Work and pensions secretary Esther McVey admitted yesterday (October 11) that Universal Credit (UC) will make people worse off – as pressure increased on the government for it to be scrapped.
McVey told the BBC that the Tories had made “tough decisions and some people will be worse off” under the all-in-one benefit system, which will usher in nearly £3bn of welfare cuts.
Last week it was reported that McVey privately admitted to the Cabinet that UC will leave half of all single parents and a two thirds of couples with children £200 a month worse off.
McVey’s worrying disclosure comes after the Trussell Trust charity said food bank usage had increased by 52 per cent in areas where Universal Credit has already been rolled out.
This week former Prime Ministers Gordon Brown and John Major both voiced their concerns about UC, with Brown saying the system is “cruel and vindictive” and could push a record 5m children below the poverty line.
While the government shows no sign of heeding the warnings coming from allies and opponents alike, Labour said it will scrap Universal Credit.
On Sunday, shadow chancellor John McDonnell said, “I think we are moving to a position now where it is just not sustainable. It will have to go.”
UC, which replaces a host of individual benefits with one payment, will begin to be rolled out on a nationwide scale next year and is scheduled to replace the current benefits system by 2023.
It is the brainchild of former work and pensions secretary Iain Duncan Smith who said UC would “make work pay” when he launched it in 2003.
The idea of a single combined benefit was met with praise when it was first mooted, however billions of pounds of Tory cuts to welfare have made the system unworkable, with the National Audit Office saying in June that UC isn’t “making work pay” and may never be value for money.
According to Department of Work and Pensions figures, three quarters of UC claimants struggle to pay bills, while rent arrears in two trial areas rocketed to £115 per person.
The DWP’s own research also found that the cruel benefit sanction regime that is a major part the system fails in its purpose to encourage people on low wages to earn more money.
Head of Unite Community Liane Groves said UC might have began as a benign idea but combined with Tories’ assault on benefits “has morphed into a misery causing monster”
“Concerns about the damage it is doing are being raised across the political spectrum, including from within Theresa May’s own party and two former Prime Ministers,” Groves said.
“The government cannot continue to plough on ahead with Universal Credit in the face of all the evidence that it is punishing people – including children – and pushing them into penury and despair.
“Nor can they ignore their own study that shows the benefits sanctions that are part and parcel of Universal Credit do no good whatsoever. It is clear the system is so compromised as to be irredeemable and needs to be scrapped.”