Universal Credit

Kate Green Excerpts

Wednesday 6th March 2013 Commons Chamber

[Dame Anne Begg]

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

[Kate Green (Stretford and Urmston) (Lab)]

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

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[Nigel Mills]

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

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

[Kate Green]

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

[Nigel Mills]

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

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[Sheila Gilmore]

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

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

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

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

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

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

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

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

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

[Kate Green]

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

[Sheila Gilmore]

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

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

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

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

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[Mr Hoban]

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

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

[Kate Green]

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

[Mr Hoban]

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

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