Carmichael raises farmer concerns over Universal Credit transition in Parliament

Orkney and Shetland MP, Alistair Carmichael, has today in Parliament raised concerns about the impact of ongoing changes to the benefits and tax credit system for farmers and crofters. Speaking in a debate led by Wendy Chamberlain MP on Universal Credit and Farmers, Mr Carmichael noted issues with a “one-size-fits-all” approach given the variable income of farmers, and called for greater flexibility.

The old benefit system, which was calculated on a yearly taxable profit basis, is being replaced by Universal Credit, under which households are assessed on their monthly income. Farmers and crofters are more likely to be penalised by this change, given their incomes vary dramatically over a year. The income of farmers is largely governed by the seasons, price volatility, input costs and weather conditions, meaning that their profitability can only be measured over an annual timescale or longer. Ministers have also indicated that farmers will also be expected to meet with “work coaches” according to the Universal Credit system rules.

Speaking in the debate, Mr Carmichael said:

“Like her, I too have had correspondence with the government on this. The sheep farm example is a very good one. That sheep farmer will have income possibly in the autumn from the sale of sheep, possibly from the basic payment, and possibly from something like the Less Favoured Area Support Scheme. There might be a small wool cheque sometime late summer or early autumn, but apart from that – that is the income that comes. That then has to be spread and harvested throughout the year.

“That is the reality for the sheep farmers to which she refers, and it just shows the virtual impossibility of shoehorning that into a Universal Credit scheme, that looks at things at a monthly basis.”

Responding, Wendy Chamberlain MP said:

“I’m grateful to him and I think what he has illustrated is part of the challenge here. What we are finding is that when that income spike does happen, that is the very point at which farmers are losing the benefit to which they should be entitled.”

Speaking later in the debate, Mr Carmichael added:

“I’m sure we can all play a role in ensuring that this transitional relief is understood, and the importance of returning the form; doubtless the NFU and others will do that too. The difficulty I have though is that even at the end of that transitional period, I don’t see what – in that farming business model – is going to have changed. You are still going to have people with income coming in significant sums, but at small points in the year. At the end of the transition we are still going to be where we are today. That is not going to change; if there is going to be change it has to come from the Universal Credit System.”

Responding for the government, the minister of state for the Department of Work and Pensions, Jo Churchill MP said:

“I thank him for his comments and if he’ll allow me I’ll come on to those. I would also gently say that he comes from a very tourist-driven area, and those incomes fluctuate, and we expect those individuals to switch over to Universal Credit [as well].”

Reacting after the debate, Mr Carmichael said:

“This appears to be one of those rather nonsensical “computer says so” arguments that we have all become used to from the government. Ministers expect farmers on Universal Credit to have “work coach” meetings regularly because that is what Universal Credit requires, even though it makes no sense to expect farmers to be seeking other work in the same way as other people would.

“Officials hate exceptions to the rules but this is a case where “one-size-fits-all” really does not fit. This will affect farmers and crofters in the isles in a way that is entirely counterproductive to our needs – we need to see a rethink.”