Universal Credit thrown into chaos

Tory rebels call for halt to welfare overhaul to prevent it becoming another Poll Tax

THE Government’s welfare reforms were thrown into jeopardy last night after 12 Conservative MPS wrote a private letter to the Work and Pensions Secretary demanding a pause in the roll-out of Universal Credit.

The Daily Telegraph understands that the 12 MPS, led by Heidi Allen, have warned David Gauke not to go ahead with a planned acceleration of the introduction of the scheme.

Ministers had been expected to announce a decision on whether to extend the policy in the coming weeks but the backbench revolt risks wiping out the Tories’ majority in the Commons if Labour forces a vote, throwing the whole scheme into question.

Universal Credit was the flagship welfare reform of David Cameron, the former prime minister, and Iain Duncan Smith. It combines six different benefits into a single payment and aims to encourage people back into work.

One of those who has signed the letter to Mr Gauke is understood to be Andrew Selous, one of Mr Duncan Smith’s former parliamentary aides.

The overhaul of benefits has been planned by the Conservatives since 2010 but has been beset by delays and Cabinet rows over its funding.

Theresa May has already had to abandon other Tory welfare reforms and the resurgence of Labour under Jeremy Corbyn has spooked many Conservatives, who now advocate a more lenient approach to the benefits system. The Prime Minister has relaxed the public sector pay cap and senior Labour figures also believe she will now have to offer more generous benefits.

Last night, one senior Labour MP warned that Universal Credit threatened to become as damaging as the introduction of the Community Charge, or “Poll Tax”, that helped to end Margaret Thatcher’s premiership.

There are 590,000 people on Universal Credit in England and Wales, with around 50,000 new claims made each month. Ministers want to move around 12million people across to the new scheme over the next five years.

The MPS are concerned that claimants lose out when they switch from their existing benefit because there is a six-week delay as they change over.

The MPS want Mr Gauke to delay a planned accelerated roll-out of the scheme from five job centres a month to 50 job centres a month, which was due to be announced in the coming weeks. Ms Allen and Mr Selous were unavailable for comment but earlier this month Ms Allen said she thought Mr Gauke was “listening” to the concerns.

She said: “I know he’s looking closely at whether he wants to push that button on accelerating the roll-out.”

Ms Allen complained that 14 per cent of new claimants were not getting any money on time and 23 per cent were receiving only a partial payment on time.

Frank Field, the Labour chairman of the House of Commons work and pensions committee, said the problems affected millions of people and urged a

“Christmas truce” in the scheme’s expansion. He said “serious” Tory MPS had signed the letter, adding: “The new secretary of state knows that the dribbling out of Universal Credit has been beset by problems.

“The idea that there should now be a mega roll-out should fill him and Tory MPS with horror as they see a rerun of the Poll Tax, because eight million households are involved.

“The Government needs to agree a Christmas truce, because otherwise your newspaper will be filled with stories of people starving over Christmas.”

Citizens Advice, which helps people navigate the benefits system, has warned that the acceleration of the scheme – in its current state – is a “disaster waiting to happen”. More than one in 10 applying for Universal Credit turned to Citizens Advice for help last month, it claimed, while a quarter of people were waiting longer than six weeks for their first payment.

Gillian Guy, Citizens Advice’s chief executive, told The Telegraph: “Evidence from Citizens Advice and numerous other bodies – including the DWP itself – shows that problems with Universal Credit risk pushing thousands of families into a spiral of debt.

“The Government must pause the roll-out of Universal Credit and fix the problems with this benefit.”

However, Mr Duncan Smith last night urged the Government to ignore the complaints and proceed with the accelerated roll-out. Any concerns about the scheme were “a few months ago” and could be resolved by making alternative payments to claimants during the switchover period, he said.

“There is no reason to delay or stop this. The Government already has all the mechanisms to resolve it.

“They should carry on with the ‘test and learn’ process because that is the way they make sure the process delivers and it is already delivering and they are resolving those problems.”

A Department for Work and Pensions spokesman said: “We are not aware of IT problems supposedly associated with the roll-out of Universal Credit. If people cannot wait for their first Universal Credit payment, they can request an advance payment. Advances can be repaid over an agreed period, depending on someone’s circumstances, usually over six months.”