Statement (Commons) on Universal Credit: Managed Migration - Jul 22

The Secretary of State for Work and Pensions (Amber Rudd)

At the core of my Department is the desire to deliver a considered and considerate welfare system that incentivises work. Universal credit has been rolled out nationally, and there are now more than 2 million claimants. We continue to listen to claimants, stakeholders and Members of Parliament in order to improve the system. In short, we examine what works, and act accordingly. That is why one of my first acts as Secretary of State was to announce legislation for a small pilot to move existing welfare claimants on to universal credit. Managed migration involves moving claimants who are still on legacy benefits, and whose circumstances have not changed, across to universal credit. The pilot will give colleagues and claimants confidence in the Department’s approach to the transition before we return to the House to report on progress and seek permission to extend managed migration.

Today I am laying regulations to commence the pilot, for no more than 10,000 claimants, which will start this month as promised. We will begin with one site—in Harrogate, as previously announced—to ensure that people’s transition is carefully supported. There is a possibility that the pilot will be extended to further sites as it progresses. We will be able to learn from putting processes into practice, and to adapt our approach accordingly.

The Department will continue to work closely with expert stakeholders to ensure that the pilot supports the most vulnerable and hard-to-reach claimants. Claimants who are moved to universal credit will be eligible for transitional financial protection to safeguard their legacy entitlement. They will also have access to additional financial support before they receive their first universal credit payment, including the two-week run-on of housing benefit and the discretionary hardship payment, as well as advances.

Let me reiterate that the Department does not intend to stop the benefits of anyone who participates in the pilot. Instead, we will be testing how we can encourage and support those who move over to universal credit, without halting their benefits. This listen-and-adapt, evidence-based approach is the right way in which to deliver universal credit.

We have also revised our approach to claimants who are entitled to the severe disability premium. The regulations that I am laying today will enable us to begin to provide support for claimants who were entitled to the premium and have already moved to universal credit. From 24 July 2019, those claimants will be considered for backdated payments covering the time that has elapsed since their move. They will also gain access to ongoing transitional payments that reflect the severe disability premium to which they were previously entitled. We have reviewed the rates of those payments to enable the most vulnerable to receive increased support. Claimants will now receive payments of up to £405 per month alongside their universal credit awards, increased from the previous proposed maximum of £360. We estimate that by 2024-25, approximately 45,000 of the most vulnerable claimants will benefit from this package of support, worth an estimated £600 million over the next six years. My Department will begin the process on Wednesday, ensuring that claimants are paid at the earliest opportunity.

Following the High Court judgment on the severe disability premium, the regulations will also—in 2021—bring an end to the barrier that currently prevents its recipients from moving to universal credit as a result of a change of circumstances. Until 2021, anyone who currently receives the premium and whose circumstances change will continue to be held on legacy benefits, as they are now. After 2021, the barrier will be removed. SDP claimants will move on to universal credit through natural migration, gaining access to the new payments that are available to those who have already moved over.

The Department will continue to follow this approach in the weeks and months to come, identifying areas for improvement and seeking new ways to give better support to claimants. In the months ahead, we will complete an evaluation of the effectiveness of universal credit sanctions in helping people into work in order to report to the Select Committee in the autumn. We will be evaluating the results of our pilots which explored the possibility of offering claimants more frequent benefit payments on demand. We will be launching a new service enabling private sector landlords to receive housing benefit rent payments directly from the Department, and continuing a proof of concept in south London to test a “written warning” sanctions model, according to which a sanction would not be applied on the first failure to attend an appointment.

I am determined—and I know the Department that I lead is determined—to ensure that universal credit is always a force for good.

6.47 pm

Lilian Greenwood (Nottingham South) (Lab)

I thank the Secretary of State for advance sight of her statement.

Universal credit was meant to simplify the social security system. In fact, it is deeply flawed, and has caused real hardship to so many people across our country.

In March, the Secretary of State shockingly announced her intention to pilot managed migration even before she had secured approval from Parliament. Now she has left it to the eleventh hour to bring these regulations to Parliament. Managed migration is deeply controversial. The Government’s original intention to send nearly 3 million people a letter saying that their benefit would stop on a particular day, and that they would have to apply for universal credit, shifted the responsibility for securing essential support for millions of people from the state to the claimant. In so doing, the Government would have risked catastrophic consequences for many of the most vulnerable in our society. Understandably, the plans were met with outrage from many sections of society: how could a Government visit such a plan on the people?

It really is important for these important regulations to be debated on the Floor of the House. The Government committed themselves to doing that on 8 January, when the Minister for Employment, the hon. Member for Reading West (Alok Sharma), said:

“We will…ensure that the start date for the July 2019 test phase…is voted on.”—[Official Report, 8 January 2019; Vol. 652, c. 175.]

Can the Secretary of State therefore guarantee today that the regulations will be debated in full, and voted on in the House? To do any less would be an absolute disgrace.

It is hardly surprising that universal credit is so controversial, given that it has caused so much misery. During the geographical roll-out, we have seen a sharp increase in the number of people going to food banks where it has been introduced. That is a source of shame for the Government. It cannot be right that in one of the richest countries in the world, children are going hungry and their parents are having to seek help from food charities.

In its report “The next stage of Universal Credit”, the Trussell Trust says:

“Benefit transitions, most likely due to people moving onto Universal Credit, are increasingly accounting for more referrals”

to food banks.

In a report published last month entitled “Universal Credit: What needs to change to reduce child poverty and make it fit for families?”, the Child Poverty Action Group says:

“The DWP stated in response to the Social Security Advisory Committee…report on managed migration that”

the Government

“would ‘explore options’ to remove the need for a new claim, so it is disappointing that the regulations put forward for the managed migration pilot do not allow for this by giving the department the power to create claims.”

So can the Secretary of State enlighten us: do the regulations she lays today address that?

The Child Poverty Action Group goes on to say:

“We understand that officials are reluctant to go down this route but we believe that their concerns are surmountable and do not justify the risks involved in the current proposed approach: that people will be given a deadline for claiming universal credit and will have their legacy benefits terminated if they do not manage to do so on time.”

The Secretary of State says in her statement that the Government do not intend to stop the benefits of anyone participating in the pilot; intentions are all very well, but the regulations we have seen thus far show Government giving themselves the power to do just that, so will she give a guarantee today that no one will have their benefits stopped?

The Secretary of State says that the Government have revised their approach to claimants entitled to severe disability premium, and that the regulations she is laying today will enable the Government to begin to provide support for claimants who are entitled to severe disability premium and have already moved to universal credit. These are severely disabled people who have had vital financial support cut by this Government, so why is it only now, after months on end, that the Government are going to begin to provide support? What thought has she given to the hardship her lack of action has caused? What assessment have the Government made of the hardship that severely disabled people may have been suffering because of their loss of income? What assessment have the Government made of the impact on the children of the severely disabled who may be asked to take on additional caring responsibilities because of their family’s loss of income? And what would the Secretary of State say to the Disability Benefits Consortium, who wrote this month that

“Many disabled people have not yet felt the full extent of the cuts made to welfare benefits, as many have not yet moved on to Universal Credit. When that happens, there will be dramatic increases in the levels of poverty among people who are already at crisis point. It is a disaster waiting to happen”?

The role of any pilot is to justify the whole, yet we know the flaws in universal credit are causing real hardship; the five-week wait and the insistence on making and managing a claim online build in disadvantage to the millions who are deeply disadvantaged already through low literacy levels or lack of access to IT. I note the Secretary of State’s comments on support during the pilot, but that will do nothing to help subsequent claimants. There is also the requirement of monthly assessment periods for the self-employed while their tax assessment period is annual, creating additional expense and administrative costs for that group. The abject failure of the Government to address the issue of irregular payments remains unaddressed too, and the stories of people having all their benefits stopped because they are paid twice in one month through no fault of their own are going unheard. The two-child limit is penalising families despite the horrific child poverty statistics, with over 4 million children going without sufficient food, shoes that fit and the security of knowing their families have enough. It is vital that these regulations are debated on the Floor of the House so that all of these issues can be addressed.

Amber Rudd

The hon. Lady is determined to demonise what is a very sensible approach to trying to ensure that universal credit delivers what it is intended to deliver. She has given us a catalogue, as always, of the things that she disapproves of, but let me just highlight the things that are relevant, perhaps, to what we are discussing today.

On the one hand the hon. Lady criticises me for, as she puts it, coming out at the last minute and on the other hand she asks why this has not been done before. The hon. Lady cannot have it both ways: we are determined to get on with this, which is why I am here today, and which is why I am sticking to what I said we would do, which is to make sure that we come back to the House before the managed migration pilot begins.

Getting support for this measure is incredibly important, which is why we are proceeding by negative resolution. We are doing that—to answer one of the hon. Lady’s questions—because that was the advice we received from the Joint Committee on Statutory Instruments. The benefit of that, which I hope the hon. Lady will agree with, is that we can begin making the payments as soon as possible. She asked why we have not got on with making the payments; on the basis of what we are doing today, we will be able to get on and start that on Wednesday.

The hon. Lady asks particularly about how we will ensure that nobody actually loses their benefits. As I said in my statement, I am absolutely committed to ensuring that the managed migration is handled in such a way that nobody loses their benefits. The numbers that we are dealing with in Harrogate and the support that we are getting from the jobcentre and, happily, from the Member of Parliament my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who is present, will make a huge difference to ensuring that every single person has that positive experience.

I know that somebody—hopefully me—will have the opportunity to come back next year and report on the outcome from this managed migration pilot. Getting it right and engaging with stakeholders and making a success of it is going to be absolutely crucial to continuing to build on the success of universal credit.

Sir John Hayes (South Holland and The Deepings) (Con)

CS Lewis said:

“We are what we believe we are,”

and I believe that a civilised society is coloured, crafted, characterised by how it treats its most vulnerable citizens. To that end, I welcome the Secretary of State’s commitment that claimants moving through the process will receive transitional protection and protect their income as they move. However, Mr Speaker, you will know as a constituency MP, as we all do, that the assessment of need is of critical importance and that too often in analysing need the system has been cruel in its crudity and callous in the criteria being applied to that assessment, from being rigid and insensitive to dynamic conditions, particularly degenerative ones. So will the Secretary of State during this process agree to review the means by which needs are assessed, to ensure they are fit for purpose?

Amber Rudd

I thank my right hon. Friend for his question and his continued interest in ensuring that the poorest in our society and in his constituency are well looked after. The purpose of the managed migration pilot is to make sure that we get it right; constantly engaging with stakeholders will be part of that, and of course we will take any learnings from that.

Chris Stephens (Glasgow South West) (SNP)

I thank the Secretary of State for advance sight of her statement, although it is staggering that the Department for Work and Pensions is pushing out regulations days before recess. Although it is correct that the back-payments are being issued—Members across the House, including on the SNP Benches, have been calling for that—hearing about them 48 hours before the change takes place is, frankly, disrespectful to the House and outrageous.

I have a number of questions. Can the Secretary of State confirm that the Government are formally accepting the decision of the High Court? That leads to the next question, which is about the £405 a month. Will the Secretary of State publish how that figure has been calculated, to give us all an opportunity to see that the Government are complying with the High Court decision? The Secretary of State has confirmed that these regulations will be laid by the negative resolution procedure; however, her predecessor had committed to allowing the House to debate the new regulations. Why is the House not being given the opportunity to debate them? Finally, can she confirm that the Social Security Advisory Committee has been consulted on these new regulations?

Amber Rudd

To address the final question first, yes the SSAC has been consulted. On how the amounts have been arrived at, that is broadly in line with what the tribunal has recommended, but I will take the opportunity, if I may, to write to the hon. Gentleman so that he can see the set-up for himself. He asked about the previous Secretary of State and her commitments: the commitment that we are delivering on today is to respond to the requirement to lay the legislation and for me, the Secretary State, to come to the House and set out why we are doing it. The advice that we have received is to use the negative resolution procedure, because things have been changed since the former Secretary of State laid the original legislation, but I acknowledge that to move in future from the pilot to the full managed migration is likely to need much fuller debate.

Sir Nicholas Soames (Mid Sussex) (Con)

In contrast to the utterly absurd and over-the-top response of the hon. Member for Wirral West (Margaret Greenwood), may I warmly congratulate my right hon. Friend on the humane and enlightened way in which she is proceeding with these very important changes? Will she confirm that it includes the approach she is taking to the receipt of benefits by people who have terminal illnesses? Will the consultation she promised me and others only very recently—I am very grateful to her, as are my constituents, for her help—be concluded as soon as is conceivably possible, so that these kinds of inhumane mistakes are not made again?

Amber Rudd

I am grateful to my right hon. Friend for his comments and for his time in discussing with me a constituency issue that contributed to my responding in an accelerated way to the plans I was already formulating for looking again at how we support people with terminal illness diagnosis. Yes, I will continue to proceed with that at pace, because I am very conscious that the people who have that sort of diagnosis need as much support as possible, as soon as possible.

Frank Field (Birkenhead) (Ind)

I thank the Secretary of State for her statement, but may I please ask why it has taken over a year to get to this position, and only then with the help of a High Court action that her Department lost? How many other actions does she expect to have in this area of her administration, and will she now publish the criteria by which she will judge whether the pilot is a success, before the pilot is completed?

Amber Rudd

I thank the right hon. Gentleman for his questions. I am aware that there is, quite rightly, a lot of interest in how we will assess the pilot, and I have been looking at that myself. Ultimately, the pilot will be a success if we get as many people as we expect across from the legacy benefits to universal credit as effectively and efficiently as possible. I want to ensure that we give them the right support, and that they have an effective transfer. The process we have at the moment will be based on “Who knows who?”—“Who knows me?” will be the theme—so we are engaging with organisations and individuals to ensure that they get the right support. I have already requested my Department to look at the suggestions that the right hon. Gentleman kindly made last week about finding out which organisation might support which individual and who those individuals receiving notice to move might trust and prefer to engage with. I will be taking that forward as well.

Jeremy Lefroy (Stafford) (Con)

I am grateful to my right hon. Friend for her statement. Has she been able to look at the five-week delay for new universal credit claimants to see whether it can be reduced? A lot of us on both sides of the House feel that it could be reduced to much less than five weeks.

Amber Rudd

I know that my hon. Friend has raised this on several occasions, and he will be aware that the Department has already made changes that will affect the run-on of housing benefit and additional legacy benefits by the end of next year. I will always look at finding ways to get those essential funds to the people who really need them as early as possible.

Debbie Abrahams (Oldham East and Saddleworth) (Lab)

I have just attended the oral session for an inquiry looking at the health impacts of the Welfare Reform Act 2012, in which it was revealed that 240 children a year die as a direct consequence of being pushed into poverty and, ultimately, because of the cuts in social security support. Will the Secretary of State look into the harms to and deaths of not just children but disabled people as a consequence of the policies she is introducing?

Amber Rudd

I will always look at evidence, and if the hon. Lady wants to show me any of the evidence she has been on the receiving end of, I would be happy to look at it. I point out to her, as I have done previously, that overall we will be spending more money under the universal credit system by 2023-24 than would have been spent under the previous system, so I am not entirely in agreement with the conclusions she draws, but we will always take an open mind to the facts that she presents.

Mr Speaker

I am very glad that the right hon. Member for South Holland and The Deepings (Sir John Hayes) has reconsidered his decision to beetle—or, in his case, perhaps to stroll—out of the Chamber, because I note that even as we deliberate on the most serious and solemn matters, not only has he been seated like a dignified Buddha but he has demonstrated that his penchant for alliteration never ceases.

Carolyn Harris (Swansea East) (Lab)

Individuals with a disability premium on their employment and support allowance are still eligible for housing benefit because universal credit does not cater for cases that are out of the ordinary—for example, those receiving recovery services. Since migration, however, many people are not receiving payments because local authorities are not providing the correct information or recognising the special circumstances of such claims. Can the Minister advise what, if any, training is planned for local authority staff, to ensure that they give accurate advice and subsequently provide appropriate and proper payments?

Amber Rudd

I thank the hon. Lady for raising this. I am determined to ensure that local authorities are correctly informed so that they can support not only the managed migration pilot but managed migration overall. That is one of the things we hope to learn from the Harrogate pilots. We will be giving them a small amount of extra support to ensure that we can learn properly from the jobcentre. Perhaps that will be one of the things we will look out for.

Alison Thewliss (Glasgow Central) (SNP)

The Secretary of State should be aware that one of the canaries in the universal credit system is in the transition from live service to full service. One of my constituents was forced to make an entirely new claim, but errors were made. My constituent’s income was interrupted, split payments were cancelled and they had to explain the situation again and again to jobcentre staff. Reassessment on health grounds was proposed, despite my constituent having been granted a 24-month bye on the live service before the move to full service. How can my constituents have confidence in the Government when the system is so riddled with errors as it evidently is? Is it not the case that, for many people, the canary in the universal credit system is dead?

Amber Rudd

It is disappointing to hear from the hon. Lady that her constituent has had such a difficult time. I hope that we will be able to erase any errors that have taken place in the past and ensure that we have a seamless process in future. I would just tactfully point out to her that the system this replaces had many more problems. I would like this system to be perfect, and it is my aim to get it as close to that as possible. The previous system, which had six different benefits in three different places, was incredibly hard work and really cruel to some constituents, and I hope that most people appreciate that this system will be more effective and efficient.

Ruth George (High Peak) (Lab)

I welcome the Secretary of State’s announcement that the Department will not stop the benefits of anyone participating in the pilot, but has she calculated what resources the local jobcentre will need to ensure that this happens for the very vulnerable people involved? In Harrogate, 56% of the people involved were already on universal credit in February, and I understand that fewer than 2,000 are due to migrate using the process. That is far less than the rest of the country, where there is an average 27% roll-out. What resources are being put in place in Harrogate and in other places where the pilot will be rolled out, to ensure that the people are supported? Will the people who receive transitional protection for their severe disability premium see that protection eroded as universal credit progresses? Will the Secretary of State confirm whether they will receive any uplifts from universal credit if they are also on transitional protection? Will those people also suffer deductions from their universal credit, which will in many cases make people worse off? Will she bring forward the run-ons of legacy benefits from June next year as planned, to ensure that people who are transitioning to universal credit under the pilot can benefit from those run-ons?

Amber Rudd

The hon. Lady asks a lot of detailed questions, and I will do my best to answer them, but if I have not done so, I hope she will write to me so that I can complete my response. A discretionary hardship fund will be in place for the individuals who are being managed-migrated from legacy benefits to universal credit in Harrogate, which will be the equivalent of the legacy benefits being paid in addition that were going to be received next year, in June 2020, for people who are being moved from one benefit to the other. So the answer to her question is yes, but the type of payment will be under the umbrella of a discretionary hardship payment instead. She asked about the support that the jobcentre will get. We are working with it, and a dedicated team is working closely with my Department to ensure that there is true learning from the experience of moving people in this way. She asked specifically about Harrogate and why we were doing it there. The answer is that it already has a relatively high level of people on universal credit, but a significant number will still need to be transferred. I did say in my statement that it might not be the only location, and we are taking permission to do up to 10,000, so it may mean that, to complete that learning process, we do it elsewhere as well. We are keeping an open mind on that, because it is essential that this really covers the serious matters of getting it right, some of which have been raised in the House today.

Stephen Timms (East Ham) (Lab)

Will the Secretary of State use this pilot to review thoroughly the impact of the catastrophic five-week delay policy in universal credit? It is forcing people to use food banks, as the Trussell Trust reports; forcing people into debt to her Department, because they have to take out what she calls an advance but is, in fact, a loan; and, as we have discovered over the past two or three weeks, opening up a bonanza for crooks and fraudsters who dupe people into taking out unwanted advances and claiming universal credit. Will she do a thorough assessment of the impact of the five-week delay as part of the pilot’s evaluation?

Amber Rudd

The right hon. Gentleman is no doubt aware that, in addition to the advances, the housing benefit run-on and the legacy benefits run-on will come in next year, and they are effectively part of the transitional arrangements being offered to the pool of people who are having their migration managed. The right hon. Gentleman has raised this matter before. I have bent over backwards to ensure that we get funds to people as soon as possible, and former Secretaries of State have done the same, but I know that some people still have concerns about what more we can do to ensure that people on the lowest incomes are supported at the moment of difficulty when they move from one benefit to another. I will always take an open mind to looking what we can learn from that going forward.

Peter Grant (Glenrothes) (SNP)

I recently received confirmation that one of my constituents, with the support of my constituency office team, had been awarded more than £2,000 in benefits that had been wrongly withheld. While that was welcome—he certainly welcomed it—why should somebody have to go to the MP, and why should an MP’s staff spend days and days on an individual case just to get somebody the money that is theirs by right?

For 18 months, my constituents have been used as guinea pigs for a failed and failing system. During that time, rent arrears have increased, food bank usage has increased and personal debt has increased. One of the Secretary of State’s ministerial colleagues actually suggested that the reason for the increase in food bank use might be that everybody knows where the food bank is, but nobody can find the jobcentre. Glenrothes jobcentre is right next to the bus station, and someone cannot get a bus in or out of Glenrothes without going past the jobcentre. Does the Secretary of State believe her colleague that the increase in food bank use in my constituency is because a high-profile jobcentre has become invisible, or would it be more honest to say that food bank use is increasing because my constituents and many others are victims of a welfare system that is no longer fit for purpose?

Amber Rudd

I simply do not recognise the hon. Gentleman’s characterisation either of my ministerial colleagues or of the intention of universal credit. The hon. Gentleman describes his jobcentre in some detail, and I expect he knows some of the work coaches who do such a remarkably good job engaging with individuals and trying to help them into work. I ask him to remember that before he describes the system as not fit for purpose. The former system was not fit for purpose, with six different benefits from three different places and no personal interaction. Universal credit is much more positive for his constituents and for mine.

Alan Brown (Kilmarnock and Loudoun) (SNP)

Will the Secretary of State look at the system that encourages claimants to take out a new enterprise allowance to go into business, but one year down the line, when they might still be building up that business, the system assumes that they are earning a minimum amount? A Kilmarnock couple came to my surgery on Friday to say that they have been left with absolutely no income because their UC assessment has assumed a level of wages that they are not making. They are in hardship, and it is quite possible that businesses will fail as a consequence of this system. Does she agree that that is another example of why universal credit is not fit for purpose?

Amber Rudd

I want to take this opportunity to say that the new enterprise allowance has been a great success in supporting businesses, and I am pleased with how it has been picked up by MPs and constituents. As for the one-year policy that the hon. Gentleman referred to, we must ensure that we get the right balance between supporting enterprise and making sure that taxpayers are supporting businesses that have a strong future. If he feels so strongly about it, he will no doubt want to make a submission to the spending review at the end of the year, but I think that the balance is right at the moment. We have to think about whose money it is, how it spent and where work will be available to people.