The Labour party have announced plans to radically reform universal credit (UC) before scrapping it altogether, if they win the next election.
Benefits proposals being put forward by the party include:
- Removing the 5 week wait for a first payment of UC and making an interim payment after two weeks
- Ending the requirement to claim UC online
- Hiring an extra 5,000 advisers to help people unable to make an online UC claim
- Scrapping the two child limit, the benefit cap and the bedroom tax
- Ending benefits sanctions
- Abolishing the DWP and replacing it with a Department for Social Security
According to Margaret Greenwood, shadow secretary of state for work and pensions:
“In an act of profound neglect, this uncaring government is pressing ahead with the roll out Universal Credit. This is despite the DWP’s own research that shows that nearly eight out of ten of those moving to Universal Credit are struggling with their bills.
“The Tories aren’t going to back down on this, but I am proud that the next Labour government will scrap Universal Credit and replace it with a social security system designed to end poverty, based on principles of dignity and universalism. The next Labour government will take action immediately and end the worst aspects of Universal Credit and abolish the two-child limit, which under the Tories is set to push up to 300,000 more children into poverty by 2024, and end the five-week wait.
“Labour will immediately suspend the Tories’ punitive sanctions regime that has eroded trust in the social security system and people’s right to support. Instead, we’ll replace it with a new system that emphasises tailored support, rather than meting out rigid requirements and punishments when they are not met.”
The Institute for Fiscal Studies, commenting on the proposals argued that they stop short of scrapping UC:
“The proposals specified today would, compared to current policy plans, top up the incomes of a significant number of low-income households – in some cases by £1000s per year. They do not, however, amount to anything close to a scrapping of universal credit. If that is ultimately the intention then we have yet to hear anything about what that would mean.
They went on to say, however, that the changes would improve the lot of hundreds of thousands of claimants:
“Reversing the two-child limit in means-tested benefits would mean that, in the long run, about 700,000 households with children would be better off than they would otherwise have been, by an average of £3,000 per year – implying a cost of about £2bn per year.
“Abolishing the benefits cap would benefit approximately 100,000 working-age families by an average of roughly £2,000 per year, costing around £200 million per year. The winners would be mostly people with several children or high housing costs, or both.”