Bishop of Durham calls for urgent changes to “flawed system” of universal credit

On 16th November 2017 the House of Lords debated a motion from Baroness Hollis of Heigham “That this House takes note of the impact of Universal Credit on claimants.” The Bishop of Durham, Rt Revd Paul Butler, spoke in the debate:

The Lord Bishop of Durham: My Lords, I, too, congratulate the noble Baroness, Lady Hollis, on securing this debate and on her introduction.

Universal credit originally set out to simplify a fragmented, complex system and to reduce poverty through the simple, noble philosophy of making work pay. While it still has the potential to transform this ​broken system, its current shape risks undermining these two core objectives for the neediest in the nation and thus failing British families. Almost every week, I receive heart-breaking stories about how the transition to UC is devastating the lives of claimants. What does the five or six-week waiting period, which is often longer, actually look like for a family or single parent with young children?

One young mum visits St Aidan’s church kitchen in Hartlepool with her disabled son. She was moved on to universal credit and waited seven weeks for her money. She told one of my clergy that she took paper napkins from McDonald’s because she was unable to afford toilet paper. Her son’s condition means that he wears nappies, which she was also unable to afford. Can any of us here imagine the stress and indignity of such a situation? Despite now receiving her money, the majority of her payments go towards her rent arrears, so she is still dependent on St Aidan’s for a meal and food each week. Her story is one of many I hear of families and individuals falling down a slippery slope of rent arrears, personal debt, eviction and homelessness.

It is too simplistic, however, to say that UC alone pushes families into debt. In many cases it exacerbates existing personal debt, and makes that debt almost impossible to escape. This is particularly acute in the north-east. In Hartlepool, Gateshead and County Durham, more than 30% of adults are indebted and at least three months behind with their bills, compared to a national average of 18%. This will only intensify as payday loan sharks and doorstep lenders increase their work and their profits.

Advance payments are designed to give financial support through the waiting period. The fact that over half of all claimants on universal credit are now asking for these payments, however, shows a system that is flawed. These payments are loans that must be repaid. Citizens Advice Newcastle reports that one in three of the claimants they meet waits more than six weeks, and one in 10 waits more than 10 weeks, for their first payment, forcing over half of claimants to borrow money. Such arrangements perpetuate a cycle of household debt and dependency—the very thing that UC set out to combat. Something must be done to ensure that during this time claimants can meet the basic costs of rent, childcare and food for their family.

As the noble Baroness, Lady Meacher, mentioned, a specific problem which causes further delays for many new claimants is when they lose their job and receive their final pay in arrears. If this final payment comes in during the assessment period, their first UC payment is reduced accordingly, so they will have to wait another four weeks—at least 10 weeks in total—before getting their full UC entitlement. It is ironic that a system based on paying people in arrears is unable to deal with people being paid their wages or salaries in arrears. Will the Minister say whether and when this problem will be rectified?

By focusing on the short-term impacts of UC, we risk missing the longer-term picture. The decision not to uprate the main elements of UC in line with inflation means that around 400,000 more children will be in poverty, according to estimates by the Joseph Rowntree Foundation.​
Had I more time, I would also have discussed the cuts to work allowance and why the taper should be not at 63% but at the original proposed 55%. These cuts are further undermining the most fundamental objective of universal credit: to make work pay.

Finally, I draw your Lordships’ attention to another longer-term facet of UC: the two-child limit. I believe that this will not reduce poverty or make work pay but will be responsible for another 200,000 children living in poverty. Larger families stand to lose almost £3,000 annually for each child beyond the first two. The majority affected are working families, many of whom had children before the policy came into being. What kind of message about the rewards of work does this send to British families? I speak both from my own Christian tradition and also on behalf of the Jewish and Muslim communities, who recognise that children are a blessing and not a burden. We hold that the third, fourth or fifth child is no less precious than the first.

Recent IFS projections anticipate that, in the next five years, the north-east will witness the biggest rise in child poverty of all UK regions—from 28.2% to 39.7%. That is a rise of 11.5%, compared with the UK average of 6.8%. A gulf appears to exist between those of us who make policy decisions and those for whom they are designed. I beseech the Minister to listen not necessarily to us but to the claimants and to some of the staff in the jobcentres, who tell us that we are not succeeding with the original intent. Please keep and return to the original intent of UC—to make work pay and reduce poverty—and recognise that its current rollout is not producing the desired results for the most needy in this country.


Baroness Sherlock (Lab)…The noble Baroness, Lady Stroud, described what universal credit was meant to do. Of course, in that conception, it was a much more generous system. It had a 55% taper; it had more support; it had full universal support; it was a very different creature. We have to work out what is happening now, but it has been subject to repeated cuts from the Treasury, a point made by many noble Lords, including my noble friend Lord Livermore in a very powerful speech, the right reverend Prelate the Bishop of Durham, the noble Lord, Lord Low, and many others. We have heard many noble Lords demolish the idea that universal credit, as it is now constructed, always makes work pay: it clearly does not, and we need to get to a place where it does. My noble friend Lady Hollis made that very clear….It is not working. We have heard descriptions of chaos, failing systems and problems. This has to stop. The problems with housing, mentioned by the noble Lord, Lord Kerslake, my noble friend Lady Warwick and others should be enough to ensure that it does. My noble friend Lady Andrews described the problems in Wales and other parts of the country, as did the right reverend Prelate the Bishop of Durham. I worry that the Government have not realised how serious this is.


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