Labour leader Jeremy Corbyn suggests he could scrap hated 'streamlined' benefits system if voted into power.
Progressive bodies from unions to thinktanks across the UK have broadly welcomed the announcement that Labour would reform Universal Credit — although most agree that how this is done is critical.
Mark Serwotka, general secretary at civil and public servants’ union PCS, agreed that Universal Credit (UC) has been “an unmitigated disaster”.
“It’s great news that a future Labour government will radically overhaul the social security system, scrap UC, and create 5000 new jobs in a new Social Security department,” he said.
Serwotka said his members had done their best to try and make UC work for claimants, but the system needs investment and radical reform — which is something PCS has long called for.
“We look forward to working with a future Labour government to create a social security system that is humane, well staffed and that stops seeing claimants as a burden on society,” he said.
Unite, Britain and Ireland’s largest union, also welcomed the announcement, describing the current system as “cruel and miserable”. Liane Groves, head of community at Unite, said that although UC is meant to streamline the system, combining six welfare payments into one, the introduction was inherently flawed.
“It makes people wait five weeks without any money coming in. People, desperate to put food on the table and keep a roof over their heads, are plunged into a sea of debt from which they can never escape. This state-sponsored despair must cease,” Groves said.
“For tens of thousands, their lives have been made a misery by Tory ministers hell-bent on their austerity agenda, whatever the human cost.”
UC’s results have been highly publicised: long delays to claims pushing more people to use food banks, contributing to unacceptable levels of stress for claimants — in some cases allegedly leading even to suicide.
Unite has been campaigning for the reform of the system since its inception but given its manifold problems and the human suffering had already switched to calling for its end, the union indicated in a press statement.
A future system, according to Groves, should be based on principles of social justice, with the objective of ending poverty. First steps should give relief to those struggling with a new government committing to replacing UC as soon as it takes power.
Full details of what an incoming Labour government would do are yet to be made available beyond Corbyn’s “emergency reforms” ahead of any total replacement, however.
Economic analysis flags up need for detail
The Institute of Fiscal Studies (IFS) also reacted swiftly to the announcement, with researchers Robert Joyce and Tom Waters shining a microscope on the detail so far, likely benefits and overall costs.
They said that indicated reforms could, compared to current policy plans, top up the incomes of many low-income households – in some cases by £1,000s per year.
“They do not, however, amount to anything close to a scrapping of UC. If that is ultimately the intention, we have yet to hear anything about what that would mean,” the economists wrote.
“The part of the package announced 28 September that would have the largest direct impacts on household incomes are in fact nothing to do with UC reform, per se.
“The two-child limit and overall benefits cap are benefit cuts that took effect under the old benefits system and are simply being carried over into UC. Irrespective of whether UC continues, those cuts could be maintained or reversed.”
Joyce and Waters said that reversing the two-child limit in means-tested benefits would make about 700,000 households with children better off in the long run, by about £3,000 per year. This implied a cost of about £2bn per year.
“This is not to say that all those households would ‘immediately’ benefit. It is a cut that is being phased in gradually as families have additional children,” they said.
Abolishing the benefits cap would give about 100,000 working-age families an extra £2,000 a year on average. The main winners would be people with several children, high housing costs, or both. Cost ? About £200 million a year.
Labour also promised an extra payment at the start of people’s UC claims and a switch to fortnightly rather than monthly payments, targeting payment delays. Rents would be paid directly to landlords, and couple payments split between partners.
“These would make a real difference to some families. Nevertheless, while they constitute potentially important tweaks to the system, they are nothing remotely akin to scrapping it,” said Joyce and Waters.
If a Labour government were truly to redesign working-age means-tested benefits, there are many ways to do it and the detail is crucial. In any case, the “upheaval” would be “huge”, with 2.4 million UC claimants potentially affected, according to Joyce and Waters.
“There remain good reasons to want a more integrated benefits system to replace the complex, confusing and disjointed patchwork of support that we have had until now,” according to the IFS statement.
Progressive thinktank the Institute for Public Policy Research (IPPR) also welcomed the announcement. Clare McNeil, associate director at IPPR, confirmed that levels of trust in UC are “dangerously low in many communities”.
“It urgently needs a fundamental re-engineering because some of the design principles are profoundly misconceived,” McNeil said, adding that reducing wait times and offering flexibility over payment frequency and how payments are split within a household would be positive moves.
IPPR also welcomed the proposed removal of the two-child limit and benefits cap which had pushed children and disabled people further into poverty, destitution and debt.
“The benefits freeze has also had a disastrous impact,” McNeil said. “Any government should increase the UC Standard Allowance and reform the system for single parents and second earners in couples (often women) who have missed out because of the gender-blind design of the system.”
In addition, work should genuinely pay — and this meant working with employers to create “better” jobs and alternatives in places with few jobs available as well as actions like improving childcare, McNeil said.
IPPR research for an upcoming report suggested UC is failing to meet its stated aims while other figures show poverty is growing again among pensioners, children and workers. UC had been officially intended to boost workforce participation. However, it is “far from clear” that this has happened, according to the thinktank.
IPPR analysis for the Child Poverty Action Group in June found that lifting the two-child limit could raise 300,000 children out of poverty by 2023-24.
Fleur Doidge is a freelance journalist at Left Foot Forward. Follow her on Twitter.
5 Responses to “Unions and policymakers call for Universal Credit overhaul”
Elizabeth Chell
Something has to be done to amend this system; at the very least to pay claimants what they are due from day 1 and to make more regular payments, not once a month. Children are the ones that are suffering so it is essential something is done.
Patrick Newman
It is difficult to see Labour spending four to five years designing a complete replacement of UC. A case of scrapping the Tory implementation of what is a good principle for assessing and delivering benefits and giving priority to workarounds that remove or revise some of the worst features – like the ridiculous waiting time for commencement of paying benefits. It would also be very useful the system to be able to automatically import data from legacy systems and reduce mistakes and the delay in paying out.
Tom Sacold
Reform is required. No need to scrap and rebuild.
Universal Credit was itself a long over-due reform. The old multiple systems, some using 50 year old mainframe computer programmes running in emulation on modern hardware were/are a nightmare to maintain as well as being very expensive. The outsource company that maintained them charged ridiculous fees for changes. I was part of the initial pilot project, setup by the Labour Government 15 or so years ago, to show that the data from six different welfare/benefits systems could be pulled together successfully.
Sherrelle Collman
The concept of Universal Credit is good, however rather than scrapping the system the Government should rectify the issues to hand simplifying the system for tenants so that they do not fall into hardship and design a more user friendly service for landlords when applying for direct payments.
The government should work with external stakeholders and take into account the issues that have been raised to date. Why rebuild a system that has taken nearly 10 years to set up and cost the tax payer millions, lets continue to invest in the system and make it work for all!
Dave Johnson
While the UC nightmare should obviously have been scrapped before it began, it was designed by a tory government and is therefore definitively cruel and oppressive; there are several common complaints that I just can’t understand.
As someone who’s lived under benefits and self-employment topups for a significant fraction of my working life, I can’t understand this obsession with more frequent payments. I HUGELY prefer being paid monthly, it’s WAY more useful to receive a less frequent but significantly sized chunk of money.
A large enough sum for proper budgeting is much better than a petty drip-drip-drip of sufficient to buy a couple of loaves of bread.
The other idea, that melding the different benefits into one is a good idea is, wearing my favorite hats of network engineer and programmer, a ludicrous self-foot-shooting exercise. Has no one else heard the phrase ‘Single Point of Failure’ ? Besides the way that most people have multiple different needs and are accordingly supported in multiple different ways with assorted modes of entitlement and need all changing in different ways for different reasons, surely different supports from different institutions is much safer? If something goes wrong with one organisation, at least that way /some/ of the needs will still be catered for and the world will not crash in.
With a single point of failure (“Universal” “Credit” ) if some bureaucrat clicks an incorrect tick box early on and it all comes tumbling down, then because it’s a “universal” system similar bureaucrats will have clicked similar wrong tickboxes for several thousand victims before anyone realises what’s happening. The single help line will accordingly be overloaded to xmas and back and a fortnight’s nightmare chasing everything up will be suffered by all, while having not a penny coming in for any of the relevant claims.
Separate systems only go wrong usually one at a time and /separately/ !