2018-03-16 Universal Credit

On April 25th, in Ipswich, Universal Credit will become the main benefit for people who, for one reason or another, are not earning enough to look after their family.  Universal Credit has already been trialled in Waveney and was a disaster there.  You don’t need to take my word for that – Peter Aldous MP has spoken up in the House of Commons in criticism of his own Party for having failed to make it the fair system that the Prime Minister claimed it would be.  So, it doesn’t work in Lowestoft but the Government is introducing it across the country anyway, without the essential changes needed to make it workable.

But they have chosen to make some changes, and four of those relate to Free School Meals, free childcare, childcare vouchers, and the safeguards against sanctions being imposed unfairly on disabled people.  Labour MPs spoke forcefully against these changes, but on Tuesday our motions to annul them were voted out by the Conservatives.

The most obviously wrongheaded change was to take the right to Free School Meals away from 1,000,000 children whose parents on Universal Credit would be earning over £7,400 per year. This is a ridiculous false economy – children who get a proper lunch are healthier and more easily able to learn.  Low-paid households will have to think very hard before working additional hours, because they could end up significantly worse off for working harder. Many families will avoid the humiliation of being turned down by not applying for free school meals at all. In Suffolk, an estimated 11,000 children who would have qualified will lose their entitlement to a free school meal.  Why didn’t the government leave the situation as it was, with every family entitled to Universal Credit also getting Free School Meals?  Why, indeed, didn’t they adopt Labour’s plan of providing free school meals to all primary school children, doing away with the complicated bureaucracy and the stigma that prevents so many from getting the nutritious meal they need.

The changes to childcare were also divisive, doing away with the vouchers scheme which has helped so many, and means-testing Universal Credit parents for free childcare for their two-year-olds so that 200,000 of them will now not benefit.

And the changes for disabled people are, if anything, even more unfair. The Work Allowance has been cut, so that there is no longer such a strong incentive to disabled people to take part-time jobs. Severe disability premiums are scrapped, the period for claiming extra support has been reduced, and safeguards which, for instance, protect people with mental health problems from being unfairly sanctioned are being removed.

Nobody can pretend the benefits system has ever worked well, with too many complicated rules and benefits which were often not claimed by the people who needed them the most.  Above all, there was the danger that people would end up in a poverty trap, where they could receive more money on benefits than they would get if they were working.  That’s why the original justification for Universal Credit was a good one – by continuing to pay UC when people are earning low wages, they should be that much better off so that work does pay.

But by re-introducing means-testing for free school meals and childcare, the government is blowing a hole in that justification.  And they haven’t funded UC properly, so when you do get a job you are actually not that much better off. And there will be no support for any more than 2 children. And they haven’t made sufficient allowance for profoundly disabled people. And to add insult to injury, Universal Credit is paid in arrears, so that those people who are in desperate need of financial support will have to cope for weeks without any money, or take out a loan to tide them over.

Most benefits are paid to people who are working. What people really want is properly-paid jobs and an affordable housing market so that they don’t have to rely on benefits at all. We need to make sure work pays, and the first step to that is to raise the minimum wage to a genuine Living Wage, and make sure employers are actually paying it.  And then where benefits really are needed, especially for disabled people and families with children, we need to design them in such a way that they do not penalise people for working, and do provide them with enough to live on. Anything less is not just unfair – it leads to misery and dependency.