Debate contribution: Universal Credit: Five-week Wait

Debate contribution by Mr Mark Durkan on 11 February 2025.

MLA

Mr Mark Durkan

Party at the time

Social Democratic and Labour Party

Date

11 February 2025

Type

Debate contribution

Business

Private Members' Business

Heading

Universal Credit: Five-week Wait

Assembly identifier

Official Report component 4793399

Read the official Assembly record

Text

I beg to move

Thank you, Mr Deputy Speaker. I rise to propose this motion on the universal credit five-week wait and its inextricable links with illegal moneylending, another hook that paramilitaries — organised crime gangs — use to tighten their grip on our communities. It is a quiet, untold threat that preys on vulnerability and desperation, emboldened by the disaster that has been welfare reform. The universal credit system was supposed to support the most impoverished and in-need households; instead, the five-week wait leaves those who already struggle to make ends meet in a state of panic over how they will cope. It is not only debt-inducing but dangerous. It is a gateway for loan sharks to step in and offer a way out with no credit checks or paperwork, just a promise of fast cash. Once fear and intimidation take hold, victims are understandably reluctant to come forward. That reluctance suggests that the issue is far more widespread than is reported. What we know comes from the brave individuals who have told their stories. Those stories often follow the same pattern, with the same shame and fear attached. In my experience, the issue disproportionately impacts single mothers. I see parents who have exhausted all avenues of support turning to my office to seek help with food vouchers or emergency financial support. A cuppa while they wait and a general chit-chat around the cost of living inevitably breaks down barriers, and people begin to talk. They tell a tale of desperation, which often begins with receiving a migration letter informing the individual that they should apply for UC before said date or risk losing their benefits. The letter, currently focusing on those in receipt of tax credits and mostly young families, fails to mention the five-week wait, nor does it direct claimants to relevant support. That realisation normally comes post application, as worried parents scramble to cover costs. Typically, front-line UC staff offer an advance, which needs to be repaid, but the contingency fund is not routinely mentioned. Most people whom I have spoken to were completely unaware of its existence. It is clear that the current framework is inaccessible and fails those whom it is supposed to support. Yesterday, I spoke on the carers motion and said that it was not perfect. My motion today is not perfect either, so I welcome the amendments. I am glad that we have the motion on the Floor for debate. I am glad to see that the Alliance amendment, which we will support, calls for the renaming of the contingency fund, which will ensure that those who need it can find it. However, renaming alone is not enough.

I thank the Member for his intervention. The Department and its staff must do more to promote the fund, update guidance to expand its use and increase the budget to ensure that it achieves its intended purpose of helping those struggling with the five-week wait. Backdating UC, particularly for care leavers or those missing out on three or more weeks of housing benefit, is important. However, if the contingency fund were strengthened and amended effectively, it could help to reduce the need for backdating. Whilst today's focus is on the five-week wait, I would like to see funding restored for both the contingency fund and the social fund, which has seen support fall by 60% in just four years. That reduction forces more people towards high-cost illegal lenders. What is even more worrying than the invisibility and inaccessibility of the contingency fund is the apparent indifference of the Minister. When I asked him about addressing the five-week wait and his Department's research into debt, poverty and illegal moneylending, he referred me to an answer from a year ago. Not only has research not been conducted but there appear to be no plans to address it, although that is very much in keeping with the Public Accounts Committee (PAC) report on welfare and poverty, which highlighted concerns that Ministers and the Department for Communities appear to be too far removed from the experience of those impacted by welfare policies. Not only are we in danger of creating bad policy that destroys lives, it also demonstrates a lack of understanding of the damage being done. Later today, the Minister will give a statement on tackling benefit fraud. Whilst I am sure that we will all support attempts to prevent people from abusing the system, what will the Minister do to stop the system abusing people? We look forward to statements from the Minister on tackling error in benefits as well and maybe from the Government in London on tackling tax evasion and avoidance, which cost us billions. Meanwhile, half of UC claimants struggle to afford food and bills during the waiting period. The Trussell Trust has repeatedly stated that the wait is a key driver of food bank use that pushes millions of people into crisis. It has led to acute and immediate financial hardship and worsened households' longer-term financial resilience. That is the reality of the erosion of social welfare under welfare reform. What was once a safety net is now full of gaping holes, allowing people to fall into the jaws of predatory loan sharks. We have only scratched the surface of the issue. Alarmingly, research by Ulster University has shown that, while fear is one obstacle to getting reliable data on illegal moneylending, another is that the practice is so commonplace here that it has become unremarkable. Research shows that 43% of victims of loan sharks said that they had been abused, threatened or physically harmed as a result of taking a loan. A third of them had considered taking their life. We cannot afford to ignore the issue.

I am also deeply concerned about the impending managed migration of employment and support allowance (ESA) claimants to universal credit. ESA supports those who are unable to work because of illness or disability. They are some of society's most vulnerable individuals and are arguably the least well equipped to navigate the transition and the most at risk of exploitation by illegal moneylenders. How will they be protected? When I raised concerns with the Minister last month, he advised that people affected by illegal moneylending should simply seek support from Advice NI. Advice NI is a fantastic organisation, but the advice sector is already overwhelmed. How will the Department support that sector to ensure that it can support people? We call for the establishment of a working group —.

I will run out of time. Sorry. We call for the establishment of a working group that brings together Departments, the PSNI, the advice sector, financial institutions and credit unions with input from those with lived experience. We want to see the immediate renaming and reform of the contingency fund, targeted investment and solutions to eliminate the five-week wait. In the short term, there should be collaboration on a leaflet to be included with every managed migration notice, ensuring that claimants are fully informed about the five-week wait and the risks of illegal moneylending and are signposted to appropriate support. That should be an easy enough ask. Such a leaflet would also be useful to people who are allocated new homes. In my constituency, I have seen organised crime groups, gangs or paramilitaries go from door to door in new housing estates offering to lend people money to furnish their home. "What would you do?" is the question that I am asked time and time again. People tell me, "I was paying back numerous loans already. I had no gas in the meter. I had used emergency credit on my electricity, and an answer came knocking. I had no idea what I was getting myself into. What would you do?". I therefore ask the Minister this: what will you do? Resolving the issue requires cross-departmental working, but the first step begins with you, Minister. People should not be forced to live in fear in order to make ends meet. I commend the motion to the House.

1,341 words. Text as published by the Northern Ireland Assembly.

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