Labour confirm they’ll scrap Universal Credit with £3bn rescue plan for the poor

Jeremy Corbyn has confirmed the DWP benefit will be ditched under Labour – starting with £3billion in emergency reforms to scrap the benefit cap, two-child limit, benefit sanctions and five-week wait

Jeremy Corbyn MP, Labour Party Leader, will today announce that Labour (Saturday) will scrap Universal Credit, calling the flagship Tory welfare reform “inhumane” and an “unmitigated disaster”.

Speaking at a rally in Chingford and Woodford Green, the seat currently held by Iain Duncan Smith MP – the architect of Universal Credit – the Labour Leader will set out Labour’s plans to replace Universal Credit with a social security system that focuses on “alleviating and ending poverty, not driving people into it”.

alleviating and ending poverty, not driving people into it

In government, Labour will immediately end the worst aspects of Universal Credit, including:

• Ending the benefit cap and the two child limit, which alone will stop up to 300,000 children being pushed into poverty;Immediately suspending the punitive sanctions regime, which has been ineffective at supporting people back to work and has instead pushed people into poverty and reliance on foodbanks;
• Ending Universal Credit’s “digital only” requirement, which excludes people who cannot access the internet or are not computer literate, and recruiting 5000 additional advisors to deliver this change;
• Switching to split payments and fortnightly payments, including an automatic interim payment to end the five week wait.
• As well as scrapping Universal Credit, Labour will replace the Department for Work and Pensions with a Department for Social Security, marking a radical shift from a system that “punishes and polices” people to one where social security will support people in finding work and treat them with “dignity and respect”.

Criticising Universal Credit, Jeremy Corbyn is expected to say:

“Universal Credit has been an unmitigated disaster. As well as being behind schedule and over budget it is inhumane and cruel, driving people into poverty and hardship.

“Social security is supposed to give people dignity and respect, not punish and police them, make them wait five weeks for the first payment or fill out a four-page form to prove their child was born as a result of rape.

“The Universal Credit system sums up the priorities of the Conservatives – who think they’re born to rule. A government of the wealthy cutting taxes for the super-rich while forcing people to rely on foodbanks to survive.

“The Tories told us that Universal Credit would make work pay, but we have seen the opposite. More and more people who are falling into poverty have jobs, and more and more children who are growing up in poverty are living in working families.”

Announcing that a Labour government will scrap Universal Credit, Jeremy Corbyn is expected to say:

“It’s time to end this cruelty. So today I can tell you that Labour will scrap Universal Credit. And we will replace the Department for Work and Pensions with a Department for Social Security – this will provide real security.

“When a Labour government takes office we will introduce an emergency package of reforms to end the worst aspects of Universal Credit.

“And we will introduce a new system that will be based on the principles of dignity and respect and it will alleviate and end poverty, not drive people into it.

“We will lift hundreds of thousands of children out of poverty by scrapping the two child limit and benefit cap. The pernicious five week wait which causes so much misery and suffering will go. We will suspend the Tories’ pernicious sanctions regime, introduce fortnightly payments, make payments directly to landlords and protect women by making split payments by default, and never again will any woman have to fill in a four page form to prove her child was born as a result of rape.”

Margaret Greenwood MP, Labour’s Shadow Secretary of State for Work and Pensions, said:

“Universal Credit was meant to lift people out of poverty, simplify the social security system and smooth the transition into work.

“Instead it is failing those in need, pushing many into debt and rent arrears and forcing them to rely on food banks to survive.

“The two-child limit and the benefit cap are driving up child poverty, and the callous sanctions regime is punishing people instead of supporting them.

“Labour will scrap Universal Credit, put an end to the benefit cap and create a social security system that, just like our NHS, treats people with dignity and respect and is there for any one of us in our time of need.”

The next Labour government will introduce an emergency package of reforms to end the worst aspects of Universal Credit and rescue our failing social security system whilst we develop our replacement system. That package will:

• Reduce the five-week waiting period by introducing an interim payment after two weeks;
• Scrap the two-child limit;
• Scrap the benefit cap;
• Immediately suspend sanctions and the claimant agreement;
• Make split payments, payments direct to landlords and fortnightly payments the default;
• Officially end the “digital only” approach by recruiting 5000 new social security advisers.

In addition to this, Labour has already committed to:

• Ending the out-sourcing of Work Capability Assessments and bringing them back in-house;
• Scrapping the bedroom tax;
• Increasing ESA by £30 per week for those in the work-related activity group;
• Uprating Carers’ Allowance to the level of Job Seekers’ Allowance.

Labour will change the culture of the Department for Work and Pensions so that it treats people with dignity and respect and supports them in finding work and accessing the benefits they are entitled to, instead of punishing and policing people.

On day one Labour will replace the Department for Work and Pensions with a Department for Social Security. Labour will scrap Universal Credit and develop a new social security system built on the following three principles:

• Dignity – social security is there to help and support people and the best way to do that is by treating people with respect and dignity, building trust and giving them agency over their lives;
• Universalism – our social security system is there for all of us and we may all rely on it as some point in our lives. By seeking to bring back a universal element we will end stigmatisation and encourage social security to be held in the same esteem as universal services like our health and education systems;
• Ending poverty – our social security system should reduce poverty, not create it, make it worse and drive people into it.

Five-week waiting period

Labour will end the five-week waiting period as part of an emergency package of reforms to end the worst aspects of Universal Credit.

Labour will seek to permanently reduce the assessment period to one week so that claimants will receive their first payment after around 10 days of making their claim. However, because this will require a rebuild of the DWP system, it may take time.

In the meantime, Labour will introduce an interim payment, based on half an estimated monthly entitlement, to be paid after two weeks of making a claim, with the balance paid at the end of a month

• The government’s own analysis shows that the five week wait for an initial payment under Universal Credit is too long and is causing hardship for claimants.
  https://www.theguardian.com/society/2019/feb/11/universal-credit-rollout-linked-to-rising-food-bank-use-amber-rudd-admits

• The Trussell Trust says that people are being forced to rely on food banks as a direct result of the five week wait. The wait has also led to a surge in rent arrears and debt while contributing to rising poverty levels under the Tories.
  https://www.trusselltrust.org/2019/04/25/record-1-6m-food-bank-parcels/

The two-child limit

Labour will scrap the two-child limit because it is a cruel policy that punishes children.

• Nearly 60 per cent of the families hit by the two child limit are in work.
  https://www.gov.uk/government/statistics/child-tax-credit-and-universal-credit-claimants-statistics-related-to-the-policy-to-provide-support-for-a-maximum-of-2-children-april-2019
• DWP figures show that 592,000 children live in families that have been affected by the two-child cap https://www.gov.uk/government/statistics/child-tax-credit-and-universal-credit-claimants-statistics-related-to-the-policy-to-provide-support-for-a-maximum-of-2-children-april-2019?

• A recent Report by CPAG and the Church of England says 600,000 children have already been affected by the policy and 1.8 million children will live in affected families by 2023-24. https://cpag.org.uk/news-blogs/news-listings/two-child-limit-taking-heavy-toll-family-life-new-survey-finds

• Child poverty has already soared by over half a million under the Tories, up from 3.6 million to 4.1 million today. https://www.gov.uk/government/statistics/households-below-average-income-199495-to-201718

• The two-child limit could see child poverty soar even further – CPAG estimate that scrapping the policy will see a 300,000 reduction in child poverty.
  https://cpag.org.uk/news-blogs/news-listings/two-child-limit-will-tip-300000-more-children-poverty-%E2%80%93-new-research-policy

• The two-child limit also includes a rape clause, which last year meant over 500 women had to go through the indignity of filling out a four-page form to prove to the DWP that their child was born as a result of rape.
  https://www.gov.uk/government/statistics/child-tax-credit-and-universal-credit-claimants-statistics-related-to-the-policy-to-provide-support-for-a-maximum-of-2-children-april-2019?

The benefit cap

The benefit cap is a cruel policy that overwhelmingly punishes children and single parents with young children. Labour will scrap the benefit cap so that the amount claimants receive is not arbitrarily reduced below the level the DWP itself deems they need.

• According to DWP data, 85 per cent (114,337) of the 134,044 households affected by the benefit cap are single mothers

https://www.theguardian.com/society/2019/jan/04/benefit-cap-single-mothers-make-up-85percent-of-those-affected-data-shows

• The Tories pressed ahead with the despite an internal government assessment warning it would force tens of thousands of children into poverty

https://www.theguardian.com/politics/2015/may/29/household-benefit-cap-plunge-40000-kids-poverty-memo

• Since its introduction, a quarter of a million households have been hit by the cap – children live in 92 per cent of households affected
  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/831148/benefit-cap-statistics-may-2019.pdf

The punitive sanctions regime

The Tories’ punitive sanctions regime has eroded trust in the social security system and denied millions of people of their right to support. Evidence shows that sanctions are ineffective at helping people back work and instead push people into destitution and disengagement from the process.

http://www.welfareconditionality.ac.uk/wp-content/uploads/2018/06/40475_Welfare-Conditionality_Report_complete-v3.pdf

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/work-and-pensions-committee/benefit-sanctions/written/83480.html

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/work-and-pensions-committee/benefit-sanctions/written/83279.html

The current conditionality and sanctions regime means that DWP staff do not have sufficient time to provide the high quality employment support that many claimants would benefit from. This arrangement also creates a climate of mistrust because the very person who is meant to be ensuring benefits are paid and supporting claimants back to work is also being required to police the claimant’s job search activities and to recommend when sanctions should be applied.

The next Labour government will immediately suspend sanctions and replace the “Claimant Commitment,” which people must currently sign at the beginning of making a claim, with a reciprocal agreement between the Department for Social Security and the claimant.

The emphasis in this new system will be on tailored support – delivered by a work coach – and reciprocity rather than rigid requirements and punishments when they are not met. The claimant will agree to search for suitable work and undertake training opportunities where appropriate; the claimant’s work coach will agree to help identify suitable employment and training opportunities and support claimants in taking them up.

Make split payments, payments direct to landlords and two weekly payments the default

Universal Credit makes one payment to a household on a monthly basis. The Work and Pensions Committee has warned that single household payments of Universal Credit could put claimants living in an abusive relationship at risk of harm. Labour will make split payments the default and make sure that the child element is paid to the primary carer.
https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/news-parliament-2017/universal-credit-domestic-abuse-report-publication-17-19/
https://publications.parliament.uk/pa/cm201213/cmselect/cmworpen/576/576vw69.htm#footnote_2

The government claimed that monthly payments would be more reflective of the world of work, but this is not the case for many low-paid workers who do not receive a monthly wage. People on low incomes struggle to manage their living costs on a monthly basis.
https://www.resolutionfoundation.org/app/uploads/2017/10/Universal-Credit.pdf

The government has failed to offer direct payments to landlords other than in very limited circumstances. The Resolution Foundation has recommended allowing tenants the freedom to choose direct payment of housing support to landlords.
https://www.resolutionfoundation.org/app/uploads/2017/10/Universal Credit.pdf

Labour will make fortnightly payments and the housing element paid directly to landlords the default. Implementing this policy will require a one-off administrative change.

Scotland already offers claimants the option of a two weekly payment and housing payment direct to landlords and these options have seen substantial take-up.

• The share of households in Scotland opting for fortnightly payments has increased steadily since the option was introduced in Autumn 2017

End the “digital only” approach

The government’s intention for Universal Credit to be a “digital-only” platform has failed. Labour will scrap the “digital only” fiction and acknowledge the reality that claimants need support if our social security system is to work and recruit 5000 additional advisors to deliver this change.

• “Digital only” excludes people who cannot access the internet or are not computer literate, and leaves many claimants unable to make and manage their claims online.
• Almost 30 per cent of all claims for Universal Credit that are started are not completed according to the most recent figures, with the complexity of the online system a key reason for this.
  https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2018-07-20/166515/
• The DWP’s own survey of claimants in Full Service areas found that almost half of claimants were not able to make an online claim unassisted.
  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/714842/universal-credit-full-service-claimant-survey.pdf