Extract from PMQs: Universal Credit - Oct 11

The roll-out of universal credit is already causing debt, poverty and homelessness. Does the Prime Minister accept that it would be irresponsible to press on regardless?

Of course we offer our condolences to Rodney Bickerstaffe’s friends and family on his death. He and I would probably never have agreed on very much in politics, but obviously he played his role with commitment and dedication through his life. 

The right hon. Gentleman asks about universal credit. It is perhaps worth our recognising why we brought in universal credit in the first place. What we want is a welfare system that provides a safety net for those who need it, and that helps people to get into the workplace, earn more and provide for their families. The system that we inherited from Labour did not do that. It was far too complicated, there were far too many different sorts of payment and, crucially, too many of those who earned more found themselves with less money in their pockets. Under Labour, too many people were better off on benefits. That is not the system that we want. We want universal credit, which is simpler and more straightforward, and makes sure that work always pays.

I wonder which planet the Prime Minister is on. Citizens Advice describes universal credit as 

“a disaster waiting to happen”. 

It has made that conclusion based on its work assisting tens of thousands of claimants with debt. Housing associations report an increase of up to 50% in the eviction of tenants in rent arrears due to universal credit. Can the Prime Minister and Department for Work and Pensions not wake up to reality and halt this process?

As I have explained, we have very good reasons for changing the system. Yes, the DWP has been—[Interruption.] We have been listening to concerns raised about the way in which universal credit has operated. Changes have been made; performance has improved, for example. At the beginning of this year, only 55% of people were getting their first payment on time. Now that is more than 80%. Of course there is more for us to do, and that is why the Secretary of State and the Department for Work and Pensions continue to monitor this and to ensure that performance increases. Underlying this is a need to ensure that we have a system that ensures that work pays and that people are not better off on benefits.

The Halton Housing Trust reports a 100% year-on-year increase in the number of evictions. Half of all council tenants on universal credit are at least a month in arrears in their rent. This weekend, the former Prime Minister, Sir John Major, described universal credit as 

“operationally messy, socially unfair and unforgiving.” 

He is right, isn’t he? It is years behind schedule. It is forcing people to food banks, driving up evictions and leaving families in debt. Can the Prime Minister not see it? If the former Prime Minister can understand it, why can’t this one?

In fact, research shows that after four months the number of people on universal credit in rent arrears had fallen by a third. As I said in my previous answer to the right hon. Gentleman, of course we recognise that there have been some issues to address in the rolling out of this benefit, and that is why we have been taking our time doing it. The underlying reason for moving to universal credit is still the right one. We see more people getting into work on universal credit than on jobseeker’s allowance, and there is the possibility for those people who cannot wait for their first payment to ask for an advance if they are in need, and the number of people getting an advance has increased.

At last the Prime Minister recognises that there are problems. The Institute for Public Policy Research and the Child Poverty Action Group estimate that universal credit is going to put another 200,000 children into poverty. Last month, apparently, a dozen Conservative MPs wrote to the Work and Pensions Secretary calling for a pause. Perhaps they should have listened to people like Georgina, who contacted me this week. She says:

“All summer we were left with no money to survive as it just stopped abruptly. We would have lost everything if it weren’t for my family.”

Others cannot rely on family and are facing eviction. I urge the Prime Minister: show some leadership, pause universal credit, and stop driving up poverty, debt and homelessness, because that is what this does.

First, may I say to the right hon. Gentleman that I would be happy to look at the case of Georgina if he would like to send me those details?

As I have just said—once again, I referred to this in my previous answer, had the right hon. Gentleman listened to it—it is possible for those who are in need to get advance payments. The number of those getting advance payments has increased from 35% to just over 50%—the majority. So we are seeing the system being improved and performance improving. But let us just think about the Labour party’s record on this whole issue of welfare. Under the Labour party, 1.4 million people spent most of the last decade trapped on out-of-work benefits. Under the Labour party, the number of households where no—[Interruption.]

Order. The Prime Minister’s response must be heard.

Under the Labour Government, the number of households in which no member had ever worked nearly doubled. The welfare bill went up by 60% in real terms, which cost every household an extra £3,000 a year. That is not the way to run a system; that is the way to have a system that is failing ordinary working people.

The last Labour Government lifted a million children out of poverty. Gloucester City Homes has evicted one in eight of all of its tenants because of universal credit. The Prime Minister talks about helping the poorest, but the reality is a very, very different story. Not only are people being driven into poverty but, absurdly, the universal credit helpline costs claimants 55p per minute for the privilege of trying to get someone to help them claim what they believe they are entitled to. Will the Prime Minister today show some humanity, intervene and make at least the helpline free?

I have made it very clear that we continue to look at how we are dealing with this and ensuring that we get this system out in a way that is actually working for people. The performance is increasing, and it is working because more people are getting into work on universal credit than were doing so on jobseeker’s allowance. [Interruption.] I do want people to be able to find work. I want people to be able to get better jobs, to earn more and to get on without Government support. That is why it is so important that we help businesses to create jobs. Perhaps when the right hon. Gentleman stands up he would like to welcome the fact that 3 million more jobs have been created due to a strong economy under a Conservative Government.

Sadly, universal credit is only one of a string of failures of this Government. Everywhere we look we see a Government in chaos. On the most important issues facing this country it is a shambles: Brexit negotiations that have made no progress; Bombardier and other workers facing redundancy; most working people worse off; young people pushed into record levels of debt; 1 million elderly people not getting essential care; and our NHS at breaking point. This Government are more interested in fighting among themselves than in solving these problems. Is it not the case that if the Prime Minister cannot lead, she should leave?

Let me tell the right hon. Gentleman what the record of this Government is: the deficit is down by more than two thirds; 3 million more people are in jobs; 1.8 million more children are in good or outstanding schools; more people are visiting A&E; more people are getting operations than ever before; there are record levels of funding into the NHS; and there are record levels of funding into our schools. What did we see about the Labour party from its conference? [Interruption.] Wait for it.

Order. Members are becoming very overexcited. The Prime Minister’s response will be heard.

What did we hear from Labour’s conference? What happened at Labour’s conference? First, Shelter said that the Labour party’s housing policy would end up harming people on low incomes; Labour’s flagship Haringey Council rejected another of Labour’s policies; the Equality and Human Rights Commission said that Labour

“needs to…establish that it is not a racist party”;

and the Labour leader of Brighton Council threatened to ban Labour conferences because of freely expressed anti-Semitism. That was all before the shadow Chancellor admitted that a Labour Government would bring a run on the pound and ordinary working people would pay the price. [Hon. Members: “More!”]

Q3. I fear that that “more” was not for me. I am afraid I must return to the subject of universal credit, but perhaps the difference between Government Members and Opposition Members is that we believe in universal credit’s transformative properties and want it to work. And work it will, but we have to get it right. I thank the Secretary of State for Work and Pensions for promising on Monday to advertise more widely that advances are available to claimants, but many of us on the Government Benches feel that more people taking up those advances must surely mean that the in-built six-week wait just does not work. Will the Prime Minister please consider meeting me so that I can explain to her why, if we reduce that six-week wait, we will do a better job of supporting those just about managing families who are struggling to make ends meet and who have no savings to cover them over that period? [900924]

My hon. Friend makes the important point about the fundamental benefits of universal credit, but she is of course right, and that is why the DWP is continuing to look at the performance of universal credit and how it is operating. I am happy to meet her to look into the issue. She mentioned the advance payments; as she said, it is important that those who need those payments are aware of them, so it is about not only advertising but making sure that jobcentre staff are trained and are being retrained to ensure that they are aware of what they can do to help people. The advance payments can be with people within five days or, in an emergency, on the very same day. I am happy to meet my hon. Friend to discuss them.