Chris Stephens (Glasgow South West) (SNP) I beg to move, That this
House has considered the matter of Universal Credit deductions. It
is a pleasure to see you in the Chair, Dame Maria. This is a matter
of considerable interest and concern to me, as it will be to many
other Members, each of whom will have busy caseloads from worried
or despairing constituents, many of them describing how the
universal credit system has worked for them or, more to the point,
has...Request free trial
(Glasgow South West)
(SNP)
I beg to move,
That this House has considered the matter of Universal Credit
deductions.
It is a pleasure to see you in the Chair, Dame Maria. This is a
matter of considerable interest and concern to me, as it will be
to many other Members, each of whom will have busy caseloads from
worried or despairing constituents, many of them describing how
the universal credit system has worked for them or, more to the
point, has abjectly failed to work for them.
In March last year and earlier this month, I questioned the
Secretary of State on how many universal credit claims were
having deductions taken from them in the most recent month for
which data was available in each parliamentary constituency, what
was the average size of sums deducted in each constituency, what
was the total sum deducted from claims in each constituency, and
what proportion of each sum was deducted to repay advance
payments. The figures in the Scottish context were quite
revealing to me. For example, I learned that in one month alone
in 2021, 180,000 households in Scotland had an average of £60
deducted from their social security payments, and that between
December 2022 and February 2023, the UK Government deducted £12.1
million a month from 206,000 Scottish households. The number of
households affected by deductions and the sums being recouped
seem to be increasing.
Those figures were disturbing but maybe not surprising. After
all, last year the Work and Pensions Committee, of which I was
then a member, published a report on the cost of living, which
called on the Department for Work and Pensions to pause the
deductions and restore them gradually only as the rate of
inflation reduced, or when benefits had been increased to
accurately reflect the rise in prices. The Government rejected
the report’s recommendations, stating that pausing deductions is
not
“necessarily in the claimant’s best interest.”
But claimants know that since then, inflation has remained very
high, and the rise in the price of basic foodstuffs for the
poorer has been ferocious. It is time to take a broader look at
the problems with universal credit deductions. That is why I
secured this debate.
(Rutherglen and Hamilton
West) (Ind)
I cannot tell my hon. Friend how many times a constituent has
contacted me to tell me that, as a result of the universal credit
calculation and payment cycle and the fact that their employment
paydays are not exactly a month apart, they are trapped in an
endless cycle of recalculation and financial hardship. Does he
agree that it is clear the current assessment cycle is not fit
for purpose?
I do agree, and I point my hon. Friend to the written answer I
secured, which gives the statistics for every constituency in
England, Wales and Scotland. She will see that the rate of
deductions is around £60 in her constituency, but she will also
notice that the number of households affected by deductions is
increasing. She makes an important point about looking at an
individual’s pay cycle and whether it is four-weekly or
monthly.
Let us look at some examples of people affected by deductions.
The Trussell Trust tells us that almost half of people referred
to food banks in its network are subject to deductions from their
benefit payments due to repayment of a benefit advance or a
benefit overpayment. We will see that linkage repeatedly during
the debate. The Trussell Trust goes on to remind us that
“The five-week wait for Universal Credit means many people have
no choice but to take an Advance Payment to manage essential
bills like rent and utilities”,
which immediately places them in debt and reduces their income
below the standard allowance.
Deductions for overpayments, including tax credit overpayments,
often take people by surprise because they are historical or are
the result of DWP error. Like other deductions, they can be taken
from people automatically at unaffordable rates. The standard
allowance of universal credit does not provide enough income to
cover the cost of life’s essentials, so any deduction taking
people below that already low level will push them further into
hardship. Key phrases are advance payments, overpayments that are
historical or due to Department for Work and Pensions error, and
the cost of living essentials. I will come back to each of
those.
We then hear from the Trussell Trust about consequent mental
health wellbeing, which is often impaired by people struggling to
understand what they owe, and why, and how to access support. The
Trussell Trust is not alone in making those observations. The
organisation Feeding Britain has
“a vision of a UK where no one goes hungry”.
I should also mention Good Food Scotland, with which I do a lot
of work in Glasgow South West.
(Strangford) (DUP)
I commend the hon. Gentleman for bringing this matter forward,
and I will be making my own contribution to the debate. The
Trussell Trust in Newtownards in my constituency was the first in
Northern Ireland, and what it has to say about vision reinforces
what the hon. Gentleman has said. According to Newtownards
Trussell Trust,
“our vision is for a world where food banks, like ours, don’t
need to exist.”
That is what we want to see, and I know the hon. Gentleman wants
the same.
I thank the hon. Gentleman very much for that intervention. As he
knows, he has relatives of mine among his constituents in
Newtownards. He is absolutely correct about our vision: we all
want to see a world in which food banks do not exist. I know he
is very supportive of my Food Poverty Strategy Bill, which is a
private Member’s Bill that I recommend to all hon. Members.
Feeding Britain has talked to many people who are having to go
hungry. In the days leading up to the debate, food banks in
Brighton, Derbyshire, Leeds and High Wycombe reported speaking to
individuals who all cited deductions as a key reason for
referrals to them, and described some harrowing cases. For
example, a client in Chichester has some £55 a week to live on
after deduction of rent and other deductions for advances and
loans from universal credit. The client received no prior warning
or notice of the deduction, and even her work coach was unable to
explain why the deduction had been made. That client is a lone
parent with three children. She is worried that even if the
deduction is found to be a mistake, she will be waiting until the
next payment to receive the money that was deducted.
Feeding Britain has also told us of a client in Manchester who
had £72 deducted for rent arrears. The first he was made aware of
that was three days before payment when he accessed his payment
statement. Living off the standard universal credit allowance is
difficult as it is, but so much being deducted with so little
notice makes it almost impossible. The gov.uk website states that
universal credit will place a note on the journal when a
third-party debt deduction is about to start, but no such
information about the debts—how much was owed or how long the
client would be paying off the debt—was provided in that example;
there was not even a note telling them how further information
could be obtained by telephone. The closing comment from the
Manchester office was that
“the most efficient aspect of Universal Credit is debt
retrieval”.
In the report “UK Poverty 2023: The essential guide to
understanding poverty in the UK”, the Joseph Rowntree Foundation
highlights that key design features of the social security
system, including having to wait five weeks for the first
universal credit payment and universal credit being deducted to
pay off debts and arrears, directly lead to higher food
insecurity and have contributed to the rise in food banks.
The Child Poverty Action Group has shown that across the UK the
number of children living in households with debt deductions
being taken from their universal credit has risen to more than
2.2 million, making up more than half—53%—of all children in
households receiving universal credit. Those families are missing
out on an average of £73 a month as a result. Every commentator
seems to express similar views on where the system is failing,
and there is much commonality on where they think the appropriate
solutions lie.
The use of a predominantly online system has led to many cases
being raised with my office. In particular, vulnerable
constituents without consistent internet access or phone credit
may be unaware that they have been sanctioned until the payment
is made because they are not able to access their journal. Have
the hon. Member’s constituents experienced that? Does he agree
that DWP’s communication needs to be improved?
Yes, I do agree. My hon. Friend is right again about the lack of
information in journals. The example I gave of the individual in
Manchester is typical of what happens to universal credit
claimants who get caught up with deductions and other aspects of
the social security system that I want to see resolved. The
Government have recognised some of the problems and have reduced
the rate of deductions by lowering the cap and extending
repayment periods, but that is not enough; significant reductions
to already low incomes remain, and there is no affordability
assessment to ensure that people can afford the payments.
What action can we take? Research from the Joseph Rowntree
Foundation shows that support has eroded over decades, and that
universal credit standard allowance is now at its lowest ever
level as a proportion of average earnings. Together with the
Trussell Trust, it is calling on the Government to implement an
essentials guarantee to ensure that the basic rate of universal
credit at least covers life’s essentials and that the support can
never be pulled below that level.
Rather than offering one-off payments to shore up the incomes of
struggling families, the UK Government should reverse the
damaging policies impacting on our most vulnerable, including by
reinstating the universal credit uplift of £25 a week, removing
the benefit cap and the two-child limit, and halting punitive
sanctions regime, which the hon. Member for Rutherglen and
Hamilton West () outlined. In addition,
the Scottish National party recommends that the Government
immediately introduce an amnesty on deductions resulting from the
Department of Work and Pensions’ own errors. Advance payment
loans should be turned into non-repayable grants after a claimant
has been deemed eligible, as the Work and Pensions Committee
recommended in our report. Too often, we hear that advances are
not loans, but if someone is paid money and is expected to pay it
back, that is indeed a loan, not an advance.
We are also arguing for the cap on the monthly rate of deduction
to be lowered, and for the widespread use of sanctions to be
stopped, as there is clear evidence that they do not work. A
London School of Economics study found that the impoverishment of
larger low-income households has helped few parents to get a job,
and is instead pushing families further into poverty and damaging
their health.
I said at the start that I will intersperse my contribution with
comments, examples and solutions from Scotland, so here are some.
Social Security Scotland can take deductions from some
benefits—the adult disability payment, the child disability
payment and the Scottish child payment—to pay back an
overpayment, but when overpayments occur, it engages with clients
to discuss their circumstances and agree a payment plan that
takes them into account. Its debt management strategy states:
“Where the repayment method is voluntary deductions from
benefits, we will mutually agree a value with client as part of
Affordability Assessment. Where enforced deductions are applied
due to client not engaging with us to agree a payment plan, a
maximum deduction of 10% of Scottish Benefit Entitlement will be
applied unless the overpayment is due to Fraud, in which case a
maximum of 15% will be applied.”
That social security philosophy and those actions work.
The Scottish National party believes that social security is an
investment in the people of Scotland and a key part of the
Scottish Government’s national mission to tackle child poverty.
It continues to do everything it can with the limited powers and
fixed budgets it receives from this place. That includes
investing £5.2 billion in benefits expenditure in 2023-24,
supporting more than 1 million people. I have stated clearly that
we need to tackle child poverty. The Scottish Government’s
tackling child poverty delivery plan estimates that 90,000 fewer
children will live in relative and absolute poverty this year, as
a result of the policies of the Scottish Government. However, the
Scottish Government should not have to pick up the broken pieces
left by this place, or keep using their limited powers and fixed
projects to mitigate damaging Conservative party policies.
With every day that this Government fail to fix the known
problems of universal credit and the social security system, and
fail to use their reserve powers to tackle the rising cost of
living adequately, they demonstrate that independence is the only
way for Scotland to boost incomes and build a fairer society. The
rest of the United Kingdom needs to fix its broken social
security system; Scotland is already determined to do so.
Dame (in the Chair)
I remind Members that they need to be here for the full debate if
they are going to take part. I was also going to ask Members to
bob if they want to take part; I thank Members for doing that. I
call .
9.46am
(Strangford) (DUP)
My goodness! Thank you, Dame Maria. That threw me off. It is a
pleasure to serve under your chairship for the second day
running. It has come to the point when you and I are in
Westminster Hall almost as much as each other. Well, maybe that
is an exaggeration. It is also a pleasure to follow the hon.
Member for Glasgow South West (), who rightly brought
forward this topic. We met on the Terrace this morning and he
said, “Jim, will you come and do your bit?” and I said, “Does the
Pope have red socks? Absolutely, I will be there. There is no
doubt about it.” I am here to endorse what he said. A person from
the food bank wrote me a letter, and I will quote the best part
of it. He illustrates very well what happens, and why it is
important.
I can well remember the fear at the outset of universal
credit—the fear that people would be worse off, and that families
would struggle. Boy, do they struggle. I am sorry to say that,
but they do, because I witness it every day. I witnessed it on
Friday in my office, with a person who had the same problem with
universal credit. We were able to sort it, by the way. I find it
incredibly hard to understand how universal credit works, and I
am far from stupid. Once through the technical details and the
machinations of the whole thing, one has to ask, “How on earth
does anybody follow this?”.
For some, this fear has become a real struggle, and the
deductions from an already sub-par universal credit is enough to
push some families over the edge. I have seen that in my
constituency office. My staff have a continuously good
relationship with the social security offices round the corner. I
have to put on record that they are brilliant. The number of
problems that they have sorted out when my staff speak to them
illustrates that they have grasped how the system works and how
to get through it, but the ordinary person cannot do that. I have
struggled to understand it as well.
It should be remembered that those who are unemployed or unable
to work have a set rate that remains pretty stable. However,
self-employed people have different work weeks, and the
flexibility that universal credit was supposed to offer has
resulted in deductions from overpayments. The hon. Member for
Glasgow South West mentioned that, and I endorse it. The
deductions are so hard to work out that families are left not
even understanding how they owe money. It is
incomprehensible.
The Minister understands. I am no different from anybody else
here. Whenever we approach the Minister and explain the issues,
he always tries to respond in a positive fashion. I appreciate
that, and want to put that on record, because it is good to have
a Minister who really wants to do things and help out. We are all
working in our constituencies, advocating for our constituents,
and we know well the issues that the hon. Member for Glasgow
South West outlined.
I was contacted last week by the phenomenal manager of the local
food bank, a man with the largest heart for helping families and
vulnerable individuals. I want to read out his comments, as time
permits. My speech is his letter to me, because it illustrates
the issue really well. The hon. Member for Glasgow South West has
friends and relatives in Newtownards. I know them—and think they
vote DUP, by the way, so maybe they are not nationalists.
Not a chance.
I think they do; he does not know them as well as I do. The
letter states:
“As a food bank operating in Newtownards, we are writing to you
to raise our concerns about rising numbers of people in our
community who are needing to turn to food banks, like ours,
because they cannot afford the essentials we all need to
survive.”
These are his words: “This is not right”. I say amen to that.
“In the last financial year we saw a 30% increase in clients
coming to the Newtownards Foodbank compared to the previous year.
We are aware that our summer has started really busily with an
average of 24 different families attending each week since June
in what is normally our quieter spell.
Many attendees are struggling with the inability to feed there
families and provide fuel for their house needs. A significant
proportion are actually working but their outgoings outstrip
their income. Those on benefits clearly don’t get enough to match
their basic needs.
While the cost of living crisis and the pandemic have placed
additional pressures on incomes, this year’s rise is part of a
longer-term trend in levels of need. Support has eroded over
decades and the basic rate (‘standard allowance’) of universal
credit is now at its lowest ever level as a proportion of average
earnings. Alarmingly, the number of parcels provided this year is
more than double the amount distributed five years ago.”
I will say that again, because that is an important line:
“Alarmingly, the number of parcels provided this year is more
than double the amount distributed five years ago.
No one should be forced to turn to a food bank because they
cannot afford essentials, including food. We provide immediate
support to people in our community when they are struggling the
most, but our vision is for a world where food banks, like ours,
don’t need to exist.”
I said that in an intervention on the hon. Member for Glasgow
South West. That is his vision, mine, the vision of every
Opposition Member and, I hope, of the Minister. The letter also
says:
“Research by the Trussell Trust shows that inadequate social
security is the main driver of food bank need and there is a
known link between issues with the benefits system and food bank
use. This can and must change.
Alongside the Trussell Trust, we are calling for our social
security system to Guarantee Our Essentials by making sure that
the basic rate of Universal Credit is at least enough to afford
the essentials we all need, such as food, energy and basic
household goods – and that deductions can never pull people below
this level.”
He asks me:
“Will you support the principle that, at a minimum, Universal
Credit should always protect people from going without the
essentials?”
That is Richard’s letter to me this week. I will say on the
record that I fully support what he said.
Mr (East Londonderry)
(DUP)
My hon. Friend has succinctly summed up the issues in the letter
from his constituent. Does he agree that faith-based food bank
providers in my constituency, his and others are doing excellent
work, and that most people in society, including universal credit
recipients, support the principle of the universal credit system,
which is to encourage people back into work? The problem is that
when there are deductions, and almost a penalistic regime, people
suffer. That problem must be solved in our society, because
people are being driven further into poverty, rather than lifted
out of it.
My hon. Friend has succinctly made his case in his intervention.
The key issue for the Minister—this is from me, the hon. Member
for Glasgow South West, who set the scene very well, and, I
suspect, everybody on the Opposition Benches—is that there is a
delay in the system, and difficulty understanding the system.
Whenever we go to the local office, the office manager and staff
can respond, but there are many people other than those who come
to us—and there are many who come to us, by the way; many come to
the office with this issue, because they still cannot understand
it. We are asking the Minister for the extra help that is quite
clearly needed. There is also the five to six weeks’ delay that
many people seem to have. Whenever they earn more money, they
fall back down again. They are often sick, and their housing
benefit is so complicated; it is almost hard to try to comprehend
it.
The hon. Member has talked about budgeting. For many, short-term
budgeting is a necessity. The housing element of universal credit
is paid directly to claimants, not landlords, which contributes
to an entirely foreseeable problem. Does he agree that,
especially given soaring living costs, it would help claimants
budget if we removed the direct payment of this element to
claimants?
The hon. Lady has demonstrated clearly the complications of this
system, and others will, too, because they have the same
knowledge and interpretation of it as I have.
I will finish with this. My answer to Richard, the manager of the
food bank, is clear: yes, I support what he said. I hope that his
letter has clearly illustrated what is needed. Will the
Government support that, make things easier for my constituents
and do things differently? I hope that the answer to that is also
yes; I am sure that it will be. Families—my constituents in
Strangford, constituents across the whole of Northern Ireland,
and constituents across this great United Kingdom of Great
Britain and Northern Ireland—must be able to depend on their
Government, rather than their local food bank. That is my story
today.
9.55am
(Birkenhead) (Lab)
It is a privilege to serve under your chairmanship, Dame Maria. I
congratulate the hon. Member for Glasgow South West () on securing a debate of
such enormous importance to our constituents. It is good to see
the Minister in his place. I hope that in his remarks he will do
away with the prevarication and tired excuses that we so often
hear from the Dispatch Box on this subject, and that he will have
the courage to confront head-on the disastrous consequences of
this Government’s cruel and pernicious benefits regime for
millions of people across this country.
The design and roll-out of the universal credit system have
proven to be a catastrophe for the worst-off in our society. In
my constituency of Birkenhead, nearly 14,000 people are in
receipt of universal credit. With the exception of housing, there
is no issue that constituents come to me about as frequently as
the inadequacy of universal credit payments during the cost of
living crisis, the questionable and often downright wrong reasons
for which deductions are made, and how the five-week wait is
forcing many people even deeper into debt.
Research by the Joseph Rowntree Foundation shows that this is a
nationwide crisis. The basic level of universal credit now stands
at its lowest level as a proportion of average earnings, and 90%
of low-income households on universal credit are going without
essentials. When we talk about people who have deductions made
from their payments, it is important to acknowledge that most
claimants struggle to survive even when they receive their
payments in full.
We should also remember that a significant proportion —around
40%—of the people we are talking about are already in work.
Although Ministers talk about deductions being a necessary
incentive to ensure that claimants fulfil their obligations under
the scheme, the vast majority of deductions are in fact debt
repayments, either to the DWP or to third parties.
Universal credit deductions are now one of the leading causes of
destitution in this country, and the most vulnerable are paying
the price. Families with children, and families in which somebody
is unable to work because of illness or disability, are
significantly more likely to have deductions to their universal
credit payments, and 2.2 million children are growing up in
households in which deductions are routinely made from universal
credit payments. Although it has been reported that the average
reduction amounts to 15%, nearly half of all households with a
deduction have over 20% of their basic allowance deducted.
Yesterday, I met Victoria Benson, chief executive of the charity
Gingerbread, which provides invaluable support to single parents,
to discuss the impact of the two-child limit and universal credit
deductions on single-parent families. She explained that single
parents are disproportionately over-represented among universal
credit claimants. Some 70% of single-parent households are in
receipt of universal credit, and that figure is likely to rise to
90% by the summer of next year as a result of the managed
migration from legacy benefits.
The struggles of being a single parent—raising children on one’s
own, trying to make ends meet and searching, often in vain, for
affordable childcare—are very real. Now, many single parents are
also forced to grapple with deductions that leave them with an
uncertain income each month and unable to afford the essentials
for either their children or themselves. The result is parents
going without food so that their children can eat, and falling
even deeper into debt.
We are all entitled to a basic level of comfort and dignity. If
the universal credit system is not guaranteeing that to the
millions of people who rely on it as a lifeline, it is simply not
fit for purpose.
9.59am
(Arfon) (PC)
It is a pleasure to serve under your chairmanship, Dame Maria,
and to speak in this debate. I congratulate the right hon. Member
for Glasgow South West ()—sorry, the hon. Member,
though I am sure he will be right hon. at some point—on securing
it.
I did have a much longer speech. However, I cut it quite severely
for this debate, thinking that there might be a mass of
Conservative Back Benchers here to defend their Government’s
policy. Clearly, I was mistaken. Given First Minister Mark
Drakeford’s statement last night that Welsh Labour would oppose
cuts and stoppages to universal credit, I had rather hoped to see
a mass of Welsh Labour MPs here as well. I confess that cannot
spot a single one, though I commend the three Labour Back
Benchers who are present, and look forward to their speeches.
Arfon is one of the poorest constituencies in the UK, as the
Minister will know, having stood against me there some time
ago—but we will not go into that. For the poorest of the poor,
the outlook is very bleak. In February this year, 4,500 people
claimed universal credit in Arfon, and 2,100 of them, or 48%,
were subject to deductions—nearly half of them. The average
deduction was £59. The total deduction taken from the very
poorest people in Arfon every month is £125,000; grossed up, that
is £3 million a year. Every year, therefore, the poorest people
in Arfon are returning £3 million to the Treasury. They cannot
afford that. They are on universal credit—a sum assessed to be
the very minimum needed to live. I could not live on universal
credit, and certainly not on universal credit that is reduced by
£59 every month. I have a straight yes/no question for the
Minister: could he live on universal credit that has been cut
every month by £59?
I did a surgery specifically on universal credit some time ago,
and did a budgeting exercise with a constituent of mine from a
housing estate on the very edge of town. She knew exactly how
much she had to spend. There was nothing spare at all. Looking at
the figures, I said, “ Look, you’ve got a pound spare.” She
replied, “Once a week, I take the bus home with heavy shopping,
rather than having to walk the whole way every time.” I do not
know exactly how much I have to spend every month. Does the
Minister know? My constituent did. She is an expert. It is unlike
the picture that is often conveyed of people on universal
credit—that they are somehow feckless.
In Wales, in February, 114,100 children lived in families who are
on universal credit and paying deductions. The percentage of
Welsh children in universal credit households paying deductions
was 57%. Three of every five children are in families on
universal credit living below the minimum sum assessed to meet
their needs. That is the level of deprivation that the system
causes. The Trussell Trust has been mentioned several times; it
is no surprise that people on universal credit are being referred
to its schemes in Wales. Over half of them are also paying
deductions. It is quite clear from the evidence where the problem
lies: with deductions for half of people on universal credit.
The monthly deduction from universal credit households with
children in Wales was £4,208,000—over £50,496,000 every year.
Wales is a poor country. Other parts of the UK are poor as well,
such as north-east England and Merseyside, but I can say this for
Wales as a Welsh MP: our poorest people cannot afford to lose £50
million in income every year. We cannot afford this Tory
Government. Indeed, we need a coherent Welsh benefit system,
among other things, starting of course with the devolution of
benefits administration—that is my party’s policy.
On 24 April of this year, I asked the Under-Secretary of State
for Work and Pensions, the hon. Member for Mid Sussex (), a very straightforward
question:
“Have the two-child limit and the benefit cap increased child
poverty?”—[Official Report, 24 April 2023; Vol. 731, c. 491.]
Now, I would imagine that most people here know the answer to
that. The Under-Secretary of State, however, replied with 88
words of evasion but no answer. Put simply, that answer is of
course, “Yes”.
The two-child limit affects nearly 19,000 families in Wales, and
abolishing it would give each child an extra £3,235 every year.
On a UK basis, it has been calculated that this change would cost
£1.3 billion. To put that in perspective for hon. Members, the
most valuable premier league squad is Manchester City, which is
valued at £895 million. But let’s not be too ambitious! The fifth
most valuable is Man United at £645 million; for the value of two
Man United squads, we could take all of these children out of
poverty. This Government will not do it, but for pity’s sake,
what about the official Opposition angling to be the next
Government? Are the lives of children blighted forever by poverty
not worth two football teams? Would that not be better on day one
of a new Government—better than scrambling to balance the Tories’
books?
The shadow Minister should consider the words of Raymond
Williams, one of the giants of socialist thought in this country
in the last century—although a member of my party, not his—who
said something very striking, with which I will finish:
“To be truly radical is to make hope possible rather than despair
convincing.”
10.07am
(Liverpool, West Derby)
(Lab)
It is a real honour to serve under your chairship, Dame Maria. I
thank my good friend, the hon. Member for Glasgow South West
(), for securing this
important debate and for his excellent speech, and other hon.
Members for their fantastic contributions.
The DWP has the power to make direct reductions from benefit
payments to pay certain debts and costs owed by an individual.
This can include money paid to the Government due to a benefit
overpayment, or a loan to a third party such as a landlord,
utility provider, local authority or the courts. It is worth
noting that the majority of benefit deductions are for DWP debts,
including those related to universal credit advance payments,
overpayments and budgeting loans.
I want to draw attention to several factors of universal credit
deductions that seem to be having an extremely negative impact on
my Liverpool, West Derby constituents. First, many new universal
credit claimants now take out an advance while they wait for
their first payment, and the advance is usually recovered by
deductions of equal instalments over a period of 24 months. The
pain that our constituents are facing right across the UK has
been outlined today, but taking out that advance payment seems to
be actively encouraged by the DWP. Secondly, when someone moves
on to universal credit, any outstanding tax credit debt is now
transferred to the DWP, allowing it to recover the debt through
any of the methods available to it, which are far more extensive
than those available to His Majesty’s Revenue and Customs.
Universal credit rules allow the DWP to make deductions for
overpayments caused by DWP error, which was not the case with
legacy benefits.
A major area of concern with deductions is the basic premise of
affordability. It is staggering that there is no requirement for
the DWP to determine whether someone can actually afford a
deduction, or to consider what that deduction would do to their
and their family’s life. From the weekly emails I receive from
desperate Liverpool, West Derby constituents, and from speaking
to people in my surgeries, it is plainly clear that many simply
cannot afford the deductions enforced on them The levels of
universal credit deductions faced by far too many of my
constituents, including extremely vulnerable people, are causing
them to struggle to pay for essentials such as heating, fuel,
food and toiletries—the very essentials of life. It is driving
them into absolute, abject poverty.
At the mobile food pantry that we run in Liverpool West Derby
every Friday with Fans Supporting Food Banks and St Andrew’s
Community Network, I hear many stories of people being forced
into using emergency food aid as a result of DWP deductions. This
is replicated across the city at the other five services that we
run, and the pattern repeats across the UK, as we have heard from
Members today. The Government argue that their deductions can
help claimants to better manage their finances, but in December
2022 the Trussell Trust reported that more than half of all
universal credit claimants who experienced deductions in their
benefits had one day when they could not afford to eat at all or
only had one meal because they could not afford to buy enough
food in the previous 30 days. We need to remember that we are the
sixth richest country in the world, and to drive people into
these circumstances is completely immoral.
The Trussell Trust highlighted new research showing that 47% of
people referred to food banks had faced deductions to their or
their partner’s benefits income to pay back a benefit advance,
benefit overpayment, DWP loan, or any other debt or fine. That
rose to 57% among those referred to food banks who were in
receipt of universal credit. In its June 2023 report, “The
welfare debt trap: Adjusting the level and priority of deductions
from benefits to prevent hardship”, Citizens Advice found that
the deductions have created hardship and are applied
disproportionately to households in which someone has at least
one long-term health condition or disability and to households
with children, which are also more likely to have deductions
applied at a higher level. Those people are the most
vulnerable.
The current system of deductions clearly targets our most
vulnerable citizens and is driving millions of people into
poverty. It is supposed to be a safety net. Let us be crystal
clear—amazing, I can see the Minister puffing his cheeks— that
the current universal credit deductions system is not fit for
purpose and needs fixing urgently. Where do we go from here? I
urge the Minister to take the following measures into
consideration for the benefit of the huge number of people, many
extremely vulnerable, who are suffering as a consequence of these
actions. The DWP must place affordability at the heart of
deductions and prioritise the reduction of the total amount being
deducted from households. At the heart of the calculations must
be the basic human right every citizen should have: to be able to
afford food, water, shelter, clothing and heating. The DWP must
not be allowed to push people into abject poverty.
The Government must provide immediate breathing space for
low-income households that are under extreme pressure due to the
cost of living crisis. The priority order for deductions must be
changed to put greater emphasis on debts where non-payment has
the most serious consequences and less emphasis on debts to the
Government. The Government must get serious about helping people
not to accrue debts in the first place, especially through the
use of advanced payments or loans. Deductions for overpayment
owing to DWP error should not be made. Minister, my door is
always open to discuss how a right to food could be implemented
to tackle the scourge of food poverty, which we see across all
our communities and have heard about so bleakly today. The ball
is firmly in his court.
Dame (in the Chair)
We come to the last Back-Bench speech and will then move to
Front-Bench contributions at 10.28 am.
10.13am
(Leicester East) (Ind)
Thank you, Dame Maria, for allowing me to speak. It is a pleasure
to serve under your chairship. I want to congratulate my friend,
the hon. Member for Glasgow South West (), on securing this very
important debate.
The UK is a country shamed by the poverty of millions of its
people, yet this Government sadly seem endlessly able to find
ways to penalise and humiliate people for being poor. There are
14.5 million people in this country living in poverty, with many
of them claiming universal credit, and in the middle of a cost of
living crisis, the DWP is making deductions from a staggering 45%
of claimants. My constituents in Leicester East face deductions
significantly above the national average. As we have heard,
around half of the deductions imposed on claimants are for
advanced payments, which they are forced to request because the
universal credit system is constructed to deprive
claimants—already in need—of support for at least the first five
weeks following their claim.
A survey by the TUC found that 86% of universal credit claimants
had been put into financial difficultly because of the mandatory
waiting period. Those are figures from 2020, before the current
cost of living crisis. Financial difficulty has caused “immense
misery”, resulting in
“many being forced into debt, relying on food banks or going
without food. Many said it had impacted their mental health
through stress and anxiety and that they had felt degraded by the
process.”
Claimants in need are then forced to pay back advance payments at
a rate of up to a quarter of the already meagre support that they
receive through universal credit, prolonging and intensifying
their hardship. I thank the hon. Member for Glasgow South West
for tabling his important written question. In his answer, the
Minister claimed that the payments are “not a debt”. The
deduction at source from a paltry benefit—just £747 a month on
average based on the figures provided by the Minister—certainly
makes it look like a debt, handled in just the same way as debts
to other bodies.
The Government appear to have decided to structure the benefit in
that way with the help and for the convenience of the DWP, simply
because they can, putting people into hardship. That is an act of
class warfare and a clear abuse of power. Advance payment
deductions amount to about half the total monthly deductions from
universal credit payments, exposing the fundamental, structural
unfairness and harshness of the universal credit system.
To make a bleak picture even worse, the data provided by the
Minister in his 4 July response to the written question asked on
29 June 2023 by the hon. Member for Glasgow South West shows that
the amounts deducted do not include sanctions under the draconian
conditionality regime. In the same period as the one covered by
the Minister’s response, the latest official statistics report
that 6.18% of claimants were under sanction, with 44,000 new
adverse sanction decisions in a single month and a year-on-year
increase of 2.5%.
As well as the directly inflicted hardship of applied sanctions,
just under a third of claimants are in conditionality regimes and
under the threat of sanctions. The regime means that tens of
thousands of people, already struggling, are facing unbearable
hardship and the abject terror that they could suddenly become
penniless. However, last year, the Government blocked the release
of data from an academic study to find out whether such
deductions were linked to ill health, poor mental health, suicide
or attempted suicide, despite having previously promised to
provide it.
The evils of the current system are clear and beyond any
reasonable dispute. This is class war; it is neoliberalism writ
large. The aim is to punish and control working-class families,
targeting the most vulnerable through increased social and
material losses. To coin the term of Friedrich Engels, it is
actually “social murder”. Advance payments that have to be
repaid—which are a debt, whether or not the Minister chooses to
term them as such—must urgently be replaced for those in dire
need and in destitution by a system of non-repayable grants, to
alleviate at least some of the onerous burden that the Government
have placed for too long on the shoulders of those least able to
bear it.
10.19am
(Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Dame Maria. I
thank my very good friend, my hon. Friend the Member for Glasgow
South West (), for securing this timely
debate. I say “timely” because it is almost a year to the day
since I raised a similar issue in the Chamber. With that in mind,
it is incredibly worrying that the situation outlined today has
not improved. Instead, it has continued to spiral out of control,
thanks to the British Government’s inaction.
I have listened with great interest to the contributions made
this morning. Given the announcements this week, there is no
better time to stress the damage that has been caused by this
fatally flawed universal credit system. Last week, Citizens
Advice published new data showing that families are operating in
negative budgets, which means that their income no longer meets
the basic costs of covering food, energy and housing. According
to its latest analysis, two in 10 households have £100 or less
after paying for monthly essentials, and of the 40,000 people who
Citizens Advice sees with debt problems, over half cannot be
helped, as they have already cut back so much on the bare
essentials.
This all comes as a result of an austerity agenda pursued by the
British Government—a Government who refuse to make the necessary
change to universal credit deduction rules, despite households
facing severe financial destitution and uncertainty. As we have
heard today, the impact of deductions is significant and all the
more pertinent to our constituents as they continue to be gripped
by the cost of living crisis.
As my hon. Friend the Member for Glasgow South West said, the
average Scottish household has had £59 deducted from their
universal credit. In a cost of living crisis where every single
penny counts, that is the difference between putting food on the
table and having to go hungry. As he outlined, the deductions
affect almost half of Scottish households on universal credit,
with the DWP clawing back around £12 million a month. Nearly half
of those deductions are to pay back universal credit advance
payments because struggling households cannot wait five weeks for
their first payment. This is a system that is fundamentally
flawed.
It is therefore no surprise that since January this year, 60% of
universal credit claimants whom citizens advice bureaux have
helped with deductions have also required help accessing food
bank or emergency charitable support. Trussell Trust data
indicates that people with deductions were around twice as likely
to go without food, toiletries and utilities as those on
universal credit without deductions, and over two thirds of
people in Scotland who were referred to food banks in the
Trussell Trust network in receipt of universal credit were facing
a deduction.
Furthermore, the latest statistics from Citizens Advice show
that, of the 84% of people who had their benefits deducted, 43%
have had to borrow money to cover the essentials. In addition,
the Child Poverty Action Group reported that more than 2.2
million children are living in households with debt deductions
from their universal credit. I know from speaking to constituents
in Parkhead, Shettleston and Tollcross that the uncertainty of
how much a deduction is or when it will be taken causes
significant and, most importantly, unnecessary hardship for
claimants.
In their reports, charities refers to universal credit deductions
as “wiping out people’s finances” and
“trapping them in a spiral of debt”.
“Trapping” and “spiralling” are words that I would never wish to
associate with a social security system, yet the system that this
Conservative Government have designed and presided over continues
to push individuals into a never-ending cycle of debt and
financial insecurity. As a number of Members have stressed, the
British Government are subjecting vulnerable people to heinous
deductions that push them into further debt and destitution.
Debt, in and of itself, has a profound impact on the cost of
living, and that is only exacerbated by this broken system, which
is forcing people to make impossible choices that amount to their
being unable to even meet the most basic needs.
When the root cause of the issue is poor system design, it is
astounding that the Government continually refuse to make the
necessary changes to rules around deductions. We are faced with a
British Government in denial, who do not believe
“that pausing deductions by default is necessarily in the
claimant’s best interest.”
What is it about being unable to afford basic food, buy household
essentials or heat their home that is in the claimant’s best
interests? People are already diverting limited resources towards
debt repayments and that is only compounded by unexpected
deductions.
Despite continued and constrained resources, the Scottish
Government are doing what they can to mitigate the impact of this
broken system, but the root cause undeniably starts here in
Westminster. We know the Government can make solutions and
immediate changes today that would make a huge difference to
those struggling the most and make our constituents’ lives
somewhat more manageable, as so many continue to face impossible
household budget decisions. Those changes need to be made sooner
rather than later, as millions face food insecurity, soaring debt
and unnecessary hardship.
My hon. Friend is making an excellent speech. We must ask the
Minister to consider the need for some discussion between
claimants and the DWP, particularly where the DWP’s own errors
are causing the deduction. Does my hon. Friend agree that there
needs to be a discussion about an affordability assessment
between the claimant and DWP in future?
I thank my hon. Friend for his intervention. When the permanent
secretary of the DWP gave evidence to the Work and Pensions
Committee, I raised the issue of the recovery of some of the
payments. The permanent secretary acknowledged at the time that
despite the heavy-handed wording in the DWP’s letter, there was
scope for a discussion between claimants and the Department. The
fact that the Department has not been willing to amend the text
of that rather hard-hitting letter makes the point.
We have a broken social security system that is perpetuated by
the UK Government. Moreover, I say to the shadow Minister, the
hon. Member for Reading East (), that there is no point in his
party winning the election and coming into Government but
continuing the policies of this Government. He and his party
should be thoroughly ashamed of being thirled to a two-child
policy and an associated rape clause that is the very opposite of
what the Labour party should stand for. The hon. Members for
Birkenhead (), for Leicester East () and for Liverpool, West
Derby () are good socialists who are
appalled by the policy. If the hon. Member for Reading East wants
to stand up and take the opportunity to apologise for his party
pursuing a policy that is tantamount to social engineering, I
will be happy to hear that. If he does not do so, my constituents
will conclude that the only way to ensure we do not have
disgraceful social security policies is with the powers of
independence, because this lot clearly have nothing different to
say.
10.28am
(Reading East) (Lab)
It is a pleasure to serve under your chairmanship, Dame Maria. I,
too, congratulate the hon. Member for Glasgow South West () on securing today’s
debate. The issue of deductions is both incredibly important and
sadly often neglected. We often discuss the adequacy of social
security as if it were simply a matter of looking at the value of
benefits, which has fallen in real terms since 2010 as a result
of below-inflation uprating and freezes. However, that is only
part of the story.
As we have heard today, we cannot assume that people are even
getting the amounts set out in benefit rates. About 2 million
households, or about 42%, on universal credit have their benefits
reduced below the standard rates every month to repay debt to the
Government. Deductions and debt to the Government are at a scale
we have never seen before and have become a routine aspect of
social security administration under the current Government, and
I am afraid to say that that major change to the benefits system
has largely escaped scrutiny.
The official Opposition are not opposed in principle to
deductions, but the problem is the scale. There will probably
always be a need for benefit deductions in social security. For a
start, it is unlikely that any system will ever completely
eliminate incorrect benefit payments, and taxpayers expect
overpayments to be recovered wherever possible. There is
also—views differ on this—a role for repayable loans to smooth
out the pressure of unpredictable costs, as other hon. Members
have said.
We need to recognise that deductions cause hardship for many
families that, by definition, are on very low incomes. The
Trussell Trust reports that 57% of universal credit households
that use food banks face deductions—we have heard accounts of
that today. Its evidence shows that 50% of people on universal
credit with deductions have had more than one day in the previous
month either having only one meal or having gone without eating
altogether. That compares with 26% of those without deductions.
The Joseph Rowntree Charitable Trust has shown that decisions
particularly hit families with children and people with limited
capability for work, more than half of whom face deductions.
There is little doubt that, in the middle of the worst cost of
living crisis for decades, benefit deductions are pushing
families that are already struggling into destitution, as hon.
Members have said. I hope Members from across the House agree
that, as far as possible, the Government should aim to minimise
deductions, but unfortunately the opposite seems to be happening.
Nearly half of all universal credit households face deductions
each month, so we need to recognise that the system is not
working as it should.
One of the main reasons for that is the timing of universal
credit payments—a problem that the Government were repeatedly
warned about at the design stage of UC. Families have to wait
five weeks for their first universal credit payment, and somehow
the Government persuaded themselves that that would not be a
problem for the great majority of families claiming because they
would have a pay packet or savings to tide them over. According
to the Department for Work and Pensions, about 60% of people
making new claims for universal credit have had to take out an
advance, and as of February this year, 732,000 households were
paying off new claims advances.
In addition, more than 900,000 universal credit families are
facing deductions for budgeting advances. In other words, nearly
one in five of all UC households have had to take out a loan to
get through the month. We were promised that universal credit
would deal much better with fluctuations in income and need than
the benefits it replaced. The fact that so many people need to
take out budgeting alternatives shows that that is unfortunately
far from the case.
Although deductions may be a necessity, there is no excuse for
using them as a default mechanism to deal with problems that the
Government have failed to address. Ministers should be trying to
minimise deductions by addressing those problems at source, but
that is the opposite of what the Government have actually been
doing. Where deductions are unavoidable, the Government need to
manage them much more sensitively, as we have heard pleas for
today, and take into account households’ circumstances.
Qualitative research by the Trussell Trust states:
“Many people who have experienced government debt repayments were
not supported to understand the situation they were in”—
that is a crucial point.
“They didn’t know why the money was owed, they didn’t know how
much they needed to repay, and they didn’t know how long the
repayments were going to last. Of particular concern was that
they also didn’t know what—if any—options or choices were
available to them.”
Given that deductions cause genuine hardship for so many
families, we should expect the DWP to adopt a high standard of
customer service. It should proactively contact claimants—I hope
the Minister will address that point—take into account
affordability and ensure claimants are fully aware of the scale
of debt and the options available to them, but improving customer
service can go only so far. Debt and deductions are playing a
much bigger role in social security than they have in the past,
largely because of the failure of universal credit to live up to
the claims that were made for it. We should not welcome that
situation at the best of times, and certainly not in the middle
of the worst cost of living crisis in a generation.
10.34am
The Minister for Employment ()
It is a pleasure to serve under your chairmanship, Dame Maria. I
congratulate the hon. Member for Glasgow South West ()—my good friend, and I
apologise for calling him that, as I realise he will get some
opprobrium for it, but we are friends, albeit our views differ—on
securing the debate. It is a pleasure to answer on behalf of the
Government.
We recognise the importance of supporting claimants to manage
their financial obligations, and the deductions policy in
universal credit provides a co-ordinated approach to providing
that support. There is much that I want to address today, but I
will start with the basics: employment is up, vacancies are down,
economic inactivity is down and we are pleased to see that
inflation has fallen today.
The Government believe that we should continue to have a
sustainable, long-term approach to tackling poverty and
supporting people on lower incomes. The primary aim of the
universal credit deductions policy is to protect claimants by
providing a last resort repayment method for arrears of essential
services, and to ensure obligations are enforced. It is important
to strike the right balance between ensuring protections are in
place and allowing claimants to retain as much of their benefit
as possible for their day-to-day needs, while understanding that
although the taxpayer expects us to recover overpaid benefit
debt, that must be done without causing undue hardship.
It is worth remembering that people who are on disability
benefits and pensioners have never been more supported. Welfare
has never been more supported. Colleagues will be aware that
state pensions and benefits were uprated by 10.1% in April this
year, the national living wage was increased by 9.7% to £10.42 an
hour, and other support includes the energy price guarantee, the
household support fund and the various cost of living payments,
which I will go through in a little more detail. It is not right
to look at universal credit through the prism of what it provides
because, for those who require extra support, there are the cost
of living payments—£94 billion over 2022-23 and 2023-24—as we
continue our support for the most vulnerable households.
Over 8 million UK households on eligible means-tested benefits
will receive additional cost of living payments totalling up to
£900 in this fiscal year. The first £301 payment was made in
April and May this year. Two further payments of £299 and, I
believe, £300 will follow this autumn and in spring 2024. That is
£900 additional support over and above the universal credit
support that is provided.
In addition, 6.4 million people on eligible extra costs
disability benefits have also recently received a further £150
disability cost of living payment. In 2023-24 we will spend £276
billion on Great Britain’s welfare system, including £124 billion
on people of working age and children. Much criticism was made in
the debate, which I have taken on board, but those sums have
never been higher.
There is also approximately £30 billion for supported housing.
Again, a criticism was made that we do not provide enough for
that. I remind colleagues that 1.4% of GDP goes on supported
housing. That is by a significant margin the largest sum in the
OECD—the next highest is 0.9%. Those are the consequences of
decisions made to support individuals on an ongoing basis.
Much was made of the deductions policy, which I will try to
address.
Will the Minister give way?
I will always give way to the hon. Gentleman.
The hon. Member for Glasgow South West () referred to the deductions
and the data he had received for England, Scotland and Wales. He
had asked for the same information on the deductions in Northern
Ireland, but for whatever reason that was not available and I do
not understand why. Can the Minister use his powers to enable us
to have that data?
I can hardly turn down a man who ambushed me with cake not once
but twice in Newtownards on my two visits to Northern Ireland. It
was a pleasure to join the hon. Gentleman and his colleagues
there. I saw not just a thriving business, but some of the
difficulties and complexities of life in Newtownards and the work
that he and the local support organisation to which he referred
very favourably, and rightly so, are doing.
On the Northern Ireland statistics, I am 99% sure that those are
due to the changes in Government and the current difficulties in
relation to Stormont, but I will do everything I can. I will
write to the hon. Gentleman individually—[Interruption.]—and to
the hon. Member for Glasgow South West, of course. I will
probably refer the hon. Member for Strangford () to the Department for Communities in Northern
Ireland, with a view to ascertaining the specific data that he
seeks. He will be aware that, as we discussed when I visited his
beautiful constituency by the lough, I as the individual Minister
do not control individual jobcentres or the policy in Northern
Ireland.
The hon. Gentleman raised a couple of points, which, as he
intervened on me, I will try to deal with. One of the points—a
general criticism of the roll-out of universal credit—was also
raised by the hon. Member for Birkenhead (). I respectfully reject that
point. Disregarding what one thinks of this Government, under no
circumstance could the legacy benefit system have coped with
covid. Under no circumstance could it cope with and support the
cost of living support that we are rolling out on an ongoing
basis. Under no circumstance could it allow for the universal
approach that we are able to manage because of universal credit.
The hon. Member for Birkenhead has a very illustrious
predecessor, to whom I send best wishes, because I know he is not
in good health. Lord Field would very much have made the case
that universal credit was the right thing to do and that it was
right to reform, albeit that the roll-out has been a long-term
situation.
The managed migration of tax credits was also discussed. With
respect, that is an ongoing policy, and there is transitional
protection for people moving from tax credits to universal
credit. I respectfully invite colleagues to be aware that the
migration is going well and that there are ongoing
protections.
The hon. Member for Arfon () raised many points. It is
not really for me to get into the disastrous state of Labour
policy, whether it is that of the Welsh First Minister, the
Leader of the Opposition, colleagues on the Opposition Back
Benches or the hon. Member for Reading East (), who chose to present the
Opposition’s policy. The best comment I heard was from the hon.
Member for Leicester East (), who has left—or perhaps
the Labour party left her. She quoted Engels, and I think also
Marx, in support of her policies. When Marx was talking about the
division of labour, I did not know he was actually talking about
the Opposition party. The long and short of it is that in
Labour-run Wales employment is down, as compared with the rest of
the country, where it is up. We could compare and contrast the
health service in Wales and in England; the constituents of the
hon. Member for Arfon, even on the Llŷnpeninsula, are travelling
to England for operations.
I believe that I have the time briefly to say that I remember
well the summer of 2005, when the hon. Member for Arfon and I
were both younger, fitter and probably better
looking—[Interruption.] He did not have much hair even then, I
have to say. We were both standing for the seat of Arfon and the
Llŷn peninsula, as the constituency then was, I believe. The hon.
Gentleman was exceptionally courteous to this young
whippersnapper, who was representing the Welsh Conservative
party, particularly when we attended a hustings event that was
conducted entirely in Welsh. Although I can say diolch and many
other things, can order two beers in Welsh, and have a mother who
is a Llewellyn from the Tywi valley, it was an ordeal I will
never forget: spending two hours conducting the whole meeting in
Welsh, with some rather large headphones for the translation.
The hon. Gentleman rightly raised affordability assessments. I
will come to that, if he will bear with me, but it is
unquestionably the case that changes have been made to the
universal credit deductions policy following representations made
by a Select Committee and others, and it is right that I try to
explain where we are with that.
In April 2021, the cap on the standard deductions was reduced to
25% of a claimant’s universal credit standard allowance. That
followed a reduction from 40% to 30% several years earlier. At
the same time, we doubled the new claim advance repayment period
to 24 months. The consequence of that was that hundreds of
thousands of universal credit claimants retained more of their
award. The reduction in standard cap was warmly welcomed, and we
believe that it maintains the right balance.
Colleagues have raised many specifics about deductions, but one
must remember, for example, that well over 150,000 individuals
have child maintenance deducted in respect of children for whom
they are responsible. I could add more detail about individual
deductions and the different types of deduction, but the child
maintenance deduction in particular is one that concerns the
Department because it is the state’s obligation to ensure that
parents are responsible to some degree for the children they
have. Some of those deductions—well over £2 billion—are made in
respect of child maintenance, and scrapping all deductions
policy, which some have called for, would have a massive impact
in that regard.
There are obviously budgeting advances, which help to finance
intermittent or unforeseen expenses—for example, essential
household items. Those advances ensure that low-income families
with an emergency financial need who do not have access to
adequate savings or a loan can access funding.
Several hon. Members have mentioned their food banks. I put on
the record my support for the Miner’s Lamp food bank in Prudhoe,
which I visited again recently and supported with a donation. In
respect of loans, credit unions up and down the country are doing
a fantastic job and should be supported by Members. I was proud
to set up the Northumberland Community Bank, which is the
fastest-growing credit union in the north. I am not involved with
it now, which is probably why it is the fastest-growing credit
union in the north, but it was very much set up with the Church
of England and with local communities to try to provide low-cost
savings and loans to support individuals and keep them out of
potential difficulties.
We believe that we have reached the right balance on the level of
deductions from benefits, but we are committed to supporting
those who might be struggling. I want to try to address that
situation. It was asserted by various colleagues that there is no
fall-back position. I do not accept that. We strive to set
affordable and sustainable repayment plans, and encourage
customers to contact the Department if they are unable to afford
the proposed repayment rate. When a customer makes contact, we
might be able to reduce the rate of repayment or temporarily
suspend repayment, depending on the customer’s financial
circumstances.
The review period for customers with a negotiated affordable
repayment rate has also been extended from six months to two
years. However, customers may contact us at any time to
renegotiate affordable repayment terms.
rose—
rose—
I will give way to the hon. Member for Glasgow East (). The hon. Member for Reading
East has had his say.
I am grateful to the Minister for giving way. It is important
that information is communicated slightly better to claimants. As
an action point, will he undertake to go away and look at how
information could be better cascaded to claimants so that they
are aware that there is a bit more flexibility? I would
appreciate that.
I certainly will do that, and I will also have a look at the
individual letters that apply in those particular circumstances.
All such letters, as the hon. Gentleman will know having done the
pensions job for five long, lovely years, are kept under review,
and there is the opportunity to do that.
The hon. Member for Rutherglen and Hamilton West () is no longer in her
place—I know she has to be elsewhere—but she raised in particular
the issue of access to a journal for those who do not have the
internet. Again, we need to make it clear that, obviously, an
individual claimant can attend a jobcentre, which has computers
that claimants can use to access their universal credit claim and
their individual journal, or they can speak to a member of staff
who can support them through the process.
Will the Minister give way?
Bear with me. I might give way, but I am going to keep trying to
make progress. The hon. Gentleman had 20 minutes and will have
more time soon.
Much criticism was made of DWP staff, particularly by the hon.
Member for Leicester East. She used various expressions that I
utterly reject. I will not dignify them by repeating them, but I
want to make it utterly clear that I am proud to work with the
25,000 men and women who work in our 700-plus jobcentres up and
down the country. They do a fantastic job in trying to assist
everybody. When she impugns the individual character of DWP
staff, I am afraid she is utterly wrong. She should reflect on
that and visit her local jobcentre.
Will the Minister give way?
No, I will not; I am so sorry. I do not think I want to dignify
the hon. Lady with any further comment in this debate.
The practical reality of the situation is that we believe very
strongly that individual claimants have the ability to receive
support. I could go on about various points in respect of
advances and the five-week wait. During their first assessment
period, a new claimant can receive a payment up to the expected
amount of their UC award, which can then be repaid over 24
months. It is not possible to make a payment as soon as a claim
is made, and colleagues should understand that. The assessment
period must run its course before the award of UC can be
calculated. It would not be possible to accurately determine what
a claimant’s entitlement will be in the month ahead. The process
ensures that claimants are paid their correct entitlement, which
is something we all wish to see, and prevents significant
overpayments from occurring.
I welcome today’s debate, and I understand and share the concern
of the hon. Member for Glasgow South West that we should ensure
that we support the most vulnerable in society. I want to finish
on a couple of key points. Much criticism is made of the
situation in respect of long-standing poverty, but it is a
long-standing principle of the Government that the most effective
and sustainable way to tackle poverty is by supporting people
into work and to progress. In 2021-22, working-age adults living
in families in which all adults were working were seven times
less likely than working-age adults in workless families to be in
absolute poverty after housing costs, and we have made progress.
In 2021-22, there were 1.7 million fewer people in absolute
poverty after housing costs than in 2009-10, including 400,000
fewer children, with 1 million fewer workless households than in
2010.
Support exists on an ongoing basis and, as I say, there has never
been a larger sum spent on those who are most vulnerable. The
cost of living support continues into 2024, and I commend the
Government’s approach to these issues.
10.52am
I think the Minister said I had 20 minutes to sum up, but you
might have something to say about that, Dame Maria. I thank the
hon. Members for Strangford (), for East Londonderry (Mr Campbell), for Rutherglen
and Hamilton West (), for Birkenhead (), for Arfon ()—as I was reminded by him,
he has a sophisticated electorate, given its electoral
history—for Liverpool, West Derby () and for Leicester East (). I also thank the Front
Bench spokesmen.
I thank the Minister for his kind words in referring to me as his
good friend—that will probably get me deselected during the
summer when I seek to secure selection again. I also thank him
for mentioning the great . Frank was at an event in
Parliament this week, alongside Feeding Britain and Good Food
Scotland, and he told me that he agrees with me on universal
credit deductions. I hope the Minister will take that on
board.
In reply to the Minister, it starts with a five-week wait, and
the Government will really have to deal with this situation
whereby we are handing out loans. They are not advances; they are
loans. I ask the Government to look at how quickly they can pay a
benefit as soon as someone hits the eligibility criteria.
As the hon. Member for Reading East () says, the real issue is the
scale and the number of deductions now taking place. Like others,
I ask the Minister to look at what happens when there is a
departmental error. The Department really needs to look at the
information that has been provided on the online journal and have
that discussion. My hon. Friend the Member for Glasgow East
(), who is a good friend—that
will not get him deselected—rightly said that the Minister said
he would look at the communication. That also needs to be about
the information given to claimants, and I ask him to look at that
and come back to us. Affordability assessments should be standard
practice.
The Minister did not address the crucial point: since the
Government have eased the deductions and made their changes,
there has been a cost of living crisis. That is why we are asking
him and the Government to look again at easing the rate of
deductions, which we think will help the situation.
Every single Member has spoken about food poverty and has given
examples of how deductions are causing it. I am on a crusade—a
mission—to end food poverty across these islands, which is why I
have introduced a private Member’s Bill to that end. One way to
end food poverty is to address the universal credit deduction
situation. I hope that the Minister will do that during the
summer, because if he does not, we will be coming back and having
another debate.
Question put and agreed to.
Resolved,
That this House has considered the matter of Universal Credit
deductions.
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