Iain Duncan Smith: “Universal credit is a huge driver for positive change”

18th October 2017

Speaking in an Opposition Day debate, Iain Duncan Smith condemns calls to stop the roll-out of universal credit for short-term political reasons, as that would damage universal credit which is capable of dramatically changing lives for the better and delivers an improved quality of life to thousands of people.

I rise to support my right hon. Friend the Secretary of State, who I thought made an excellent speech. I congratulate him on the courage and the spirit in which he produced his commentary against quite a lot of what is really scaremongering about the way in which the system has been designed.

First and foremost, the point I would make about universal credit is that it was designed to simplify the system, as well as to get more people into work. The second but very important element is that universal credit is about dealing with the very great difficulties of identifying those people—the minority, admittedly—who need universal support and then, with councils, providing them with help on debt counselling and getting them into the banking system in order, basically, to get them ready for work. Until now, those people have by and large been written off and forgotten about in a complex system—disjointed between councils and jobcentres—that did them no favours and provided them with no support. That is what we were trying to get rid of and believed we were actually getting rid of.

Will my right hon. Friend give way?

I recognise that time is limited, so I will limit the number of times I give way.

Universal credit is not just about getting people into work; it is actually about changing lives so that those people are ready and better able to enter work. Why are there monthly payments? The very simple answer is that over 80% and rising of all work is paid monthly, and the figure will soon be close to 90%. That means that if people are not ready, able and prepared to pay bills and deal with their money in monthly periods, they will never survive in the world of work, as has happened to many people crashing out of work.

Will the right hon. Gentleman give way?

I will give way to other Members in a minute, but let me make a second point. When it comes to housing, why do we want people to pay their rent, rather than always have it paid for them directly? There is a simple answer. All too often, housing associations and local authorities receive the money directly, but then do very little for the tenants. They often know very little about their tenants, and they quite often care even less about their lives. The result is that many tenants run up arrears because nobody bothers to get involved.

I will give way in a minute.

That is why universal support—now bringing in councils—will identify such people and help them. That is the purpose of universal credit.

Was my right hon. Friend as surprised and disappointed as I was, during Prime Minister’s questions, to hear this policy described and characterised as “calculated cruelty”? There is nothing cruel about getting more people into work. There is nothing cruel about encouraging more people to work more than a mere 16 hours. There is nothing cruel about simplifying an overly complex system. The cruelty is trapping people in a lifetime of benefits.

I thank my hon. Friend for that intervention.

The right hon. Gentleman has explained the theory of the four-week delay, but does he accept that that theory simply does not work for the very large number of people who are still paid weekly?

It is not a theory, but I will come on to that in a minute. The right hon. Gentleman and I have had plenty of conversations and discussions about the structure of this, and I want to take him up on that point.

I want to make the point, which is not often referred to by Labour Members, that the whole nature of the roll-out was deliberately set so as not to repeat the grave mistakes made when they rolled out tax credits and other benefit changes.

Will the right hon. Gentleman give way?

No, because I am conscious that others want to speak, but I will come back to the hon. Gentleman in a minute.

I recall that my surgery was full of people who, under the tax credit changes, found they had no money at all. When Labour rolled out tax credits in a big bang, over 750,000 people ended up with no money at all. Since then, the thresholds have had to be raised dramatically to get money to those people.

Will the right hon. Gentleman give way?

I will give way in one second.

The roll-out of universal credit has been deliberately designed—it is called “Test, learn and rectify”—so that, as it happens, we can identify where there are issues, rectify them and then carry on rolling it out. I want to give an example of why stopping the roll-out now will not work.

One area that we discovered early on is that landlords were simply unaware of who was on benefits. As a result of all that, arrears would be racked up, but they did not know they could get that stopped and have direct payments made. That will be changed in the next stage of the roll-out, because a portal between landlords and the service centre will allow them to establish that immediately. Unlike the local housing allowance, under which people ran up huge levels of debt, but reset slightly and carried on, universal credit allows them only a two-month period of debts before they go on to direct payments. That critical change will be one way of resolving the problem.

It is worth reminding the House that the former Secretary of State resigned because of the cuts being made to universal credit. I am puzzled about why he does not think it is a good idea to implement the potential fixes being suggested during the roll-out.

I will come to that. The hon. Gentleman should not worry—I will not resile from why I resigned.

Too much of the debate has been based on evidence that is months old, when rectification has taken place and changes have been made. Let me give an example that has not been mentioned. The mistakes in tax credits and housing benefit mean that more than 60% of those coming on to universal credit already carry debt and rent arrears. Universal credit is identifying those people and having to clear up the errors. That is an important point. Before universal credit, too many people were left to get on with their lives and get deeper and deeper in debt.

My right hon. Friend and I are about the same age. Does he share my concern that anyone who is younger than us and listening to the debate might labour—no pun intended—under the misapprehension that, before the election of a Conservative Government in 2010, the previous system was perfect, when it has been bedevilled by flaws for decades? That is why this simplified system, when all the bumps have been ironed out, is welcome.

I am grateful to my right hon. Friend, who has borne the years better than me. However, I will do anything for a kind look—[Laughter.] Particularly from my right hon. Friend.

It is interesting that, in the past 24 hours, the Joseph Rowntree Foundation has made the following statement:

“Universal credit has the potential to dramatically improve the welfare system, which is fragmented, difficult to navigate and can trap people in poverty.”

It went on to say that the system will help people

“transition into work and will respond better to people’s changing circumstances.”

I agree. It would have been nice if the Opposition had started their debate by being clear and positive about how and why universal credit can change lives.

The point about test, learn and rectify is that it does exactly that. My right hon. Friend the Secretary of State made many points in his excellent speech about the changes that are already beginning to happen. For example, some of the rent arrears are beginning to come down and the portal will help enormously with that.

However, I ask my right hon. Friend about universal support, which is the critical other bit of universal credit that no one has mentioned. It allows us to pick up the pieces around universal credit and deal with them on a human basis. Universal credit flags up when somebody has a debt problem and when they are running into arrears. Universal support is vital to work directly with them, using councils, jobcentres and all the other agencies, and hub up around them to help them change their lives on the basis of knowledge about how to pay their bills, their banking facilities and their debts. I ask for reassurance in the winding-up speech that Ministers will put in the extra effort, focus—and money, when necessary—to ensure that universal support rolls out successfully alongside universal credit. That is critical.

The right hon. Gentleman seems to acknowledge that universal credit has not worked for everyone, so does he agree that it has been almost as bad for some of those affected as online reviews of his novel, “The Devil’s Tune”? Comments include: “frighteningly bad”, “rubbish”, “utter drivel” and “hilariously awful—an outstanding compendium of bottomgravy”.

I thought that was a reference to the hon. Gentleman’s speaking ability in the House.

Universal credit is a huge driver for positive change that, as the Joseph Rowntree Foundation said, will not just get people into work quicker, but help us identify those in deep difficulty and change their lives. That is the critical element that I hope will unite the House on what universal credit is all about.

We should not stall universal credit because doing so would damage it. Changes need to be made, and the problems that have been discovered need to be rectified as we move forward. The way that the system is being run is therefore right.

I direct my right hon. Friend the Secretary of State to some of my earlier comments. As I said, I hope that the Chancellor will look again the way in which financing for the work allowances has been reduced. I would like that to be changed. My right hon. Friend made a very good point when he said that we keep what needs changing constantly under review. The issue around waiting days is critical—I know that he will consider that and see if the evidence stacks up for whether changing that would make a major difference.

I congratulate my right hon. Friend on moving swiftly to ensure, as was always the intention, that jobcentre staff can pay out the advances on the day or within the week and, more than that, notify every would-be recipient of universal credit that they are eligible to receive them. That will dramatically change the position of many who have found themselves in difficulty because of the monthly wait.

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I apologise, but I am about to conclude.

Universal credit is the single biggest change to the welfare system. Those who care about it know that it is capable of dramatically changing lives for the better. My party should be proud of it. I will therefore not support the motion because it intends to stop the roll-out and damage universal credit for short-term political reasons. We should resist that, ask the Secretary of State to make the changes, but not stall the roll-out because universal credit changes lives and delivers an improved quality of life to thousands of people.

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