Professor Peter Taylor-Gooby comments on the ongoing issues around the government’s much-maligned Universal Credit rollout and funding.
‘Everyone knows that Universal Credit, bringing existing benefits together into one means-test, is a good idea. Everyone knows that you can’t make reforms on this scale and cut the benefits budget by something approaching a quarter and expect it to work.
‘Numerous experts – the Institute for Fiscal Studies, The Joseph Rowntree Foundation, CPAG, the Resolution Foundation, the House of Commons Library, BBC Fact Check, the Trussell Trust, the National Audit Office and the Archbishop of Canterbury – have been saying this for years.
‘All the paring away at the Universal Credit means test in the context of benefits held back below inflation, the benefit cap, council tax benefit, the cuts to rent benefit, tax credits, family credit, minimum wage rights for under 25s and cuts in support from local authorities has forced greater and greater numbers of children and families into poverty. Poverty can only get worse as further cuts planned by George Osborne from 2010 onwards, which now form the basis of Phillip Hammond’s fiscal plans, continue to bite.
‘So what’s new? Now it’s official. Esther McVey, Work and Pensions Minister, has admitted that Universal Credit will plunge more families into poverty. Tory back-benchers, including former Prime Minister John Major, and the scheme’s chief architect, Iain Duncan Smith, are pressing the Treasurer to finance Universal Credit properly, which will cost approaching £20bn.
‘So where do we go from here? There’s no spare money. The Prime Minister has already promised the NHS a bail-out. Hammond would have to abandon his economic programme or raise unpopular taxes to meet the need.
‘The most likely outcome is that the government will abandon Universal Credit and hope no-one who matters notices that this does nothing to solve the problem.
‘Poverty will continue to rise regardless of whether Universal Credit is ditched because the benefits that make it up have already been cut to the bone and will be cut even more in the government’s existing plans. It’s those benefits that people will have to rely on. There is nothing else.’
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