Tories lied on Universal Credit – Scrap It Now!

Jimmy Haddow, Lothian Socialist Party Scotland

In November 2010 the Tory/Lib Dem coalition government published a White Paper setting out its plans for a Universal Credit (UC). The claim was UC would simplify the benefit system in Britain and strengthen financial incentives to work. No-one going onto UC would lose in the transferring over from legacy benefits. This was a lie.

The East Lothian Citizens Advice Bureaux conducted a survey in January 2017. East Lothian was the first Scottish Local Authority to experience full digital roll out of UC, starting March 2016. This enabled the CAB to calculate benefit entitlement under UC compared to the benefits it replaced. The hard data collected and analysed by the East Lothian CAB shows that more people will lose (52%) than gain under UC. 79% of those who lost money would have had a financial reduction of more than 10%. Amongst those who gain, 63% would experience a financial increase of just 1%. The study found that there is a median average gain of just 34p, but a median loss of £44.72. In whatever way the figures are analysed, UC takes money from the poorest and most vulnerable section of society.

Universal Credit will entirely replace the system of means-tested benefits and tax credits for working age adults, including Income Support, income-related Job Seeker’s Allowance and Employment and Support Allowance, Working Tax Credit and Housing Benefit. However, Universal Credit is just a continuation of the welfare policies that have been introduced in the past 40 years and is designed to tackle long-term unemployment through the American approach of welfare-to-work based on compulsion to find low paid jobs.

There are many structural problems relating to UC, like the 6 week waiting period and housing benefit now being part of the income rather than as a separate element among many others. But what has not been highlighted is the how people put onto Universal Credit lose out quite considerably compared to their previous benefits. That is a deliberate strategy to cut the welfare bill.

The SNP Scottish Government, correctly, has said that the roll-out of Universal Credit must be halted. Early in October 2017 they also used their powers to allow payments of UC either monthly or twice monthly as well as having housing costs in the UC award paid directly to the landlord, if the claimants wish. But this is done in two stages, new claimants now and people already on UC in January 2018.

But important as this is, it is just a cosmetic change. What the Scottish government should be doing is using its powers, including reserves, to mitigate the loss to UC claimants from the old legacy benefits.

The Scottish government should also reduce the waiting time from six weeks, as it is now, to one week by using money to mitigate the five week period. Austerity is locked into UC and it needs to be scrapped. But the only way to get rid of Universal Credit and to win liveable benefits for the poor, sick and unemployed is for the trade union movement to organise co-ordinated mass action against. This should be linked to better pay for all workers based on a £10 minimum wage and an end to the Tory demonisation of claimants and the poor.