The Labour party has promised to radically overhaul the “inhuman and cruel” universal credit programme and scrap benefit sanctions as part of ambitious proposals to reform the social security system and reduce poverty.
The controversial five-week wait for a first universal credit payment – which has been blamed for destitution, debt and increased use of food banks – will be reduced and phased out, while the benefit cap and two-child benefit limit will be scrapped.
A Labour government would sweep away what it says is a “punish and police” culture at the Department for Work and Pensions (DWP), replacing it with a fresh approach to social security that treats claimants with dignity and respect.
It will argue that the current system has failed to provide adequate support for vulnerable people or help people return to work. It says its reforms, run by a newly-named Department for Social Security, will not seek to vilify or punish claimants but, NHS-style, be there for all citizens at their time of need.
Jeremy Corbyn is due to announce the proposals on Saturday at a rally in the Chingford and Woodford Green constituency currently held by Tory MP Iain Duncan Smith, who championed universal credit and oversaw its introduction as work and pensions secretary between 2010 and 2016.
The Labour leader 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 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.”
The proposals, which come out of a year long party review of welfare policy, commit Labour to a £3bn a year investment in social security. It argues this will save money over time by reducing welfare need by raising incomes, reducing living costs and creating better employment opportunities. Austerity policies will have stripped around £37bn from social security spending by 2021.
Universal credit will help support over 7m people who are either jobless, ill or disabled, or in low paid work by the time it is fully rolled out in 2023. It was hoped the digital-only benefit would make the welfare system more efficient, incentivise people to return to work or work more hours, and reduce poverty.
However, it has struggled with a series of IT problems and design flaws which means it is not only running six years behind schedule, but proving both politically controversial and unpopular with many claimants. Meanwhile, cuts have reduced work incentives.
The Conservatives have introduced a series of piecemeal reforms since 2017 intended to address some of the issues for vulnerable claimants, but campaigners have argued these do not go far enough and more fundamental reform is needed.
Although Labour says it will “scrap” universal credit it seems it seems it will not junk all aspects of the payment, which merges six benefits into one. It will remain digital in nature, although Labour says it will end the current “digital only” approach and will hire 5,000 advisers to support claimants unable to access the internet or manage their claims online.
It will also allow claimants to be paid fortnightly rather than monthly as now and allow households to split payments between two adults. The current single household payment has been criticised as enabling domestic abusers to control family finances.
Benefit sanctions, the two-child limit on child benefit and the benefit cap – seen as unfair, ineffective and key drivers of child poverty – will be scrapped. The party already has plans to scrap the bedroom tax.
Commenting on the proposals, Adam Corlett, senior economic analyst at the Resolution Foundation, said: “Labour has set out some significant reforms, but they sensibly do not amount to actually scrapping universal credit. Now isn’t the time for another huge overhaul of our social security system.
“Instead, Labour have focused on reforming universal credit, and scrapping entirely separate benefit cuts that are set to drive up child poverty.”
