Universal Credit Project Assessment Reviews

Catherine McKinnell Excerpts

Tuesday 5th December 2017 Commons Chamber

[Heidi Allen]

We have a job to do. I am sure the Select Committee’s evidence-gathering helped the Government to identify improvements and make universal credit better. We will continue that work.

No one should underestimate the poverty-fighting potential of universal credit. I believe that and mean that most sincerely. There is a reason why work coaches are so motivated by it. There is a reason why, when claimants are fully up and running on it, they move into work faster and stay in work for longer. That does happen. The old system of multiple individual benefits was no better than a game of roulette. What kind of reward was it when a determined claimant successfully gained more hours of work only to lose their benefits? On their way up, they were stopped in their tracks by a benefit trap set at an arbitrary and life-limiting 16 hours. No one should be proud of that and no one should want to sustain that.

Universal credit is totally different. It offers a wraparound support service to claimants. I am the first to admit that the roll-out has had more issues than it should have had. There are aspects of the system I wish had been fixed before we pushed the button to roll it out further. I understand, however, why the Government were reluctant to pause it. They were eager to offer that transformative support and its potential for a better future to more claimants. That is what the Government wish to do. I was pleased, therefore, when the Chancellor announced in the Budget a package of reforms worth £1.5 billion. Reducing the six-week wait, specifically asked for by the Work and Pensions Committee, was critical. I understand that banking system limitations meant that reducing the wait even further beyond five weeks was technically impossible, but the Prime Minister, the Secretary of State and the Minister for Employment listened to our concerns regarding the risk of rent arrears and debt, which were real, and then made further—I believe arguably greater—concessions than taking an additional one-week delay away. They increased availability and doubled to 100% the size of advance payments, so that emergency funds would be available to claimants on day one. The payback period was also doubled to 12 months. This means that no claimant will be without money if they need it. No ifs, no buts—fact. If someone needs an advance today, they get it.

The most welcome addition, for me at least, was the automatic additional payment of two more weeks of housing benefit for all claimants currently in receipt. That is huge! That is an additional two weeks of housing money on top of universal credit monthly payment. This is the good that the Government can do. These are the actions of the Government I envisaged when I first heard Theresa May on the steps of No. 10.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I thank the hon. Lady for giving way and for her compassion for the misery that I know many of my constituents have faced as universal credit has been rolled out in Newcastle. I have spoken about that many times, but does she share my concern that the announcements in the Budget will do nothing for those families who have already been pushed into misery, debt, the use of food banks and, potentially, the loss of their house? Does she want the Government to use that ability to support those families, too?

[Heidi Allen]

No family should be going through that. People have more difficult lives than I am blessed to have ever experienced, but work coaches are there, and discretionary housing payments and advance payments are there. Work coaches should be offering a wraparound service. I do not have universal credit yet in my area, but I hope that work coaches are doing everything they should for the hon. Lady’s constituents. There is no reason for a family to be put into that level of debt. If that is the case, the work coach is not doing what they should.

Universal Credit is the biggest transformation of our benefit system in decades. The Government’s slow roll-out and test and learn approach is the right one. They have been able to make amendments because of this approach, meaning the improvements announced in the Budget will be in place before a significant uplift in claimants moving on to the benefit. As we have heard today, that is so important because these are real people’s lives.

Jobcentres have received absolute clarity on making advance payments available to all claimants. I know this to be true, because I heard it first-hand recently at a regional work coach event in the east of England. I am greatly relieved by these operational improvements and relieved to know the Government will keep the taper rate under review. I understand the challenges to our public finances, but I remain of the opinion that universal credit will never be the ultimate poverty-fighting machine it can be and was designed to be until either the taper rate or work allowances are restored to their pre-2015 levels. As inflation shows signs of volatility, I support the Government completely as they keep a watchful eye on the taper rate.

If universal credit does not deliver the transformative results it should, we will look at it again. Universal credit is both revolution and evolution. The Work and Pensions Select Committee, on which I am proud to sit, will continue to monitor progress every step of the way. I thank the Government for offering to share these reports. They are project management assessment documents, not policy assessment documents, so their value might be limited—I do not know, we will see—but as a member of the Committee, I welcome the opportunity to review them. They will form part of the Committee’s ongoing and dedicated review of the project’s progress.