Universal Credit, Put Simply

By Campaign Agent Joe Monk

What is it?

The Department for Work and Pensions (DWP) objective is to provide a stable safety net for citizens to find accessible ways into work, and to also compensate for those that are struggling to attain a basic standard of living. Governments over the years have tried and tested many initiatives, including Blair’s manifestation of the right to work scheme – seen by many as exploiting those not eligible to work yet being forced to due to the abhorrent testing system.

Universal credit was first devised by Ian Duncan Smith, secretary of state for the DWP in the Cameron premiership. It has been gradually expanded under the current government, and the watchful eye of its presider, Esther McVey. In effect, this system aims to combine six benefits comprising of; Jobseeker’s Allowance, income-related Employment support, income support, housing benefit, working tax credit, and finally child tax credit. This is meant to make the system more simplistic and accessible. Unfortunately, this hasn’t been the case. 

What are the criticisms?

Recent reports have shown that one in six universal credit claimants aren’t receiving pay on time. It’s ironic that this was revealed during a cabinet meeting which was arranged to discuss the `progress` the new system was making. Moreover, it’s never a good sign when the Archbishop of Canterbury, Justin Welby, has to intervene in proceedings, stating that the system leaves “too many people worse off, putting them at risk of hunger, debt, rent arrears” to name a few. Complaints have also centred on lack of resources, resulting in many admitting to being forced to commit crimes as the benefits are not sufficient enough to compensate for inadequate living standards. The perceived failures of universal credit could account for the fact that many people feel left behind by the Westminster elite, who are unable to empathise with claimants struggling to provide a basic standard of living for their families. 

Subsequent criticisms of this benefit scheme have resulted in calls for it to be scrapped, not just from the Archbishop, but with strong impetus from Labour. The shadow chancellor, John McDonnell, referred to it as `iniquitous`, whilst also lambasting Theresa May for making the audacious claim that with regards to austerity `the end is in sight` at the party conference. Calls for its abolition have increased recently, most notably due to revelations that Esther McVey, in briefing her cabinet colleagues, declared that around half of single parent and two-thirds of couples of a working-age with children would lose a substantial £2,400 a year. Consequently, there is speculation that there could be more delays before the next rollout ensues, leaving more families dependent on trips to food banks and possibly crime. It raises questions as to what aspirations. It raises questions as to what aspirations people have when the `just about managing` - the prominent term coined by Theresa May, whom she seeks to sweep away from Labour - have no certainty of when they will receive their next form of basic income.

More recent criticism has come from former PM, Gordon Brown, who stated in Edinburgh on Wednesday the 10th October that the rollout across the country will result in a million more children facing the brink of poverty, with more reliance on state resources that will ensue from this. As a result, there needs to be alternative solutions in order to combat the potential fears that the rollout of Universal credit is expected to produce.

What are the alternatives?

John McDonnell proposed the implementation of a universal basic income, in spite of concerns of the costs of such a scheme. Nevertheless, this initiative has been piloted, most notably in Finland. The main purpose is to ensure everyone gets a fixed income, and also reduce the stigma of claiming benefits given that all will receive the same. One man in particular claimed that this scheme makes him feel `like a free man`, with further suggestion that it will help those who have lost work and struggle to find work in quick response to this.

The question remains as to whether the alternative of a universal basic income could work in Britain. With a higher unemployment rate and more immigration, it will be hard to devise a way to ensure all receive some form of basic income, in addition to the concern that all will receive the same amount despite the levels of inequality that persist.

Sources and Further Reading

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