Extra £6.6bn found for Universal Credit
UNIVERSAL Credit will effectively be made more generous than the benefit system it replaces under a £6.6billion overhaul.
The five-year rescue package follows warnings that the Tories risked poll tax-style protests caused by the troubled rollout.
Universal Credit combines six benefits –jobseeker’s allowance, tax credits, housing benefit, income support, child tax credits and employment and support allowance – into one payment.
It is designed to make welfare less complicated and ensure no one would be better off not working. But MPs and charities had warned that cuts introduced by former chancellor George Osborne would leave many families worse off. Mr Hammond yesterday declared Universal Credit ‘is here to stay’, but said he was ‘putting in the funding it needs to make it a success’.
Nearly £1billion will be pumped in to smooth the transition to the new system over the next five years. On top of this, work allowances – the amount you can earn before your Universal Credit payment is affected –would rise by £1,000 a year. The change, which will cost £5.6billion over five years, will help 2.4million working families with children and those with disabilities to the tune of an extra £630 per year.
The Resolution Foundation, which had been one of the groups warning about the rollout, last night claimed the changes will mean Universal Credit ‘is now more generous than the benefit system it is replacing’.
Work and Pensions Secretary Esther McVey said: ‘This extra support for Universal Credit proves we’re a party that listens and responds to people’s concerns. Since 2010, this govern- ment has helped over 1,000 people into work each and every day, and only last month we saw youth unemployment has halved since 2010.
‘We truly are a party that gets people into work, ensures that work pays and supports the most vulnerable in society.’
Mr Hammond said: ‘The switch to Universal Credit is a long overdue and necessary reform. It replaces the broken system left by the last Labour Government, a system that trapped millions on out-of-work benefits for nearly a decade.’
He said Universal Credit was contributing to the country’s ‘jobs miracle’.
Tory MPs including Iain Duncan Smith, the architect of the new benefits system, had called on the Chancellor to pump more money into it.
Former PM Sir John Major had also warned that the nationwide rollout of Universal Credit could hurt Theresa May in the same way that the poll tax damaged then prime minister Margaret Thatcher in the late 1980s and 1990s.
‘We listen and respond’