The Tory minister in charge of Universal Credit has claimed he’s seen no evidence the five-week wait pushes people into debt.
Appearing at Parliament’s Work and Pensions Committee today, Will Quince was told research showed people on the combined benefit were 70% more likely to be in rent arrears than people on old-style Housing Benefit.
The research was from Citizens Advice, which helps run the Help to Claim service, chair Stephen Timms said.
Mr Quince said he would need to see evidence for that, “not just anecdotally but some actual data”.
He added: “The evidence we have is that it’s people coming on to Universal Credit with historic rent arrears which actually get paid off faster over time on Universal Credit,” he said.
“There is not evidence to suggest, as far as I’ve seen … that suggests that people are building up rent arrears while on Universal Credit.”
Labour MP Stephen Timms, who chairs the committee, noted a National Audit Office report which suggested, in fact, that arrears tend to increase when people are moved on to Universal Credit – and this was exacerbated by the five-week wait for the first payment.
The NAO report last week declared the standard wait for first payment “can exacerbate claimants’ debt and financial difficulties” – despite people being able to take out an advance.
Yet Mr Quince replied “people don’t have to wait for a first payment” because they can get an advance, which is paid back out of people’s benefits over 12 months.
He added the standard allowance in Universal Credit has been increased by £20 a week in 2020/21 due to the pandemic.
Mr Quince insisted the five-week wait was fundamental to the Universal Credit system.
Anyone axing it would have to “start again” with a new benefit regime, he claimed, suggesting it could be reduced by a few days if BACS bank payments are reformed – but no further.
And UC director-general Neil Couling warned replacing advance payments with a grant could become a “honeypot for foreign criminals”.
But Mr Quince became embroiled in a furious row after he blamed “scaremongering” for people not getting their money quick enough.
He said: “Some of the scaremongering around Universal Credit does put people off.
“Some of the scaremongering doesn’t help and it puts people off checking their eligibility and applying for Universal Credit at the point they become eligible.
“If they leave it far too late until the point at which they’re in crisis, even an advance payment or a grant… wouldn’t actually cut it.”
Labour MP Neil Coyle hit back: “He suggests some people are ‘scaremongering’ for presenting the facts about Universal Credit.
“When people present facts of real people’s lives, people forced into prostitution and made homeless as a result of Universal Credit, it makes him look beyond pompous.”
The minister snapped: “I’ve been called many things – pompous isn’t one of them, so there’s a first.
“In sharing facts comes responsibility to share context.
“Context is important, and the reality as we know… is people are delaying their claims.
“We think there are numerous reasons why, but in part it’s because there are some people that are scaremongering about Universal Credit.”
SNP MP Chris Stephens said: “The five-week wait and advance payments are needlessly pushing people into hardship – and either leaving many households waiting for weeks or months before they can get support or pushing them into, or further, into debt.
“It is astonishing, and quite frankly shameful, that the Tories are denying this – and almost beyond belief that they then tried to pass the blame for the hardship their policy is causing onto the claimants themselves. It shows how completely out-of-touch the Tories are with reality.
“We know this issue could be easily fixed by implementing the SNP’s proposals to turn advance payments loans into non-repayable grants after a claimant has been deemed eligible.”
And he noted Ian Duncan Smith, the architect of the system had admitted the five-week wait was a political choice, and “not an operational issue.”