Universal Credit U-turn in next month’s budget
MINISTERS are preparing to use next month’s budget to announce a climbdown on the roll-out of the Government’s Universal Credit scheme, The Sunday Telegraph can disclose.
Conservative MPs pressing for reforms to the new benefits system are now “expectant” that the Chancellor will announce a reduction in the sixweek initial waiting period for payouts, in his address next month.
The Government is understood to have already resolved to reduce the waiting period by seven days, reversing
an additional delay put into the scheme by George Osborne. The Treasury estimated that the seven “waiting days” would save up to £260 million per year as a result of withholding an extra week’s payment from each new claimant. Officials are now working on further reductions.
Criticism from Labour and a string of senior Tories prompted ministers to signal last week that they were looking at ways to fix the issue. Backbenchers were pushing for a one-month wait.
Frank Field, the Labour chairman of the Commons Work and Pensions Select Committee, said: “Tory MPs have said they are expectant that it will be in the Budget. If I was the Government that’s certainly the sensible thing to do.”
MPs have warned the delay in the system was pushing poor tenants into rent arrears and turning many to food banks. Despite this, Theresa May said earlier this month the system was “working”. Simon Dudley, the leader of Royal Windsor and Maidenhead council in Mrs May’s constituency, was among a number of Tory council leaders who told The Sunday Telegraph that they shared the concerns of MPs. “Politically we are very supportive of Universal Credit helping people to get back into work,” he said. “But we have concerns about the pressure it may put on more vulnerable residents from a payment perspective.
“The practical reality is that we are dealing with residents who cannot just pop something on a credit card or get money out of a bank. They are dependent on the timely receipt of funds. The roll-out has to reflect that.”
Yesterday, a government spokesman said improvements to a mechanism for claimants to receive advance payments “as soon as they get into the system” would help “ensure that people joining Universal Credit don’t face hardship”.
Separately, the Chancellor was facing pressure to fund a pay rise for nurses and front-line NHS staff, amid reports by Tory backbenchers that the sevenyear public sector pay freeze may have been significant to the party’s general election defeat.
Democratic Unionist Party MPs supported a rise and the Royal College of Nursing threatened to ballot for strike action if the budget measure is omitted.