Prime Minister's Questions, factchecked

Published: 18th Oct 2017

Prime Minister’s Questions today ranged from: the new unemployment figures (4.3%, the lowest since 1975); debt among young people; spending on housing; and what the recent OECD report said about the UK economy.

Is there a long list of people urging a pause on Universal Credit?

“There is a very long list of people urging the Prime Minister to pause Universal Credit, including Citizens Advice, the Trussell Trust, John Major and, I understand, two dozen of her own Back Benchers.”

Jeremy Corbyn, 18 October 2017

Universal Credit is attempting to simplify lots of different social security benefits into one. It’s a complicated project that will affect 7 million people and there have been many difficulties. It is now five years behind schedule.

Citizens Advice called for a pause in the universal credit roll out in July, and this has since been reiterated.  

The Trussell Trust also called for a pause in September.

John Major wrote a piece in the Mail on Sunday on 7th October, suggesting that the Conservative Party review Universal Credit:

“And we must demonstrate a clear priority for the interests of the ‘have-nots’. I hope such a programme will include a review of universal credit, which, although theoretically impeccable, is operationally messy, socially unfair and unforgiving. It is time for the Conservative Party to show its heart again, which is all too often concealed by its financial prudence. We are not living in normal times and must challenge innate Conservative caution.”

Concerns from a dozen Conservative back benchers were raised in a leaked private letter to David Gauke at the end of September, reportedly calling for the rollout to be slowed.

According to the Telegraph this was led by Heidi Allen and signed by ‘around a dozen’ other MPs.  The letter has not been made publically available. On the 8th October, the Telegraph reported that that the number of opponents had risen to 25.  We have asked Ms Allen’s office to confirm.

Are more people being paid an advance on their Universal Credit?

“The figures show that the performance in getting payments to people on time has improved substantially, and more people are getting advanced payments.”

Theresa May, 18 October 2017

Universal Credit is attempting to simplify lots of different social security benefits into one. It’s a complicated project that will affect 7 million people and there have been many difficulties. It is now five years behind schedule.

More people are receiving their first Universal Credit payment on time, as we discussed last week.

The share of people who were paid an advance on their first full service Universal Credit payment has also increased. It was 30% in May 2016 and 52% in July 2017, so over half of new claimants were paid an advance.

If someone can’t wait six weeks for their first payment they can apply for an advance, which they’ll pay back out of future Universal Credit payments.

How much can be advanced?

Advance payments range from less than £50 to over £600. They are most often around £100 to £200. They’re capped at 50% of the expected monthly Universal Credit payment.

The amount also has to be repayable within six months for new claims and twelve months for people transferring from other benefits.

Young people in record levels of debt?

“Young people are in record levels of debt. This week, the Financial Conduct Authority warned of a ‘pronounced build-up of indebtedness amongst the younger age group’ to fund ‘essential living costs’.”

Jeremy Corbyn, 18 October 2017

When it comes to all young people, it’s not possible to say if young people are in record levels of debt.

The official statistics we have suggest that the average debt for 16-24 year olds rose in the late noughties, but fell slightly between 2010-12 and 2012-14.

We can’t say for sure what has happened because this doesn’t account for inflation, or for possible error in the survey the statistics come from. We don’t have any more recent figures than this.

Mr Corbyn’s office pointed us to analysis by the Institute for Fiscal Studies about the debts of English graduates to back up this claim. The report says that English graduates have the highest student debts in the developed world. At over £50,000, the average debt on graduation is more than double what it was in 2011 before the large increase in tuition fees in 2012.

About half of young people study at university level in England.

The chief of the Financial Conduct Authority told the BBC earlier this week:

"There is a pronounced build up of indebtedness amongst the younger age group," Mr Bailey said.

"We should not think this is reckless borrowing, this is directed at essential living costs. It is not credit in the classic sense, it is [about] the affordability of basic living in many cases."

He also said "There has been a clear shift in the generational pattern of wealth and income, and that translates into a greater indebtedness at a younger age”.

The Financial Conduct Authority told us these comments weren’t based on one piece of research or set of data in particular.

A survey published by the Authority today found 18-24 year olds had the lowest level of financial resilience, and that 55% had unsecured debt including student loans. This is the first time it has done this survey so there is no comparable data.

Is the UK economy in the slow lane?

“Under this Prime Minister, we have a weak economy. UK growth is currently the worst amongst the 10 largest EU economies.”

Jeremy Corbyn, 18 October 2017

 “The UK experienced the slowest growth (0.3%) among European and Group of Seven (G7) countries” from April to June this year, according to the Office for National Statistics.

“This is the second consecutive quarter in which the UK has had the weakest economic growth of these countries, as during Quarter 1 (Jan to Mar) 2017 the UK experienced 0.3% growth, joint slowest with Japan and the USA.”

The Labour Party told us that Mr Corbyn’s claim came from a Guardian article. The article says the UK had the slowest growth in the whole of the EU, not just the among the ten biggest EU economies, according to official EU figures, but the figures were for January to March this year.

We can also measure growth over the course of a whole year, comparing the size of the economy in the latest quarter to the same quarter from the year before.

The UK’s growth in the last year stands at 1.7%. This is higher than Belgium’s (1.4%) and Italy’s (1.5%), but lower than the other seven top-ten EU economies, according to EU figures.

UK economy; what was the OECD's verdict?

“The OECD says about the United Kingdom:  we have the most efficient, accessible healthcare system, fiscal sustainability has improved, important steps have been taken to improve educational outcomes, and jobs and earnings are good. That’s what the OECD says about the strong economy under this Conservative government.”

Theresa May’s claims seem to be drawn from an October 2017 report by the OECD into the UK economy. We’ve asked the Department of Health for more information.

The report assesses many aspects of the UK economy in order to give an overall picture. This means that quoting small parts of the report does not tell the whole story. For instance, whilst they recognise the UK’s low unemployment rate, they also recognise that growth is slow in 2017.

Overall, the OECD considers UK economic performance to be “solid” up to the end of 2016.

Healthcare

The OECD says that the UK’s healthcare efficiency is weak. The OECD measure this by comparing how efficiently UK healthcare works compared to the best performing countries. We’ve asked the Department of Health for more information.

Fiscal sustainability

Fiscal sustainability looks at whether government spending can be maintained in the long run and it can continue to pay its debts.

The OECD report says: “Fiscal sustainability has also improved, with the budget deficit falling towards 3.0% of GDP and public debt stabilising at below 90% of GDP in 2016.”

The budget deficit (the difference between the government’s income and spending) has been falling since 2010/11. Public debt has risen significantly since the recession, but has recently stabilised just below 90%.

Education

The report says that “Important steps have been taken to improve the educational outcomes and basic skills of disadvantaged students.”

However, it has a number of criticisms including that “low basic skills in the United Kingdom prevail across all education levels, and the percentage of young adults with low basic skills is higher than in the OECD” and it says higher child poverty could “increase the number of children whose disadvantaged background affects their educational chances”.

Jobs and earnings

The OECD does also say that “jobs and earnings are good”.

They also say that “low-skilled workers in the United Kingdom have comparatively lower earnings than low-skilled workers in other G7 countries, and the effect of higher skills proficiency on wages is particularly important in the United Kingdom.”


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