Universal credit: Brown says benefit rollout could lead to ‘poll-tax-style chaos’

Gordon BrownImage copyright
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The rollout of universal credit should be put on hold, Gordon Brown is to say, warning the “cruel and vindictive” system is exacerbating child poverty.

Unless plans to extend the benefit across the UK were paused or abandoned, the ex-prime minister said, it could lead to major social unrest next year.

In a speech in Edinburgh, he will also urge action in this month’s Budget to boost child benefit and tax credits.

Theresa May says low-income families will be protected during the rollout.

Speaking at Prime Minister’s Questions, the prime minister said the expansion of Universal Credit to an extra two million people next July would initially be done on a “small-scale basis to ensure we get that right”.

She appeared to guarantee that those involved, likely to include one million working families and 750,000 people unable to work because of illness or disability, would not see any reduction in their monthly income.

Universal credit is a new benefit for working-age people that consolidates into one monthly payment six benefits:

  • income support
  • income-based jobseeker’s allowance
  • income-related employment and support allowance
  • housing benefit
  • child tax credit
  • working tax credit

Read more: What is universal credit?

It was designed to make claiming benefits simpler and low-paid work more financially rewarding but its implementation, which has been phased in to different groups and regions, remains hugely controversial.

The process of making universal credit available to all claimant groups across the UK has been delayed several times but is now due to go ahead in the summer.

In a speech in Edinburgh, Mr Brown will say universal credit can no longer achieve its stated objectives because of the £3bn cut to its budget while the problems people are having in claiming support have had a devastating impact on their lives and led to a massive increase in the use of food banks.

He will cite research by the Resolution Foundation, which suggests 3.2 million working families are set to lose an average of £48 a week as a result, equivalent to about £2,400 a year.

This, combined with other welfare changes, such as the freeze in child benefits and tax credits since 2015, the two-child limit on child tax credit claims and scrapping the family element of child tax credits, he will say, means the number of families with children living in poverty is set to rise to 5.2 million by 2020.

Media captionBeing in work, or in-work poverty…

“Claimants feel more powerless than ever, waiting weeks for money, forcing rent arrears and pushing families into the hands of loan sharks,” the former Labour leader will say.

“So I am calling today for the government… to end this harsh, harmful and hated experiment. We need an urgent review… and we must hear the voices of those who know what it is like to have help cut short.”

Ministers, he will say, are “deeply worried” about the potential chaos that extending universal credit further could bring – saying “a return to poll-tax-style chaos in a summer of discontent lies ahead”.

The Labour leadership has called for universal credit to be scrapped and Mr Brown will say there may be no alternative unless it can be made “fit for purpose”.

He will also urge Chancellor Philip Hammond to use his Budget on 29 October to end the child benefit freeze and restore child tax credits to “halt the rising epidemic of child poverty”.

Work and Pensions Secretary Esther McVey has vowed to press on with the rollout of universal credit, which she said had helped contribute to record employment levels.

Speaking at the Tory conference last month, she said Labour “hated” the benefit model so much because it “ensures that work always pays” and the system put in place by Mr Brown during his decade as chancellor “stifled opportunities” through punitive tax rates.

She promised job centres would be working with Citizens Advice to ensure the most vulnerable access to the money to which they were entitled and budgeting advice.

Universal credit: Brown says benefit rollout could lead to ‘poll-tax-style chaos’}

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