Government given pause for thought on universal credit roll-out

13 Oct 2017

MPs were queuing up to call for a pause to the roll-out of universal credit, in a series of oral questions for David Gauke, Secretary of State for Work and Pensions, who remained unconvinced of the need. Applicants can now ask for an advance payment of universal credit to help them get by while they wait for their first payment. This is called a ‚ short term advance‚ . Without a short-term advance it will take at least five or six weeks after someone applies for universal credit to get their first payment.

Neil Gray, SNP spokesperson on Social Justice, said rent arrears, food poverty and in-work poverty have all ‚ rocketed‚ in areas where universal credit has been rolled out. Hywel Williams, Plaid Cymru Spokesperson on Work and Pensions, quoted former PM Sir John Major, who said the roll-out has been characterised as ‚ operationally messy, socially unfair and unforgiving‚ . Williams asked for two remedies: to drop the waiting period, and to allow the benefit to be paid fortnightly, if the DWP does not opt to pause the roll-out. Alistair Carmichael (Lib Dem) said some 57 per cent of applicants for universal credit are having to borrow money before their first payment.

Debbie Abrahams, Shadow Secretary of State for Work and Pensions, said housing associations are saying that over 80 per cent of rent arrears are down to universal credit, and that the Mayor of Greater Manchester is predicting that rough sleeping will double as a result of its roll-out. Margaret Greenwood, Shadow Minister for Work and Pensions, added that 24 per cent of new universal credit claimants wait longer than six weeks to be paid in full. Only one advance payment is allowed for a new universal credit claim, she said. Mohammad Yasin (also Labour) said a recently bereaved constituent, a working single parent, has seen her income reduced by £300 a month since transferring to universal credit.

Andrew Selous (Conservative) wants the DWP to look at having volunteers who might be able to work alongside personal advisers to help people with low illiteracy and poor computer skills to fill in the application form in the first place. Philip Hollobone, Conservative, wants the DWP to consider the possibility of jobcentres writing supportive letters to landlords to explain the situation in which benefit claimants find themselves.

DWP Secretary Gauke said the evidence so far shows that those who go on to universal credit are more likely to be working six months later than they would be had they been on the legacy benefits, and they are also more likely to be progressing in work. Gauke added that people can receive an advance of their first month‚ s payment, which is then deducted over the next six-month period. ‚ Universal credit always means that it is worth working an extra hour and worth taking a pay rise‚ . Universal credit is likely to mean that 250,000 more people will be in work than would otherwise have been the case, he added.

Voluntary organisations may be able to assist, but Jobcentre Plus staff are already giving the intensive support necessary. There is already an obligation on social landlords, given the source of income through universal credit, to work constructively with tenants.

In a separate exchange, Damian Hinds, Minister of State at DWP, told Stephen McPartland, Conservative, said the DWP has already made the universal credit taper rate more generous by reducing it from 65 per cent to 63 per cent in April this year. McPartland said a taper rate of 63p in the pound is, in effect, a tax rate of 63 per cent on net income. ‚ Surely the Minister accepts that that is a punitive rate and a barrier to work‚ . Hinds said there is also always a trade-off with costs; reducing the rate from 65 per cent to 63 per cent, as the DWP has done, carries a cost‚ ‚ an investment in the system of £1.8 billion‚ .