debate that initial decisions to apply deductions follow rigid rules and rates and do not include an affordability test. Will the Minister introduce an affordability test for deductions, particularly multiple deductions, to ensure that nobody is pushed into poverty or destitution?

The Government’s stock response to criticism of their welfare policies is to deny that there is even a problem, but their talk of a jobs miracle is nothing more than a mirage to many people who struggle on zero-hours contracts or in low-paid and part-time employment, with wages not even at 2008 levels. The same attitude is on display again in the new “Universal credit uncovered” propaganda campaign, with newspaper ads—seemingly designed to look like journalism—that aim to explode what are perceived to be media myths about universal credit and set the record straight, as my hon. Friend the Member for Easington (Grahame Morris) pointed out. It is perhaps telling that one charity has already reported the campaign to the Advertising Standards Authority. As we have heard today, these are not myths. They are facts, which illustrate a social security system that is failing—a system hollowed out by cruel cuts.

In conclusion, I call on the Minister to halt managed migration in its entirety, end the five-week wait, stop punitive sanctions, introduce split payments, restore the local housing allowance to at least the bottom 30th percentile, pay 85% of childcare support up front, stop the benefits freeze and the immoral two-child limit, and properly fund a compassionate social security system.

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It is a pleasure to serve under your chairmanship, Mr Gray, in this very important debate secured by the hon. Member for High Peak (Ruth George). Whatever our political differences, I am happy to acknowledge that she and indeed all the hon. Members who have spoken care very deeply about their constituents. I want to be clear that I want to ensure that every single person who is claiming universal credit gets the support that they absolutely deserve.

Let me start by setting out where we are with universal credit. Last year, universal credit completed its roll-out to all jobcentres across the country. We now have just under 2 million people claiming this benefit, and all new entrants to the benefits system now claim universal credit.

I entirely agree that we must ensure that we provide support through the welfare system to the most vulnerable. I am pleased that colleagues from all parties, including the hon. Member for High Peak, have acknowledged that changes have been made. My hon. Friends the Members for Waveney (Peter Aldous), and for Gloucester (Richard Graham), talked about the fabulous work being done by work coaches in our jobcentres.

As colleagues will know, in the last two Budgets, we announced changes to universal credit worth an additional £6 billion. I do not like to introduce rancour into this type of debate, and I am always open to discussion, but I gently point out that on those occasions, Opposition Members did not vote to support that extra money going into the system.

In the 2017 Budget, we announced a two-week run-on for those on housing benefit, the removal of the seven-day waiting period, and the ability for a claimant to get up to 100% of their estimated first-period payment as an advance, on the same day if needed. In last year’s Budget, among other measures, we announced increases to work allowances worth £1.7 billion a year. Colleagues touched on the additional run-on; from July 2020, there will be a two-week run-on of Department for Work and Pensions out-of-work legacy benefits for existing claimants who are being moved on to universal credit.

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The Minister lists the changes that have been made of late; does he acknowledge that none of them make up for the cuts made in the 2015 Budget?

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The hon. Gentleman will know that we inherited dire financial circumstances from the Opposition—I know that colleagues will not be happy at my mentioning that—and that is why we had to make difficult decisions. However, if Labour Members want more money introduced, then when that money is made available in Budgets, they should support those Budgets.

I will go back to the point about payments, including advance payments. I highlight that advances are interest-free.

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I am sorry that the hon. Lady is unhappy, but that is a statement of fact.

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They are still loans.

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Also, individuals will receive that money as an advance to their universal credit payment, so they will receive 13 payments over a 12-month period. I make it absolutely clear once again that, as I hope colleagues will acknowledge, these are interest-free advances. Of course, from October this year, the Government will reduce the maximum rate—

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Will the Minister give way?

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I will not, as there is quite a lot to get through.

From this October, the Government will reduce the maximum rate at which deductions can be made from a universal credit award from 40% to 30% of the standard allowance. By the end of 2019-20, it is forecast that around 290,000 universal credit households will have had deductions reduced, by an average of £295 over the year. It is already possible to extend the period over which advances are repaid to 15 months in certain circumstances, and of course, as Members have acknowledged, from October 2021, the maximum period will be extended to 16 months for all claimants.

One issue not touched on in the debate was payment timeliness, but it is worth pointing out that it has been raised in previous debates, certainly during my time as a Minister. Payment timeliness has improved significantly. We now pay around 85% of new claimants of universal credit in full on time. In addition, 95% of claimants are paid in full within five weeks of their payment due date. If there are delays in making the first payment, that can be due to outstanding verification issues, such as the need to provide bank statements or proof of rent. It can also be due to a claimant not signing their claimant commitment. For ongoing claims, payment timeliness is around 98%.

The shadow Minister, the hon. Member for Weaver Vale (Mike Amesbury), raised the issue of employment. The whole point of simplifying the welfare system is to remove the cliff edges and the disincentives to take on work and extra hours that existed under the legacy benefit system. We now offer claimants one-to-one support to help them to move into work.

I hope that colleagues will acknowledge that we are seeing record rates of unemployment, month after month. The shadow Minister talked about zero-hours contracts, but he will know that less than 3% of people in employment in the UK are on zero-hours contracts. That figure has fallen this year. Indeed, those on zero-hours contracts are doing about 24 hours of work a week on average.

We have recognised that we need to provide a consistently high level of support to those who may have difficulties in making a universal credit claim. That is why we announced our partnership with Citizens Advice and Citizens Advice Scotland, which are now funded to provide the “help to claim” service for claimants.

In the past, a number of colleagues have spoken about debt advice. They will know that debt advice is now fully funded by the financial services levy, and that service delivery is commissioned by the Money and Pensions Service, which was launched in January this year. In 2019-20, MaPS will provide around 560,000 sessions of debt advice in England. It is also worth noting that in addition to the funding that Citizens Advice receives for the “help to claim” service, it will, like other organisations, receive additional funding from MaPS to provide debt advice.

A number of colleagues raised the issue of rent arrears. I point out that a report published in July 2018 by the National Federation of ALMOs, or arms-length management organisations, showed that over three quarters of their tenants who had started claiming universal credit were already behind with their rent prior to commencing their claim. Also, research that we have carried out shows that the proportion of universal credit claimants who were in arrears at the start of their claim fell by a third after four months. In the universal credit full service claimant survey, which was published by the DWP in June 2018, 84% of claimants said that they felt confident about managing and paying their housing costs.

My hon. Friend the Member for Gloucester raised the issue of rent arrears and asked what further work were doing on it. I can confirm that we are carrying out further analysis with a number of housing providers to investigate and understand the true level of rent arrears among their tenants, and what is causing those arrears. Of course, when we have that information, we will publish it.

A number of colleagues raised the issue of tax credit debt. Her Majesty’s Revenue and Customs already seeks to recover overpayments of tax credit debts. When a claimant moves on to universal credit, any outstanding debt is transferred to the DWP for recovery. This does not include debt that is subject to ongoing disputes or appeals, and HMRC tells the claimant the amount of debt that is being transferred to the DWP for recovery. HMRC and the DWP continue to work closely to improve the claimant journey. This includes having a joint inquiry team to handle any issues that tax credit customers might experience during their move to universal credit. Of course, if claimants are struggling with the rate of repayment applied, they can ask the Department to review that rate.

A large number of points were made during the debate, so I say to hon. Members that if they want to meet me separately to discuss any points in more detail, I am very happy to do that, or they can write to me. However, in the remaining couple of minutes that I have, I will try to cover off some of the points made in the debate.

On the discussion about poverty, I point out that income inequality and absolute poverty are lower now than in 2010, and indeed the number of children—

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Will the Minister give way?

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I will not, because I literally have just a couple of minutes left. As I was saying, the number of children in workless households in the UK is down by 665,000 since 2010.

There was a discussion about homelessness. Since 2011, the Government have provided local authorities with about £1 billion in discretionary housing payments to protect the most vulnerable claimants. The hon. Member for High Peak raised the issue of how people know what deductions are being applied to them; that is shown in their statement, separately from the journal, and is available online. She also raised a point about deductions. I point out that if a claimant is subject to deductions to repay an overpayment, and those deductions are causing financial hardship, they can request a review of that rate by contacting the Department. Claimants have had their repayment rate lowered, temporarily suspended, or indeed both.

A number of colleagues also asked why we were not able to bring forward the 30% deduction rate on the standard allowance. The delivery date was chosen to achieve the best balance between continually improving universal credit in order to respond to claimant needs, and ensuring that the service is technically and operationally scalable as the volume of universal credit continue to rise. The hon. Member for Makerfield (Yvonne Fovargue) raised an issue about the breathing space scheme; the Department is supportive of that scheme, and officials are reviewing it to see how it could be applied to DWP debts. I would be very happy to sit down and talk with her further when more information is available.

A number of colleagues, including the shadow Minister, raised the issue of the Metro campaign. The whole point of the “Universal Credit Uncovered” campaign is to tackle common myths about universal credit. The Department has consulted the Advertising Standards Authority, and our adverts reflect its advice. To those Members who talked about the amount of money being spent on this campaign, I advise them that it is certainly not £23 million.

The issue of split payments was raised by my hon. Friend the Member for Waveney; as he knows, those are already available. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) raised the issue of Highland Council. He and I have met a number of times about this issue, and as he will know, my officials continue to engage with Highland Council about that point. Finally, the Scottish Government have themselves cut funding for Highland Council.

In conclusion, we are making changes that are benefiting claimants, but I am always happy to talk to colleagues about how we can do better.

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I called on the Minister to bring forward some of the changes. I do not know whether he understood the waffle that his Department gave him to explain why that will not happen, but I would be very grateful to hear his proper explanation for it.

I thank everyone who has contributed, and the organisations for all their research and briefing. To anyone who is watching who is suffering under universal credit and the deductions that are being made, I say this: get advice, challenge those deductions, and come and see your MP about them. Let us get them sorted.

Motion lapsed (Standing Order No. 10 (6)).