Downing Street fears Universal Credit backlash

Work and pensions secretary Esther McVey has confirmed that some people will be worse off as a result of the introduction of Universal Credit (UC).

Ms McVey declined to confirm or deny reports she had told Cabinet colleagues that some claimants would lose out to the tune of £200 a month.

But challenged over a think-tank estimate that three million people will be about £1,800 a year worse-off due to the move to UC, Ms McVey told the BBC: “I have said we made tough decisions and some people will be worse off.”

Prime Minister Theresa May told the Commons on Wednesday that none of the two million-plus claimants due to be transferred on to UC in a “managed migration” starting next July would see reductions in payments, thanks to a £3 billion transition protection fund.

A Downing Street spokeswoman denied that the prime minister had misled MPs, telling reporters: “Absolutely not. She was answering a question about people moving through the managed migration process.”

The fund will protect claimants moving from a range of existing benefits which are being replaced by Universal Credit. But claimants who report a change of circumstances, such as changing jobs, moving in with a partner or moving house, could see their payments altered.

Former prime minister Sir John Major called for a rethink of the planned roll-out of UC, warning the Government risks a poll tax-style backlash if its flagship welfare reform is seen as unfair.

The architect of the new system, former work and pensions secretary Iain Duncan Smith, said an additional £2 billion must be pumped into UC to make it operate as planned.

Labour leader Jeremy Corbyn said the system needed “dramatic” change to ensure that no one loses out.

Universal Credit replaces a range of existing welfare payments, but has so far been applied only to around a million new claimants or those with changed circumstances.

Conservative MP Nigel Mills urged ministers to slow down its further rollout until it has shown itself capable of making payments accurately and on time to those already receiving it.

“If you have any doubts that we can make it work for these volumes, let’s slow down,” the Amber Valley MP told BBC Radio 4’s World At One.

“Let’s not get this wrong for the sake of sticking to a timetable.”