Universal Credits and the Nationalisation of debt: Let’s not let Harry’s past be our future

Following the death of the late, great historian, RAF veteran, author and champion of socialism Harry Leslie Smith. Now more than ever, is a time to call for more empathy in British politics. Harry Leslie Smith powerfully wrote for the Independent on Christmas Eve last year, divulging into What Christmas was like for his generation during the Great Depression.

Harry explains – “When Christmas morning came that year, I awoke like too many children across Britain, with hunger in my belly and the realisation that there was no Father Christmas for the poor. I remember crying in anger and desperation. My dad tried to calm my agitation as best he could by hugging me and saying: “Go into my trouser pocket. It’s not from Father Christmas and it’s not much, but it is from thy dad.”

Mr Smith has time and time again has pleaded with citizens: ‘Don’t let my past be your future’. However, the Guardian on Sunday identified that more than 100,000 children in the UK this year likely are likely to face Christmas hardship. The primary reason being the poorly designed Universal Credits system and it’s feature of payment in monthly arrears – intended to mirror the world of work. This system is cruel and illogical.

Although statistically true that most people in work are paid in monthly arrears, this statistic is disproportionate to the demographic whom are most likely to claim Universal Credits. Therefore rather than fulfilling the governments underlying objectives of changing the benefits system to transform the culture of claimants, the 5-6 week assessment period following application simply means that many tenants are left helpless, without the income required to pay their rent in the first 6 weeks of transition, leading to the accumulation of debt in the form of rent arrears.

Such flaws have been identified within the Housing Plus Academy Think Tank on ‘Universal Credit and its impact on communities – how can we help? The summary of the Think Tank’s findings state that:

“The wait for a first payment had severe and immediate consequences: 70% of respondents found themselves in debt, 57% experienced issues with their mental or physical health, and 57% experienced housing issues.”

The effects of the waiting time are particularly relevant this Christmas, given that claimants who signed up after 20 November will not receive any benefit until after the festive period because of the built-in wait of at least 35 days for a first monthly payment, the Peabody Trust said. Therefore, families and parents are left to struggle and borrow, only increasing their accumulation of debt further, to avoid their children facing a Christmas day such as that faced by Harry Leslie Smith.

According to the Guardian, a Department for Work and Pensions spokesperson said: “There’s no reason for people to be without money over Christmas because advance payments are widely available. Anyone applying for Universal Credit can get an advance of up to 100% upfront, payable on the same day if someone is in urgent need.” Whilst, in the last week, Justin Tomlinson, the junior work and pensions minister, described how poor families could simply just take in a lodger to beat the benefit cap. Such comments by people occupying prominent roles in government and civil service demonstrate a complete lack of empathy and understanding within British Politics. How is it, that the worst off within our society are being blamed for the failings of a system?

These comments are also ignorant. Anya Martin, quoted in the Guardian, describes how despite advances being made available to claimants, it simply means that ‘people are then having to use their benefits to repay the government’s advances’. The government made welcome changes in the budget, reducing the maximum percentage of income that could be used to repay advances to 30% from its original 40% yet that remains too high. The government through the Universal Credits system are creating a debt culture; they have created the debt within the policy and then administer advances in response, thus nationalising the whole process. The nationalisation of debt.

In addition, such failings are also relatively easy to solve. An adoption of the system the Scottish Government are currently trialling that provides the option of two monthly payments, therefore two week arrears rather than monthly. This would help to alleviate at least some of the financial burden on claimants by reducing and in some cases possibly preventing the accumulation of debt and the intense stress that comes with it, particularly at Christmas time.

The Universal Credits system requires further investment now more than ever in order to help families avoid such hardship this Christmas.

And so, now is the time to remind you that austerity is a political choice and not an economic necessity. I believe that this system can in fact be saved with increased funding from the Chancellor of the Exchequer and has the potential to improve the lives of many citizens if the necessary improvements are made alongside more efficient implementation. Without such improvements, many will continue to suffer.

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