Scrap tyran­ni­cal Uni­ver­sal Credit now

Sunday Herald - - COMMENT - Iain Macwhirter

THE fire­brand SNP MP Mhairi Black has made a name for her­self con­demn­ing the UK Gov­ern­ment’s ben­e­fit re­forms. So it came as some sur­prise last week when she be­gan her speech in the Uni­ver­sal Credit de­bate by prais­ing it. She said that re­plac­ing the cum­ber­some sys­tem of mul­ti­ple ben­e­fits – Job­seeker’s Al­lowance, hous­ing ben­e­fit, work­ing tax credit, child tax credit and in­come sup­port – was a good thing. “We’re not call­ing for it [Uni­ver­sal Credit] to be scrapped, just halted.” I’m not sure that I agree with her.

Uni­ver­sal Credit (UC), which is be­ing rolled out across the UK over the next five years, is osten­si­bly about mak­ing work pay and mak­ing it eas­ier to ac­cess ben­e­fits. How­ever, it is re­ally about dis­guis­ing ben­e­fit re­duc­tion and forc­ing peo­ple into tak­ing what­ever work is avail­able. It is essen­tially co­er­cion and cuts dis­guised as ef­fi­ciency and fair­ness.

The pro­lif­er­a­tion of ben­e­fits in the old sys­tem hap­pened for a rea­son: peo­ple’s cir­cum­stances are of­ten very dif­fer­ent, and some­times need to be ad­dressed in­di­vid­u­ally. One catch-all pay­ment, even without the cuts in ben­e­fits that are go­ing on in the back­ground with UC, could never pro­vide the flexibility nec­es­sary to keep peo­ple from fall­ing through the net. Many will re­call the chaos over the Child Sup­port Agency (CSA), which was sup­posed to sim­plify child main­te­nance and had to be scrapped. Uni­ver­sal Credit is be­gin­ning to look like the CSA on steroids.

First of all, claimants must have a phone, a bank ac­count and ac­cess to a com­puter, which is by no means uni­ver­sal as any­one who saw I, Daniel Blake will ap­pre­ci­ate. But even as­sum­ing every­one gets on­line soon, the sys­tem is fraught with dif­fi­culty. In most cases, claimants have to wait six weeks be­fore they get their first pay­ment, which forces many into debt. They have to bor­row money to sur­vive, of­ten at loan shark in­ter­est rates.

The Gov­ern­ment claims the de­lay ac­tu­ally helps claimants man­age the tran­si­tion to work. In a job, peo­ple get paid monthly in ar­rears, so were they to get their ben­e­fit paid up­front, they would have an equally long wait for money when they start work again. But the sit­u­a­tion of some­one who is ac­tu­ally in em­ploy­ment is very dif­fer­ent to that of some­one who has fallen out of work and is in ben­e­fit ar­rears. The lat­ter are very likely to be evicted for non-pay­ment of rent for a start. Ac­cord­ing to a poll by the Na­tional Land­lords As­so­ci­a­tion, only two in 10 pri­vate land­lords say they are pre­pared to ac­cept UC ten­ants in fu­ture.

The real pur­pose of the six-week black hole was to make Uni­ver­sal Credit a very last re­sort. If you are of­fered a dead-end, zero-hours job on or be­low the na­tional liv­ing wage (like five mil­lion in the UK), you might well con­sider that life is bet­ter on ben­e­fits. The six-week wait is de­signed to make you think twice. Food­banks will likely be your only source of com­fort as you find your­self on the streets. Most un­em­ployed peo­ple have zero sav­ings, and if you have chil­dren, six weeks without cash is un­think­able.

How­ever, I sus­pect the Gov­ern­ment will even­tu­ally give some ground on the six-week wait, as it did over the 55p-a-minute charge for us­ing the UC claims phone ser­vice. Its man­i­fest un­fair­ness is too much for most Tory back­benchers, who could not bring them­selves to vote against Labour’s call for UC to be paused in last week’s de­bate. They ab­stained en masse. If and when the six-week gap is closed, both Labour and the SNP may be in the un­com­fort­able po­si­tion of hav­ing en­dorsed the prin­ci­ple of Uni­ver­sal Credit by de­fault.

CON­SER­VA­TIVES have learned the les­son of pre­vi­ous ben­e­fit re­forms. They cre­ate highly-charged po­lit­i­cal re­ac­tions, as Ge­orge Os­borne dis­cov­ered when he tried to phase out tax cred­its in 2015. Bet­ter to use a softly-softly ap­proach and make tac­ti­cal con­ces­sions in or­der to pre­serve the strate­gic ob­jec­tive. Uni­ver­sal Credit is the lead­ing edge of aus­ter­ity and it is us­ing a ver­sion of con­fu­sion marketing to ease through very sub­stan­tial ben­e­fit cuts. For ex­am­ple, Em­ploy­ment and Sup­port Al­lowances for peo­ple with only a lim­ited ca­pac­ity for work will be greatly re­duced un­der UC, but not im­me­di­ately. New Uni­ver­sal Credit claimants un­der the age of 22 will find their hous­ing ben­e­fit is cut. Work­ing fam­i­lies are in for a shock come 2020 as they dis­cover that UC does not nearly match the over­all value of the old ben­e­fits.

When Os­borne re­versed the phas­ing out of work­ing tax cred­its he did not scrap the sub­stan­tial cuts that are baked in to Uni­ver­sal Credit. Ac­cord­ing to the In­sti­tute for Fis­cal Stud­ies, three mil­lion work­ing fam­i­lies with chil­dren on tax cred­its will find them­selves £2,500 worse off un­der UC by 2020. The work­ing-age ben­e­fits cov­ered by Uni­ver­sal Credit are be­ing frozen for four years, to achieve cost sav­ings of around £12 bil­lion. Not only is UC less gen­er­ous in it­self, in­fla­tion is erod­ing all work­ing-age ben­e­fits by three per cent a year.

All this is dis­guised by a sys­tem of Byzan­tine com­plex­ity. Few peo­ple even in the De­part­ment for Work and Pen­sions seem to un­der­stand the new sys­tem, which ap­pears in a state of con­stant cri­sis. In ar­eas like In­ver­ness, where UC is be­ing in­tro­duced in Scot­land, al­most half the cases in­ves­ti­gated by Cit­i­zens Ad­vice were found to in­volve ad­min­is­tra­tive er­rors and de­lays – of­ten lead­ing to heart-rend­ing sto­ries of per­sonal dis­tress. But in al­most ev­ery case the ini­tial re­sponse from the DWP had been along the lines of “com­puter says no”.

The Scot­tish Gov­ern­ment has promised to in­tro­duce a fairer sys­tem of Uni­ver­sal Credit, al­low­ing it to be paid fort­nightly and with direct pay­ments of hous­ing ben­e­fit to land­lords. But there are mul­ti­ple prob­lems here, not least that hous­ing ben­e­fit is be­ing scrapped in the new UC ben­e­fit. Wel­fare is only par­tially de­volved so min­is­ters have no say on how the over­all sys­tem works or is fi­nanced. Ni­cola Stur­geon will come un­der pres­sure to re­store the head­line cuts in ben­e­fits, as in 2015 when op­po­si­tion par­ties urged her to re­verse Os­borne’s cuts to tax cred­its. Then, she wisely stood her ground and waited for a U-turn. But now, with the es­tab­lish­ment of the new Scot­tish so­cial se­cu­rity agency, the Scot­tish Gov­ern­ment has placed it­self in the front­line of UK wel­fare cuts over which it has no con­trol and which it can­not af­ford to re­verse.

The old sys­tem of mul­ti­ple ben­e­fits and con­fis­ca­tory cut-offs was cer­tainly not per­fect. The prin­ci­ple of al­low­ing claimants to keep some of their ben­e­fits as they en­ter work is a sound one, but this is not what Uni­ver­sal Credit is about. It is first of all a ve­hi­cle for cut­ting ben­e­fits by stealth and there­after pun­ish­ing claimants for fail­ure to find work. The only pos­i­tive might be that it has in­di­rectly sparked the de­bate over Uni­ver­sal Cit­i­zens In­come. The Scot­tish Gov­ern­ment is in­ves­ti­gat­ing the pro­posal to scrap the costly ben­e­fits bu­reau­cracy al­to­gether, and give every­one a ba­sic in­come ir­re­spec­tive of need. How­ever, Uni­ver­sal Credit shows the dan­ger of propos­ing ap­par­ently sim­ple so­lu­tions to com­plex prob­lems. One size rarely fits all, and wel­fare will al­ways have to be tailored to need.

Few peo­ple even in the De­part­ment for Work and Pen­sions seem to un­der­stand the new sys­tem

I, Daniel Blake put the UK’s ben­e­fits sys­tem in the spot­light Pho­to­graph: PA Photo/En­ter­tain­ment One

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