Theresa May rules out pause in introducing universal credit

Peter Walker, Rowena Mason and Jessica Elgot
Theresa May at prime minister’s questions. Photograph: AFP/Getty Images

Labour inflicted a symbolic defeat on the government over universal credit on Wednesday night, hours after work and pensions secretary David Gauke announced he would end a 55p-a-minute helpline for welfare claimants.

Up to two dozen Conservative MPs had said they may support a Labour motion, which called for ministers to “pause and fix” the controversial welfare reform, which the government whipped its MPs to abstain on. In the end, however, just one Conservative MP, the chair of the health select committee Sarah Wollaston, voted with Labour.

Earlier on Wednesday Gauke said he would end the helpline charge for claimants calling on mobile phones, an issue raised by Labour leader Jeremy Corbyn at last week’s prime minister’s questions, calling it proof that ministers were listening to concerns.

However, he said the government would press ahead with the welfare reform’s roll-out and would not heed calls to rethink the six-week waiting period before claimants are paid.

More than 75 MPs spoke in the universal credit debate. But the absence of Conservative MPs at the final vote forced two Labour MPs into the strange scenario of having to act as tellers for the “No” vote against their own motion in order for the vote to be able to go ahead at all. MPs voted 299 to zero to “pause and fix” universal credit, because Tory MPs did not vote, though the vote on an opposition day motion is not binding on the government.

Wollaston said voting with Labour would be the only way she could express her strength of feeling about flaws in the policy.

“If there is no way for me to express my view, on behalf of my constituents, that I think this fundamental flaw must be addressed before it is rolled out to the Totnes [Devon] constituency next year, I’m afraid I will have to vote against the government,” she said. “I hope the minister will give an assurance at the despatch box so I don’t have to.”

Others spoke of their concerns but did not defy the whip. Tory MP Heidi Allen, who has been one of the party’s most outspoken participants in the debate, said it was “probably too ambitious to expect a response just yet” but added she hoped the prime minister would reconsider the system ahead of the next rollout in January.

“As well as being the smart thing to do, it’s the compassionate thing to do,” she said. “To pull ourselves out of debt, we should not be forcing working families into it.”

Conservative MP Peter Aldous was among those who did not rebel but expressed acute reservations about the rollout, saying the DWP should “proceed with caution. They must not stick rigidly to a preconceived timetable”.

He told the Commons there had been “significant problems” with the rollout in his Waveney [Suffolk] constituency. “The long delays before some claimants receive the payments must stop,” he said.

After the final votes were announced, speaker John Bercow appeared to signal some discomfort with the way the government had whipped its MPs not to take part.

“If you choose not to take part and vote you can’t say, ‘well, we didn’t lose’” he said. “A minister from the government should come to the House and show respect to the institution and say what it intends to do. This institution is bigger than any one party and is bigger than any government.”

Shadow work and pensions secretary, Debbie Abrahams, said the vote was “a major defeat for the government on their flagship welfare reform programme” but condemned the Tory MPs for abstaining on the issue.

“Conservative whips and the prime minister have spent the day strong-arming Conservative MPs to vote against a pause of the rollout of universal credit, while the secretary of state has retreated on various aspects of his universal credit policy in a panicked attempt to appease Tory MPs who know this policy is not fit for purpose,” she said.

“Yet again the prime minister and the Tories cannot command a majority in the House of Commons. The prime minister is in office, but not in power.”

Opening the debate in the Commons, Gauke admitted he had seen people who had had long delays in receiving payment, but said the DWP could make emergency payments in three days, though the funds must be repaid.

“I have seen the hard cases of people who have apparently gone weeks and weeks and weeks, sometimes months, without support,” he told the Commons. “What we are saying is, they can get that advance quickly.”

Gauke, whose speech was constantly peppered with shouted objections from the packed Labour benches, said universal credit was “working and the rollout will continue and to the planned timetable.”

At prime minister’s questions earlier in the day, Theresa May also dismissed calls for a pause in the national introduction of universal credit to address problems with the system, but said the decision to scrap charges for a claimants’ phone helpline showed ministers were listening.

Corbyn said the system was “in a shambles” and arguing that the gradual extension of universal credit to new areas should be halted for a period. “The fundamental problems of universal credit remain: the six-week wait, rising indebtedness, rent arrears and evictions.”

May said that while removing the charges was necessary, universal credit was “a system that is working” and would be introduced on schedule. “I said last week that we were listening to a number of proposals that had been made, and we have done that,” she said above a chorus of jeers from Labour MPs.

“I think it’s right to have done this now, because there’s a lot of emphasis, a lot of publicity around universal credit at the moment. I want people to know that they can ring in, that they can get their advice, and that they can do that without being worried about it.”

The Labour leader replied by saying “a very long list of people” had urged a pause, including Citizens Advice, the Trussell Trust food bank charity, and Sir John Major, as well as “two dozen of her own backbenchers”.

Charities welcomed the abolition of the phone charges but reiterated that they wanted to see universal credit improved more generally. Citizens Advice said urgent action was needed to mitigate hardship caused by delays, and the Child Poverty Action Group said issues with the policy were “not teething troubles but deep-seated problems that require a proportionate response.”

Gauke announced the phone line change at a hearing by the work and pensions select committee on Wednesday morning. He said the universal credit helpline was an 0345 number, charged at local rate and was not a premium-rate charge, but in the light of the concerns raised he had decided to change it to a freephone number.

“It has been DWP’s longstanding position to operate local line charges for benefit inquiry lines, but having reviewed this matter more widely I will be extending freephone numbers to all DWP phone lines by the end of the year,” Gauke said.

Summing up the debate on Wednesday night, DWP minister Damian Hinds said discussions on how to improve universal credit would go on and that the government had heard the concerns, without conceding any changes. “We will continue to work actively with colleagues,” he said, adding that there would be “further progress updates in the week ahead.”







What is universal credit?


Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political divide, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits.


How long has it been around?


The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule.


What is the biggest problem?


There is a minimum 42-day wait for a first payment endured by new claimants when they move to universal credit (in practice this is often up to 60 days). For many low-income claimants, who lack savings, this in effect leaves them without cash for six weeks. The well-documented consequences for claimants of this are rent arrears (leading in some cases to eviction), hunger (food banks in universal credit areas report striking increases in referrals), use of expensive credit, and mental distress.


Are there other problems?


Plenty. Landlords are worried about the level of rent arrears racked up by tenants on universal credit. Unchecked, this will lead to a spike in evictions. Claimants complain that universal credit is bafflingly complex, unreliable, and difficult to manage, particularly if you are without internet access. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit.



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