I have been calling on the Government to halt its proposed roll-out of Universal Credit, and have met with representatives from groups in Durham who deal with claimants to discuss their worries about the proposed system. I also signed the cross-party letter urging the government to re-think the proposed roll-out in light of the issues raised by MPs of all parties. My recent meetings in the constituency with representatives from the Jobcentre, NEPACS (North East Prisoner Family Support) and from the Citizens Advice Bureau on this matter only reinforced my worries about the issues with Universal Credit, which have not been adequately addressed by the government.
Despite the announcement at Conservative Party Conference that this roll-out is still going ahead, my Labour colleagues and I are still calling on the government to pause the roll-out until a better system of support can be put in place.
The organisations that I met with raised the following specific issues with me:
Firstly, there is an ongoing problem with severe delays to payments of Universal Credit, with research showing that one in four new claimants have experienced waits of more than 42 days for new claims to be processed, causing great financial hardship and in some cases destitution for families. This is a particular issue for households living in the Private Rented Sector, and research also showed that nearly half of families who transitioned onto Universal Credit then fell behind with their rents, risking eviction and homelessness.
Secondly, there are fears about those in receipt of working tax credit, and child tax credit, being forced to seek more hours of work, even when this does not fit in with patterns of childcare, or arrangements that they already have in place with their employers to work a certain number of hours. In many cases, the extra cost of childcare caused by working longer hours is greater than any additional salary earnt from extra work, leading to less money in real terms for households.
Thirdly, there is the issue of the poor administration of Universal Credit, which impacts particularly on vulnerable claimants and those who find it difficult to navigate the benefits system. The need for suitable bank accounts, when some claimants are unable to open them, makes it harder for some people to claim the benefits they are entitled to. Secondly, the requirement that tenants produce signed tenancy agreements and bills to qualify for the housing benefit portion of the payments will produce difficulties for many in the private rented sector.
It is also unacceptable that the hotlines to receive advice about Universal Credit operate at a cost of 55p per minute, particularly as research by the Citizens Advice Bureau demonstrated that the average call length is 39 minutes. This means that claimants will have to spend around £20 to receive guidance with their applications for Universal Credit, representing a high proportion of their already limited budgets.
There is also the issue of deductions being taken from Universal Credit for overpayments of benefits, which has pushed claimants into further debt. It is concerning that the amount which can be deducted from Universal Credit claims is much higher than for with the previous legacy benefits, which has led to more claimants being pushed into debt.
Lastly, I am also concerned about changes to payments which mean that, under Universal Credit, all household benefits are combined into one payment to an individual. This means that under the new system, payments which previously had normally gone to the mother, such as child benefit and child tax credit, now go to the individual that the couple has jointly decided receives the payments. This has obvious implications for women’s financial independence, particularly in the context of women with abusive or controlling partners, or who have alcohol or drug problems.
When I met with NEPACS, they also raised the issue of financial support for ex-offenders, as the delays to initial payments of Universal Credit mean that in many incidences people are leaving prison without any financial support at all for the first six weeks. This prevents ex-prisoners from building a new life, and they less likely to stop offending without adequate support as they reintegrate into mainstream society.
I will continue to listen to individuals and groups in the constituency who have raised their concerns with me about the impact of Universal Credit, and will continue putting pressure on the government to re-think the planned roll-out in light of these issues.
I have written to the Minister of State for Work and Pensions, David Gauke MP, to raise these concerns and to urge the government to put better systems in place to address these issues before Universal Credit is rolled out, and will keep my constituents updated with the government’s response.