£1.5bn overhaul for universal credit
Chancellor tries to head off revolt from backbenchers
BENEFIT claimants will no longer have to wait up to six weeks for universal credit under a £1.5billion overhaul aimed at rescuing the flagship Tory welfare policy.
The Chancellor announced families will be able to get their first full payment in just five days as he tried to head off a backbench rebellion that threatened to derail the project.
Universal credit combines six benefits – Jobseeker’s Allowance, tax credits, housing benefit, income support, child tax credits and employment and support allowance – into one monthly payment.
It is designed to make the welfare system less complicated and ensure no-one faces a situation where they would be better off claiming benefits than working.
But MPs and charities had warned that long delays in payments for new claimants – introduced by George Osborne when he was Chancellor to save money – were causing suffering for vulnerable families.
In order to mirror the world of work, the benefit is paid four weeks in arrears, based on someone’s earnings in the previous month. There is a further week for administration and an additional arbitrary ‘waiting week’, added by Mr Osborne.
Mr Hammond announced that the waiting week would be axed from February. Families will also be offered up to a month’s worth of universal credit within five days of applying through an interest-free advance. They will have 12 months to repay it.
Charities yesterday welcomed the £1.5billion cash boost.
Gillian Guy, the chief executive of Citizens Advice, said: ‘The changes announced by the Chancellor today are a very welcome step towards fixing the problems with universal credit, and show the Government is acting on our evidence about the impact it’s having on people’s lives. These changes should make a significant difference to the millions of people who will be claiming universal credit by the time it’s fully implemented.’
But the Tories last night accused Jeremy Corbyn of wanting to keep people trapped on benefits after he maintained that the rollout of universal credit should still be halted. Work and pensions secretary David Gauke said:
‘Universal credit is a hugely important reform that puts work at the heart of our welfare system. I don’t think Labour wants to pause and fix universal credit, I think they want to scrap it and rewind to the failed system we inherited.
‘My sense is that actually there are a lot of thoughtful backbench Labour MPs who see the benefits of universal credit, but the Labour frontbench are continuing to push an obstructive approach because they are trying to stop the Government delivering a major reform.
‘We will work constructively with anyone from any party who wants to make this work, but I think Jeremy Corbyn is not interested in that and he just wants to return to a system that was failing to get people into work and was trapping people on benefits.’
Former work and pensions secretary Iain Duncan Smith, who was the architect of universal credit, last night praised Mr Hammond for reversing cuts made by Mr Osborne.
He said: ‘The Chancellor has also taken the right step to scrap the seven-day waiting period. This was not part of the original design of universal credit.’