Work and Pensions Questions

Alok Sharma answers MPs questions to the Department for Work and Pensions.

Universal Credit: Household Debt

9. What recent assessment her Department has made of trends in the average level of household debt for people on universal credit. [903739]

The Government have taken a number of steps to reduce the risk of problem debt, including capping payday lending costs and promoting savings.

Within universal credit, we also have interest-free advances and a system of priority deductions to help claimants who have got into arrears.

The Government’s own data shows that rising numbers on universal credit are falling into rent arrears, and many claimants in my constituency are going to food banks or approaching payday lenders. Although an advance is available, this is a loan, which is to be repaid at 40% of the standard allowance. Another 40% can be deducted to repay creditors—for example, utilities. That is a total of 80%. Can the Minister reassure me that 80% of the individual allowance cannot be deducted, and that affordability checks, like those that all payday lenders have to do, are carried out before any deductions are actioned?

Of course the hon. Lady is absolutely right to highlight that we want to make sure we help those who are in arrears. She will know that research done by the National Federation of ALMOs—arm’s length management organisations—has reported that three quarters of tenants were in rent arrears already before they moved into universal credit. She talks about deductions; the percentage is 40%. However, I am happy to meet her to discuss this matter further.

It is a genuine pleasure to welcome the Minister to his place and, through him, to thank his Parliamentary Private Secretary for arranging a visit for me to see universal credit working in his constituency this Friday. Further to the question, will my hon. Friend outline the steps being taken to ensure that organisations on the ground help vulnerable people access 100% of universal credit advances rather than get into debt?

Yes, I can confirm that work coaches and those who perform the interviews at jobcentres make people aware that they can access 100% advances, which are of course interest free, as I said. The other aspect that is available is personal budgeting support, which individuals who need it can also receive.

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Universal Credit

11. What recent progress her Department has made on the roll-out of universal credit. [903741]

12. What recent progress her Department has made on the roll-out of universal credit. [903742]

Universal credit transforms the welfare state and the rollout is proceeding to plan, with universal credit now available in one third of all jobcentres in Great Britain.

Easterhouse Housing and Regeneration Alliance is a coalition of eight independent housing associations that has been based in my constituency and operating for pretty much my entire lifetime. It has profound concerns about the rollout of universal credit in Glasgow. Given that the Government have given a lot of commitment to go and meet various people on their Benches today, will the Minister come to my constituency to meet it and listen to its concerns?

When we have rolled out universal credit, we have done it in a manner that makes sense and works. Right now, 9% of those who will eventually end up on universal credit are on universal credit, and it will reach 11% by June this year. I am, of course, undertaking a whole range of visits to jobcentres across the country. I will make sure that I make a visit to Scotland, and we can have a discussion about whether there is an opportunity to visit the hon. Gentleman as well.

A terminally ill man has won the right to raise a landmark challenge to the Government after the introduction of universal credit left him significantly worse off. Having already acted unlawfully to 1.6 million PIP claimants at a cost to taxpayers of £3.7 billion, does the Minister guarantee that his Government will not be found guilty of unfairly treating the terminally ill?

I want to be absolutely clear: the changes that we are making in universal credit and in the benefit system are there to focus on protecting the most vulnerable. That is the underlying policy of universal credit and we will continue to do that.

Has the Minister had any discussions with colleagues in the Department for Education about their proposals for the eligibility of universal credit claimants to free school meals? If the current proposal were to go ahead, it would introduce a huge new benefit trap into the system, far worse than anything in the old system. Universal credit was supposed to remove such traps, not create new ones.

Currently, 1.1 million young people—students—receive free school meals. If the policy that has been put forward as part of the consultation goes ahead—where there is an earnings threshold of £7,400—an additional 50,000 young people will benefit from free school meals.

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Topical Questions

T3. Ryedale citizen’s advice bureau has seen a significant drop in the number of universal credit problem cases as a result of the measures introduced by my right hon. Friend and her predecessor, but we are seeing instances of advance payments being used to clear debts. What help and advice is being given to claimants in respect of budgeting and support, so that they can clear problem debts sensibly and sustainably? [903723]

Through universal credit, we are providing personal budgeting support, which is available through conversations with work coaches. That is making a great difference to those who need such help.

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What is the Secretary of State’s response to the report from the European Committee of Social Rights that said statutory sick pay and support for those seeking work or the self-employed is “manifestly inadequate” and therefore in breach of the legally binding European social charter?

I am happy to have a discussion with the hon. Gentleman on this point. All the policies we have put forward are based on being as fair as we can be to all recipients.

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T7. We have heard a lot today about universal credit, and making it work properly will depend to a great extent on DWP staff. With that in mind, will my right hon. Friend join me in congratulating the staff in Sittingbourne and Sheerness jobcentres, who are showing immense dedication and enthusiasm to ensure that benefit claimants in my constituency are not adversely affected by the roll-out of UC? [903728]

Of course I join my hon. Friend in congratulating the staff at Sittingbourne and Sheerness jobcentres. When I have spoken to work coaches in the visits I have made, they are incredibly enthused: they tell me this is the first time they are able to do what they want to do, which is help people into work.

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Developing a theme from this side of the House, I had the pleasure of visiting my local jobcentre on Friday. Will my hon. Friend pay tribute to the hard-working staff who are delivering record levels of employment in my constituency?

Absolutely: I congratulate the staff in my hon. Friend’s jobcentre, and by the end of the process of rolling out UC, we will have 5,000 extra work coaches across the country.

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The attractiveness to many of the two-weekly payments of UC are obvious, but does my right hon. Friend share my concerns that the Scottish Government’s decision to offer this to my constituents and other people across Scotland will leave those who choose it to be worse off than claimants in the rest of the UK?

It is absolutely the case that under the Scottish system individuals will be at a cash-flow disadvantage after a number of weeks. I would point out that, of course, alternative payments are available in England, too.

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T6. One of the challenges in the design of universal credit is that it does not take into account the fluctuating incomes of people who are freelance. They can earn a low amount one month and a high amount the next, but universal credit does not manage that properly. A self-employed person who has earned £15,000 in a year will get less under universal credit than an employed person who has earned the same amount. Will the Government to commit to fixing that anomaly? [903726]

As the hon. Gentleman knows, universal credit works on a monthly basis. When someone earns a large amount in a month, we apportion that over the following months. It is worth pointing out that it is entirely possible for people with those kinds of earnings to budget over the year, just as many businesses do.

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Some 70% of the rise in UK employment involves higher-skilled jobs. This is true in Wiltshire, which expects more than 2,500 jobs from Dyson alone. What work is the Minister doing with other Departments to tackle the science, technology, engineering and mathematics skills gap in the UK, so that Wiltshire can benefit from those jobs?

I have started to have conversations with ministerial colleagues, and my hon. Friend is absolutely right to say that we need to work as one Government to ensure that high-skilled jobs are created across our country.

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Bearing in mind the Secretary of State’s call for clear statistics, will she welcome today’s Library paper, which clarifies that 113,000 children will cease to receive free school meals under the proposed changes to universal credit, withdraw the claim that 50,000 more children will benefit at one point in time and bring that to the attention of the House?

A consultation is taking place, and the Department for Education will respond to it. Everyone who is currently on universal credit will have that benefit protected as long as the children remain in that education setting.

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