Universal Credit (UC) was supposed to produce a simpler and more effective system. In reality it is a front for deeper benefit cuts. Esther McVey, the work and pensions secretary in charge of the scheme, confirmed last week that families will be poorer under UC. She did not deny reports that millions of families could be up to £200 a month worse off when it is fully rolled out. In some parts of the country where UC was already in place, food bank usage has risen 52 per cent.
Universal credit is a textbook example of how not to reform public services. When the Tories returned to power eight years ago, they commenced sweeping changes to welfare by merging six working-age benefits into a new single credit. The theory was that the simplicity and real-time data of the universal credit would ensure people were always better off in work. Unlike the old system, there would be no perverse incentives; claimants would no longer have a financial advantage to be on benefits.
The reality, however, is far different. The chairman of the Commons work and pensions select committee has described the UC project as a “shambles, leaving a trail of destruction”. In its assessment this year, the National Audit Office doubted whether the system would ever deliver value for money. It is also behind schedule. Under the initial plans, all 8m Britons receiving benefits were due to be moved to UC by October last year. Then the reforms were projected to be complete in 2022. Now that target is looking increasingly unlikely.
Just over a million Britons currently claim under universal credit and the national roll-out is due to speed up in 2019.
Politicians, of all stripes, are calling for getting nervous. From former prime minister Gordon Brown to Tories Jacob Rees-Mogg and Johnny Mercer, they are demanding that the government pauses and reconsiders the national roll-out. John Major has even warned that UC could lead to a repeat of the poll tax debacle of the early 1990s, which saw serious riots against the Tory government.
Pat Harrington, general secretary of Solidarity commented: "I welcome the fact that the Labour Party has withdrawn its support for Universal Credit. They are right to call for a “root-and-branch review” of social security. Social policy is lagging behind technological advances and the consequences of that. We need to look at basic income rather than welfare payments in the coming age of Artificial Intelligence and Robotics. We need, as a society, to look at ways of sharing wealth fairly not taking from those most in need."