Universal Credit (Liverpool)

Mike Wood: I understand the hon. Gentleman’s quite legitimate concerns, but perhaps I can offer a little reassurance following the roll-out that has already happened in Dudley. Many claimants and the jobcentre—particularly in Stourbridge—are seeing that universal credit gives extra flexibility to help cases that simply would not have received the help and appropriate support they needed under the old system. More people—precisely the kind of difficult cases that he refers to—are getting into work and staying in work.

 

Dan Carden Shadow Minister (International Development)

I can tell the hon. Gentleman categorically that that is not the experience of people moving on to universal credit. The evidence I am giving in my speech does not back it up.

Analysis by Citizens Advice shows that a self-employed worker earning £9,750 a year would be £630 worse off under universal credit than an employee with an identical annual income but paid a regular monthly salary. It is astounding that the Government have overseen an increasingly insecure jobs market, based on bogus self-employment and agency and zero-hours jobs, while putting in place a welfare system that leaves the workers who do those very jobs hundreds of pounds worse off each year.

There are also changes to the work allowance. Mary is a hard-working single parent of three children in Liverpool and under the old system her income was topped up with £48 child benefit each week and a universal credit payment of £885 a month. After the changes, Mary’s salary and child benefit remained the same but her universal credit was cut by £219 a month. It is just another family pushed into hardship.

Yesterday I visited a constituent called Ann, who went on to universal credit when she lost her job as a cleaning supervisor in New Brighton in July 2015. She phoned the Department for Work and Pensions the next day to register a claim and was asked to attend a local jobcentre in Everton. She attended and was advised that she would need to go online to register, but she explained she had never had access to a computer or training in the use of one. She was asked whether she had a relative she could get assistance from. She was never once offered assistance in completing the application, even after she admitted lacking the skills to do so.

Ann attended a universal credit appointment on 18 August and received her first payment on 21 September. She went 10 weeks without receiving any payments and when she was in distress was told to attend the local food bank. She sought the support of local councillors in their surgery, because of the humiliation she felt at her situation and her lack of food. After her claim was live, she had three consecutive months of sanctions because of bewilderment at the system, and lack of understanding of the digital diary. She was then informed that she had to travel to look for jobs, but without any offer of travel expenses up front—all expenses had to be claimed back through receipts.

Ann summed up the experience as humiliating, degrading and utterly confusing—and she was one of the easy claimants selected for live roll-out. She was one of thousands in the city who will have followed a similar path from factory work decades ago to low-skilled work more recently, and who are now on the jobs market with no computer skills to enable them to navigate the system. I am sick of living in a society where we punish people because a broken economy does not provide them with decent jobs. What looks good to Ministers on paper is in reality asking a 60-year-old woman who has worked all her life to spend hours each day walking around a city handing in CVs in shops, begging for jobs. I do not think it is humane or worthwhile for society to be in that position.

I am here today to ask the Minister to apply the brakes—to stop the roll-out of universal credit in Liverpool and fix the flaws in its design and delivery. Outside Whitehall there is total acceptance that the current system will cause untold misery and push communities to breaking point across Liverpool. The Government have thrown away cross-party support for a new benefits model that would simplify the welfare state, and instead have caused chaos. Universal credit could be accepted, but only if it worked as originally intended. Ministers must remove the mandatory waiting period of 35 days; provide additional ring-fenced funding for local authorities based on local need; reverse the cuts to the work allowance and family premium; make sure that families making a claim for universal credit are at least as well off as they were under the previous system; remove the freeze on the benefit allowance and make sure welfare support reflects the needs of families; withdraw the disastrous two-child policy; and carry out a full cumulative impact assessment on the impact of welfare reforms at a local level. Finally, they must ensure that universal credit really does “make work pay”, while also carrying out the statutory duty of care to citizens.

The director general for the universal credit programme is Neil Couling. According to the ministerial code, he has responsibility for its implementation and has the power to pause it. I call on him urgently to use that power. He and Ministers have been warned about the impending crisis if they push ahead. I ask the Minister to step back and evaluate: what is the policy trying to achieve? I understand the predicament that the Department is in. It would cause a headache in Whitehall to pause the roll-out. Changes are deeply embedded, and it would be complex and expensive to stop, but that cannot mean, “Shut your eyes and hope for the best.”

Seven years ago there was cross-party agreement on the principle of simplifying the benefits system and helping people into work. However, the policy has unravelled because it was built on deeply flawed assumptions about what causes unemployment, designed in Whitehall by people who have never experienced poverty. It has become part of an agenda to undermine welfare provision and force the vulnerable and disabled to pay for an economic crisis caused by an elite. It is a joke that the Government talk about making work pay at a time when real wages are lower than they were 10 years ago. The Government have already been forced into a series of changes on universal credit. They backtracked on charging for the claimant helpline, they rolled back the six-week minimum wait—albeit only to five weeks—and they backtracked on 18 to 21-year-olds being excluded from the housing allowance. The Government know that the system is not working.

We urgently need to change the culture of the social security system from one that demonises people who are not in work to one that supports people and communities, that lifts people up rather than kicking them while they are down, and that seeks to improve the pay and conditions of those in work rather than punishing those who are not. Decent wages, lifelong learning and a patient strategy of long-term investment are how we will achieve a prosperous society. I shall continue to make those arguments in this House, but right now I have only one ask for the Minister: pause the roll-out of universal credit in Liverpool; fix it and save my constituents from the inevitable suffering it will unleash.