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Politics

Universal Credit’s Black Hole

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A Conservative success story: Foodbanks help both those in work and unemployed

THE UK Government’s drive to cut the benefits paid to those most in need through the introduction of Universal Credit has impoverished the most vulnerable in society and removed universal support from the disabled replacing them with a patchwork of make-do-and-mend solutions which rely on councils to bail out the Westminster Government for its own failings in delivering the new benefit system in a working form.

The series of failures has prompted the National Audit Office, which scrutinises public spending for Parliament, to call on the UK Government to pause Universal Credit’s roll out until it sorts out the mess the reform has caused and is causing.

That call was rejected by the UK Government and led to allegations that the minister responsible, Esther McVey, had misled Parliament both about the NAO report’s content and the success of the Universal Credit roll out.

WELSH GOVERNMENT WARNS ON UC

Plagued by IT issues, incompetence, and the sort of ministerial short-sightedness that regarded the Council Tax as an untrammelled success, Universal Credit’s roll out across Wales has caused Welsh Government Housing and Regeneration Minister Rebecca Evans to write to Esther McVey, the Secretary of State for Work and Pensions, to warn about the impact Universal Credit is having on some of the most vulnerable people in Wales.

Rebecca Evans said: “Foodbank use in areas where Universal Credit has been rolled out has increased by 30% according to National Audit Office statistics, compared to a 12% increase in non-Universal Credit areas. This is extremely worrying.

“A Universal Credit claimant survey from Esther McVey’s own department shows that four in ten claimants were experiencing financial difficulties, and that 46% of new Universal Credit claimants need help to make their claim online.

“I have asked the Secretary of State to make Universal Support for people who claim Universal Credit available as widely as possible to help those people who are experiencing difficulties in managing their finances, and for those who are struggling with digital access.

“The recent National Audit Office report was clear; local authorities, housing associations and landlords are all seeing an increase in rent arrears since the introduction of Universal Credit.

“This chimes with many concerns raised and reported to me by the housing sector in Wales.

“The National Audit Office highlighted that the system is lacking in ways to identify vulnerable people, which makes it difficult to see how they are getting the right support, from the outset when they apply for Universal Credit. I have asked the Secretary of State to explain how she plans to rectify this.

“People who are more vulnerable can be offered alternative payment arrangements through Universal Credit, but we are seeing real inconsistencies in the way this is offered to claimants; the Department of Work and Pensions’ own claimant survey indicated that as many as 48% of those surveyed had to request this themselves, rather than being offered it proactively.

“I am deeply concerned about the flaws of Universal Credit, and its impact on the most vulnerable people in Wales, and I will continue to press the UK Government on addressing these.”

In Carmarthenshire, the Council has already set aside resources to help those plunged into uncertainty and financial chaos by the Tory policy, while across Wales Universal Credit recipients have experienced delays in payments and cuts to the benefits they receive leaving many in dire financial straits. In some cases, local authorities are stepping in to bridge the gap, but others are left unable to pay their rent and face eviction as a result. Some landlords are now refusing to take Universal Credit claimants owing to the defects in the payments system, penalising those in need for the incompetence of the DWP.

UNIVERSAL CREDIT FAILING

By the end of this parliament Universal Credit (UC) is expected to be fully rolled out. This new integrated benefits system for people both in- and out-of-work will shape the living standards of the lowest income families in the UK.

Part of the rationale for UC was making sure people are better off working. It is right that families should be able to better their living standards through work, yet in the UK today, the majority of people experiencing poverty live in working households.

Working poverty is highest among lone parents and couples with children with only one earner or where no one works full time.

Among households in working poverty that do not have all adults in full time work, over four in 10 have children of primary school age or below; two in 10 have children under the age of three. Some three in 10 contain a family member with a disability.

Bevan Foundation Director, Victoria Winckler, said: “Universal Credit has been in the pipeline for more than five years, but it is only now reaching all parts of Wales. The number of claimants is starting to go up quite quickly and we are beginning to see the impact of it on individuals, families and communities.”

Despite the number of people set to be affected, there’s been no up-to-date assessment of how the change will affect people in Wales.

Victoria Winckler continued: “The evidence from other parts of the UK is mixed. Some claimants cope well with the transition to monthly payments and the requirement to try to find work or increase the number of hours they work. But others struggle, getting into arrears with bills, debt and even having to rely on food banks.”

BENEFIT CHANGES HIT WORKERS HARD

Serious problems have now emerged in the treatment of the self-employed because of the way their earnings are recorded under universal credit. The issues have arisen because a “minimum income floor” (MIF), based on the national living wage, is used to calculate universal credit payments each month.

Because self-employed workers’ earnings fluctuate from month to month, they sometimes fail to meet the minimum figure and lose out compared with salaried counterparts. They are also only given a year to get their businesses off the ground before the MIF kicks in.

Ministers argue that the system has been designed to encourage people to increase their work and move into better jobs. However, the new report warns that some people have little choice other than self-employment. Ministers also ignore the fact that – for many – better jobs at higher wages are simply not available.

In addition, independent research has established that Universal Credit is – if anything – even worse value for money when it comes to administration costs than the system it replaced.

Having blown £817m on an IT infrastructure project which is unfit for purpose and now redundant, the current running costs per Universal Credit claim run at around £700. The claim made for Universal Credit was that it would reduce costs per claim to £173. There is no sign and little prospect of that target being hit.

DWP DEAF TO REASON

The National Audit Office report into Universal Credit is even more damning.

The NAO says: ‘We think that there is no practical alternative to continuing with Universal Credit. We recognise the determination and single-mindedness with which the Department has driven the programme forward to date, through many problems. However, throughout the introduction of Universal Credit local and national organisations that represent and support claimants have raised a number of issues about the way Universal Credit works in practice.

‘The Department has responded to simple ideas to improve the digital system but defended itself from those that it viewed as being opposed to the policy in principle.

‘It does not accept that Universal Credit has caused hardship among claimants, because it makes advances available, and believes that if claimants take up these opportunities hardship should not occur. This has led it to often dismiss evidence of claimants’ difficulties and hardship instead of working with these bodies to establish an evidence base for what is actually happening. The result has been a dialogue of claim and counter-claim and gives the unhelpful impression of a Department that is unsympathetic to claimants’.

The report continues: ‘The Department has now got a better grip of the programme in many areas. However, we cannot judge the value for money on the current state of programme management alone. Both we, and the Department, doubt it will ever be possible for the Department to measure whether the economic goal of increasing employment has been achieved. This, the extended timescales and the cost of running Universal Credit compared to the benefits it replaces cause us to conclude that the project is not value for money now, and that its future value for money is unproven’.

A BLEAK PICTURE FOR THE POOREST

Chief Executive of Child Poverty Action Group Alison Garnham said: “It was sobering enough to learn from the DWP’s own survey last week that four in ten people claiming universal credit have financial problems many months into their claim. Now we have an NAO report confirming just how miserable the experience of claiming universal credit is for hundreds of thousands of people who rely on it. Organisations working with claimants have been saying the same to the DWP for many, many months.

“The picture the NAO presents is justifiably bleak. On the ground, new claimants can’t even be sure they will be paid in full and on time. And how many people will be helped into work by the benefit is far from clear.

“There are clearly fundamental design and delivery problems in universal credit which must be fixed but it has also had its funding dramatically reduced so its capacity to deliver on the original aims has been compromised. The big work allowance cuts in particular have made it harder for claimants to increase the rewards from work.”

Joseph Rowntree Foundation Chief Executive Campbell Robb said: “We all want to live in a society where everyone receives support when they need it, and where there is an anchor to keep people from being swept into poverty. Universal Credit should, in principle, offer that support.

“The UK already has a problem with destitution, with more than one and a half million people in 2017 left unable to feed themselves, stay warm and dry, keep a roof over their heads and keep clean.

“There are major design flaws in the rollout of Universal Credit which have been left unfixed. Delays and sanctions leave people without enough to live on, and they struggle to pay off debt from advance payments. That’s not right. This system needs an urgent overhaul so that people’s essential needs are met without trapping them in long-term poverty.

“It is also concerning that the NAO can find no clear evidence that Universal Credit will help to boost the number of people finding work. The system needs to support people experiencing in-work poverty too, which is currently rising for families with children. By increasing work allowances, the Government can help 2.5 million working families and prevent a further 310,000 people from being pushed into poverty.”

As Labour MP, and veteran campaigner for the rationalisation of welfare benefits, Frank Field pointed out to Esther McVey in the House of Commons last week: ‘40% of claimants finding themselves in financial difficulty, 25% unable to make a claim online, and 20% overall, but two thirds of disabled claimants, not being paid on time and in full’.

Accusing Ms McVey of ‘dissembling’ to Parliament, further probing revealed that Ms McVey had not even bothered to read the NAO report which she had so assiduously rubbished and which had been signed off by her own Department.

News

Stephen Crabb MP calls for a fairer deal for farmers

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WITH concerns over the future of farming in Wales rising to the top of the political agenda, Stephen Crabb MP took up the opportunity to visit a dairy farm near Cosheston recently (Friday 8th March) to meet with a group of Pembrokeshire farmers to hear exactly why the new Welsh Government farming policies have caused so much concern to the industry. 

Held at Poyerston Farm, Stephen talked to the owner, NFU Cymru member, Roger Lewis, and a variety of NFU Cymru farmers and representatives as well as Samual Kurtz local MS and Shadow Minister for Rural Affairs, to hear their first-hand accounts of being part of one of the biggest farming demonstrations ever seen in Britain, which saw more than 3,000 farmers journeying to the Senedd. 

During the farm visit Stephen was provided with a tour of the rotary milking parlour and was able to find out more about the Welsh Government NVZ rules, the Sustainable Farming Scheme and the ongoing struggles with Bovine TB which are colliding to threaten the future of farming in Wales. 

Stephen said told The Herald: “It is clear from speaking to farmers today that a major overhaul is needed to the Welsh Government’s Sustainable Farming Scheme. The levels of stress and anxiety over all the new policies are justified and a lot of work needs to be done to restore the relationship of trust between Welsh Government and farmers.” 

He added, “Farmers need an agricultural policy that underpins local food production and support for securing resilient agricultural businesses and rural communities which is vitally important to Pembrokeshire. As the current policy stands, we are anticipating 5,500 jobs lost, a £200m hit to farm business incomes and 11% less livestock in Wales.” 

Carmarthen West and South Pembrokeshire MS, Samuel Kurtz said: “Agriculture is the backbone of our local economy, yet the fear in the sector at the Welsh Labour Government’s plans are real. From TB and NVZs to the Sustainable Farming Scheme, Welsh agriculture has been under sustained attack by the Labour Government.”

“Working closely with Stephen, we’ve helped give a voice to our farmers either at the Senedd or in Westminster, to ensure that those fears are heard by the Labour Government in Cardiff.” 

“A prosperous farming sector is good for our local economy and good for our environment. Huge thanks to the local NFU Cymru team for the visit and the honesty in which they outlined the impact of the Welsh Labour Government’s policies on farmers.”

Roger Lewis told this newspaper: “It’s been good to welcome both Samuel  and Stephen out to farm today, there are a number of factors which are really adding to the pressure on farming businesses at the moment, including of course Welsh Government NVZ regulations, the TB situation in Wales and changes to support arrangements for farmers under the Sustainable Farming Scheme and we are grateful to Samuel for keeping up the pressure in Cardiff on all of these issues which are in the control of Welsh Government.  When it comes to Westminster, NFU Cymru is keen to emphasise the importance of UK Governments making the right funding available via UK Treasury to support farmers in Wales, and we look to Stephen to help argue the case there.”

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Politics

Jane Hurtt demands urgent overhaul of energy market

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WALES’ social justice minister has called for an urgent overhaul of the energy market.

Jane Hutt warned that energy costs will remain almost double pre-crisis levels despite a decrease in the price cap from April.

She said: “The energy market needs a complete overhaul, so that customers are treated fairly no matter where they live and investment is made into local communities.”

Carolyn Thomas, a Labour backbencher, said it is a disgrace that standing charges, which hit those in fuel poverty the most, have been allowed to increase.

She told the chamber: “Standing charges also disproportionately impact my residents in north Wales, who are subject to the highest standing charges in the UK, and will be paying over £95 more than those in London.”

Ms Hutt recognised the injustice faced by people in north Wales, saying she has regularly called on the UK Government to introduce reforms.

She said: “There are two issues – the postcode lottery around the amounts charged, and the fact that costs are applied even when people have used very little or no electricity.”

The minister told the chamber north Wales households are hard done by because they live close to sources of affordable, renewable energy which is exported.

Ms Hutt said she has met the new chair of Ofgem and the Welsh Government has responded to a consultation on standing charges.

She said: “We need a solution that is fair to low-income and low-usage households, and that doesn’t continue to disadvantage households in north Wales.”

Delyth Jewell, who represents South Wales East, described the failure of the energy market as an inevitable consequence of privatisation.

Plaid Cymru’s deputy leader said: “It’s failed consumers, who have to pay extortionate prices for the basic necessity of staying warm enough to live.”

Ms Jewell warned that Ofgem’s new price cap will provide scarce comfort for many families.

She said: “It will do little to help households who still have prepayment meters being installed forcibly in their homes, a third of whom have been forced into self-disconnecting this year.

“And let’s not use nice language to hide the truth here – self-disconnecting isn’t a choice, it is enforced privation, it is state-sanctioned destitution.”

During social justice questions on March 6, Ms Hutt reiterated that major reform is needed as she urged Ofgem and the UK Government to take responsibility.

Criticising a lack of progress, she called for the introduction of a social tariff to help low-income households with their energy bills.

Jack Sargeant, who led a petitions committee inquiry into prepayment meters, warned there is nothing strict or tough about Ofgem’s new code.

He told MSs: “The disability charity, Scope, have recently said there are serious gaps in the new code, meaning that vulnerable people could still be forced onto prepayment meters.”

The Labour MS for Alyn and Deeside criticised Ofgem for failing to provide a response to the petitions committee’s report.

Mr Hutt agreed that it is an unacceptable way to treat a parliamentary inquiry, saying: “We need confidence that Ofgem is treating the Senedd with equal respect to Westminster.”

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Politics

MSs reject calls for public to have their say on Senedd reforms

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MEMBERS of the Senedd have rejected calls for the public to be given the final say on contentious plans to expand the Senedd and change the electoral system.

Labour, Plaid Cymru and the Lib Dems voted down a Conservative amendment for a referendum on the Senedd Cymru (Members and Elections) bill.

Under the bill, the size of the Senedd would increase from 60 to 96 members and a full form of proportional representation would be used in elections from 2026.

The 32 constituencies that will be used in the next general election will be combined to create 16 for the next Senedd poll, with each returning six members.

Darren Millar, the shadow constitution minister, argued the overwhelming majority of the public do not support expanding the Senedd nor changing its electoral system.

The Conservative disputed claims there is a clear public mandate for the reforms as he criticised “scant” references to Senedd reform in Labour and Plaid Cymru manifestos.

He accused Plaid Cymru of abandoning a commitment to pursue the single transferable vote electoral system, which would allow voters to rank candidates.

Mr Millar said: “It is abundantly clear that neither Labour nor Plaid Cymru voters at the last Senedd elections have given the green light for the reforms this bill seeks to introduce.”

He pointed out that the Conservative-led UK Government held a referendum on scrapping Westminster’s first-past-the-post system in favour of the alternative vote (AV) in 2011.

Mr Millar argued the planned closed-list voting system, which would see the electorate voting for parties rather than specific candidates, would prove even more unpopular than AV.

He told the chamber: “The reality is you’re all frightened of a referendum because you know full well that those proposals would be roundly rejected by the people of Wales.”

Mike Hedges, a Labour backbencher, pointed out there was no vote on the method of election for police and crime commissioners or mayors in England.

Heledd Fychan, for Plaid Cymru, told the chamber more than 63% of the vote in the 2021 election went to parties that had committed to Senedd reform.

She said: “It is beyond any reasonable doubt that there is a democratic mandate.”

Ms Fychan said there was no referendum on reducing the number of Welsh MPs from 40 to 32, and the UK Government resisted calls for a public vote on its Brexit deal.

Alun Davies, a Labour backbencher, who represents Blaenau Gwent, accused the Conservatives of crying crocodile tears about Welsh democracy.

He said: “If they respected Welsh democracy, we wouldn’t have seen the erosion of the powers of this place week after week, month after month.”

Mick Antoniw, the member in charge of the bill, said a compelling case for reform has been made in expert reports, which have been endorsed by three of the four political parties.

Wales’ constitution minister pointed out that hundreds of new members have been appointed to the House of Lords without a referendum.

Mr Antoniw told MSs the Wales Act 2017, which gave the Senedd control over its electoral system for the first time, does not include any referendum requirement.

Mr Millar also raised concerns about the “unacceptable” potential for a 10% variance in the size of Senedd constituencies from 2030, which is twice that allowed at Westminster.

He said from 2026 all Senedd constituencies will have about 147,000 electors, aside from whichever is paired with the protected Ynys Môn constituency.

Mr Millar explained that the paired Ynys Môn seat could have up to 25,000 fewer electors.

The Tory warned that from 2030 it will be possible for constituencies to vary in size by 30,000 electors or more, which he described as grossly unfair and inappropriate.

He said: “In the interests of fairness and equality of representation for all citizens of Wales, it is important that all MSs represent a similar number of constituents.”

Ms Fychan raised concerns about artificial quotas and unintended consequences, pointing to the example of the new Brecon, Radnor and Cwmtawe seat at Westminster.

The Plaid Cymru MS said: “If there must be a quota then we must include as much flexibility as possible rather than bind the boundary commission’s hands.”

Similarly, Mr Antoniw said introducing a smaller variance than 10% would mean more changes in Senedd constituency boundaries between 2026 and 2030.

He pointed out that there is no numerical limit in Scotland as he stressed the importance of flexibility to respond to matters such as geography and local ties.

MSs voted down the Tory amendment which would have halved variance to 5%.

Following the two-day stage-two debate on March 5 and 6, the bill now moves onto stage three – which will see further amendments debated and is expected to be held in late April.

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