May plots welfare climbdown
Prime Minister set to make concessions on Universal Credit amid fears it could become her ‘poll tax’
THERESA MAY is on the brink of a major climbdown over Universal Credit payments, having been warned it could become her “poll tax”.
In a significant shift in tone, minis- ters are understood to have signalled that they are looking at ways to reduce the waiting time for the Government’s new benefits scheme from six weeks, with backbenchers pushing for a reduction to one month.
It follows interventions by Sir John Major, the former prime minister, as well as some of Mrs May’s own MPs, who warn that the system is undermining her pledge to champion “ordinary working-class” families.
Mrs May defended the scheme only four days ago during Prime Minister’s Questions, insisting that “it is a system that is working”. But talk of a potential backbench revolt was likely to have raised alarm in Downing Street at a time government insiders were said to believe that Mrs May’s “weak and stable” position could actually be helping in her negotiations with European leaders. Yesterday, senior Tories were urging her to stay firm and “not blink first” over EU demands for a €60billion Brexit divorce settlement.
A reduction of the waiting time for Universal Credit payments could mean a massive bill for the Treasury, highlighting the level of concern in Downing Street over the potential ramifications of the policy for the Con- servatives. It comes as Philip Hammond, the Chancellor, is separately warning Tory MPs that any ideas they put forward for the Budget must be accompanied by suggestions for how they would be funded.
While Mr Hammond has declared he wants to hear “big ideas” from backbenchers, a source said he is also reminding them about government debt and the task of reducing the deficit.
The Chancellor’s insistence on avoiding increases in spending not matched by cuts or levies elsewhere will be endorsed by Liz Truss, the Chief Secretary to the Treasury, this week. She is expected to give a speech setting out how public services can be modernised and improved without “splurging” additional money.
Universal Credit was the flagship welfare reform of David Cameron’s government, combining six different benefits into a single payment that encourages people back into work.
There are currently 590,000 people on the scheme, with around 50,000 new claims each month.
But Conservative MPs have warned that a six-week delay as claimants switch over from the existing system
is leaving many people without vital funds and contributing to rising debt, rent arrears and evictions.
Yesterday, backbenchers told The Sunday Telegraph that they understood the Government was “looking at how the six week wait can be reduced”.
One MP said: “Four weeks is the target.”
Stephen McPartland, another of those to have raised concerns about the roll-out of the reform, said he believed the critics were “very, very close to getting a resolution” on the issue, with David Gauke, the Work and Pensions Secretary, finding it “very difficult to justify inside the parliamentary party why they need to defend a six- week wait”. The Stevenage MP told BBC Radio 4’s Week In Westminster: “I think people accept you have to be paid in arrears. A lot of these people on Universal Credit will be in work so they will get paid in arrears themselves, so we would like to see it set down to four weeks which is what you would have when you went into work and got a salary.” The- resa May avoided a Tory revolt on the issue in a House of Commons vote on Wednesday after making a concession by scrapping call charges to the Universal Credit helpline, and ordering her party to abstain on a non-binding Labour motion calling for the roll-out of the reform to be paused.
Last month, 12 Conservative MPs wrote to the Work and Pensions Secretary demanding the pause.
Earlier this month, in a highly unusual move, Sir John Major called on ministers to review the scheme, describing it as “operationally messy, socially unfair and unforgiving”.
Heidi Allen, the MP leading Conservative backbench calls for a change, said the issue came down to “a question of whether it reflects what we heard the Prime Minister say when she first became PM on the steps of No 10.”
She said: “It doesn’t fit with that belief in a moral compass.” Labour’s Lord Beecham said the scheme was “becoming the poll tax of our time”.
Last night, a government spokesman said: “The Government remains determined to ensure that people joining Universal Credit don’t face hardship, which is why we recently announced significant improvements to the system of advance payments that people can get as soon as they get into the system … We will continue to monitor and take any actions if necessary. But no decisions or announcements on any further actions are imminent.”