Labour to Scrap Universal Credit

Labour to Scrap Universal Credit

In an important speech Jeremy Corbyn has pledged to scrap Universal Credit (UC). Jeremy made the speech in Chingford, the constituency of Iain Duncan Smith who was the architect of this disastrous plan. 

On paper UC looked like a good idea. The benefits system consists of half a dozen different schemes which have grown up higgledy piggledy over the best part of a century. The effect of this jungle has sometimes produced a ‘benefits trap’, where recipients work longer hours and then lose most of the potential improvement in their standard of living through withdrawal of means tested benefits. In some cases they can actually find themselves worse off.

 Why not have a single benefit system to cover all cases? That would ‘make work pay’, since longer hours in work would always make people better off. The Tories seem to believe unemployment is caused by a decision of people not to go to work. In fact it is an integral product of the capitalist system.  

UC is supposed to reflect modern life. It is purely digital, as if everyone has easy access to a computer. It is paid out monthly in arrears because that is how everyone is paid these days. (Again, not true.)  

The disastrous consequence of this is that claimants have to wait five weeks before they get any money, and longer if there are glitches in the system. How are they expected to get by in the meantime? Instead of paying rent directly to the landlord, the claimant is expected to pay out from their benefits. Since claimants are invariably up against it and all too often in desperate poverty, it is all too easy spend the money and then get into debt to loansharks. The explosion of food banks in recent years is a direct result of the rollout of UC. There are well attested cases where claimants have been driven into sex work because of UC-induced poverty. 

UC is grotesquely “inhumane and cruel”, as Jeremy has pointed out. There is a limit on benefits to two children. This is an echo of the nineteenth century Poor Laws, with its obsession about ‘paupers’ breeding. The limit can be waived if the claimant fills in a form proving that the third child is the result of rape!  

There is an overall benefit cap in any case. There was a reason for the proliferation of different benefits in the past. Different people have different needs and any humane benefits system should cater to their actual needs, regardless of an arbitrary maximum payment. 

The sanctions system - complete withdrawal of benefits, for instance for missing a job interview - can drive people into abject poverty. Over the past nine years of Tory austerity benefits, have been relentlessly whittled down or withdrawn altogether. The benefits system is bureaucratic and baffling to potential claimants, as well as cruel. On top of all this UC has been bedevilled by IT failures and is years behind schedule.  

Corbyn denounced up the failures of UC. “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.”

Labour is committed to scrap UC completely. It will take time to untangle the mess completely and install a new fair benefits system, but is pledged right away

·         to reduce the waiting time for receipt of benefits to two weeks

·         to scrap the two child limit , freeing hundreds of thousands of children from poverty

·         to abolish the notorious ‘rape’ clause

·         to get rid of the benefits cap

·         to suspend the punitive sanctions regime

·         to make payments direct to landlords

·         to scrap the digital only process and recruit new social security advisers.

This is a welcome and necessary step forward in Labour’s policy.