Universal Credit – stop it and scrap it!

Image thanks to DPAC
Whistleblowers have said Universal Credit is broken while even the National Audit Office has savaged the new welfare system. Susan Pashkoff, Women’s Officer for Wanstead and Leyton CLP, updates an article she wrote for her local party newsletter.


As Universal Credit is set to be rolled out in Waltham Forest, we need to understand what the welfare policy of Iain Duncan Smith and Esther McVey has been since the Tories have been in power.

The central tenet to the Tory welfare reform hinges on conditionality; the majority of those on welfare benefits are believed to be voluntarily unemployed. As such, the argument is getting these lazy people back to work is essential. To this end, the principle of less(er) eligibility has been incorporated in the approach to social policy; this principle maintains that benefits cannot exceed what those that are in paid employment are receiving (in the 19th Century, it meant that the condition of life of those in the workhouses had to be worse than those outside). Essentially, it means that the lives of those dependent upon benefits has to be the worst possible one to get those “lazy people” back into work.

This ideology forms the basis for the overall benefit caps and the housing benefit cap (which also was used as part of a social cleansing of inner London and which did not allow for houses over 4 bedrooms to be covered on housing benefit). The bedroom tax, nominally an attempt to force people into smaller accommodations, also was part and parcel of this policy. As part of the 2015 welfare reform, housing benefits were scrapped for 18-21 year olds to save money. This put young people in danger if living in violent households and increased homelessness — on March 29th, in a major reversal, the government abandoned this policy due to rising homelessness of young people.

Impact of Austerity

The worst hit from the introduction of austerity have been disabled people and women. The situation is so bad, the UN has criticised the British government’s austerity policies for failing to protect the human rights of the disabled in education, the persistent unemployment and pay gap and undermining the human right of the disabled to live independently due to cuts to social and care budgets. The disabled face work capability assessments to get them off benefit and reduce the amount that they received. Under Employment Support Allowance testing (ESA), disabled people were forced to prove them were disabled; the creation of a Work Related Activity Group (WRAG) for those deemed to be disabled but probably capable of work forced disabled people to attend courses to get a bit more money than would be received as Job Seekers Allowance (JSA; this income differential has just been eliminated earlier this year, so those assigned to WRAG only get JSA). Additionally, the Independent Living Fund (ILF) was eliminated and categories in Disabled Living Allowance (DLA) were altered under Personal Independence Payments (PIP). The work capability assessment did not deal well with those that were not physically impaired; leading to people living with mental illnesses facing loss of benefits and homelessness.

86% of austerity has impacted upon women and their incomes. Given stagnation in money wages, decreases in working class incomes (due to benefit cuts and caps) and the shift from the usage of the Retail Price Index (includes housing costs) to the Consumer Price Index, benefits became linked to an index which was a far less useful measure of the cost of living.  As a result of these policies, real wages (wages related to costs of living) and also the income of working class people has decreased since the introduction of austerity.

If in paid employment, the majority of women are employed in traditional women’s labour which is paid lower than men even if the skills employed are the same.  65% of public sector workers are women who faced a wage freeze in the first year of Austerity; then a wage increase cap of 1% since then). Moreover, while more men lost their jobs initially, they were able to get full time employment. This was not the case for women who if they were able to find work, it was part-time work.

What needs to be noted is the fact that women are more dependent on benefits than men. Our wages are lower, our pensions are lower, women (especially lone mothers are far more dependent upon working child-tax credits if they are in paid employment, child tax credits and child benefit). If women are carers for the disabled and they lose their DLA (and now PIP) due to work capability assessments, they lose carers’ benefit but are still carers. Women are, on percentage, employed far more in part-time work (and that includes in self-employment) due to caring responsibilities (and it is they that are working two jobs more often than men). The state pensions are woefully inadequate, this means that women – who, on average, live longer than men — are living longer in poverty.

Universal Credit

Having set the stage,let’s talk about Universal Credit (UC). Iain Duncan Smith’s flagship policy was of course designed to function as part of the general attack on the welfare state. Already benefits were cut to the bone, means testing and work capability assessments were used to get the disabled off of benefits. Moreover, this was touted as a way to save money for the state. However, there is no question that it has actually increased costs (problem with the computer system that is meant to be the manner in which UC is administered). Speaking of computers since people are meant to be filing their claim for UC on computer, this means that they will need access to computers and the Internet. For many people on benefit, that means using the library to actually fill in the forms. Assistance and discretion that has always been done by workers in Job Centres+ will be one of the cuts; with the Citizens Advice Bureaus suffering cuts, who will help claimants fill out these forms?

Universal Credit is the new wave of benefits for claimants.  What’s new?

  • First, all your benefits are paid together in a monthly payment which you need to manage; that is part of training the poor to live within their means and budget their finances.
  • Second, while before Housing Benefits were paid directly to landlords, you now have to do that yourself. That has been updated to allow you to get the money paid to landlords; this is important as since it is a monthly payment, it meant that you may not have the money to pay the landlord having paid for food for your family, water, electricity, etc. One emergency could leave you in rent arrears. An additional problem is rising social as well as private rents, this will impact on pensioners  and those dependent on benefits.
  • Third, there is a bit of a problem with the waiting period for the benefits to arrive once you have signed onto UC. This delay (on average 4 weeks) could be up to 6 weeks; that puts people already in debt to cover rent before they receive the money and with little ability to pay back the debt and interest – being in arrears from the beginning of the system is a problem and will lead to homelessness.
  • Fourth, while benefits in a heterosexual couple were paid to women in the earlier system, now they are paid to the male partner. Needless to say, there was a reason why they were paid to women; it was to ensure women’s financial independence and make sure that the kids were covered.
  • Fifth, there is the rape clause, which Esther McVey has deemed an “opportunity for women.” While this is not explicitly part of Universal Credit, it is coming into force as UC gets rolled out. Strongly reminiscent of blaming the poor for their poverty and their inability to control their own breeding, this is a disturbingly sexist clause. Coming into effect in April 2017, child tax credits are limited to two children unless the third child is a child born of rape or domestic violence. Needless to say, if you are claiming this, the rape and/or domestic violence needs to be reported which puts women in a position of having to go to police and rape crisis centres. It is an incredibly discriminatory policy and can trap women in an abusive relationship due to fear of losing the tax credit. There is also a strong condemnatory tone of punishment for women who have more than 2 children. Women do not have full control of their reproduction due to religion and cultural considerations.  For Northern Irish women, there is still the issue of having to travel to get an abortion which is something that women receiving child tax credits will not able to do.

We must note the scathing attack on Universal Credit by the National Auditing Office (NAO) about the impact of Universal Credit. The audit states that not only will it actually cost more than the current system; but payments to claimants have been delayed on average of 4 weeks. This forces people on to food banks and creates rent arrears which for people on benefit are extremely hard to repay the debt and interest if they are able to borrow to cover it:

“The report reveals increases in rent arrears had been reported by local authorities, housing associations and landlords in areas where universal credit had been introduced, with some private landlords telling the NAO they have become reluctant to rent to claimants.

In three of the four areas the NAO visited, and for which data was available, the use of food banks increased more rapidly after the full service was rolled out to the area (https://www.independent.co.uk/news/uk/home-news/universal-credit-roll-out-report-beneifts-work-pensions-dwp-value-for-money-a8399026.html).”

Esther McVeigh’s response to the NAO report on Universal Credit:

“Referring to the NAO report, Ms McVey said it did not take into account the government’s recent changes to universal credit.

“Our analysis shows that universal credit is working,” she said. “We already know it helps more people into work and stay in work than the legacy system. “Once fully rolled out it will be a single streamlined system, reducing administration costs and provide value for money for all our citizens.” (https://www.independent.co.uk/news/uk/politics/universal-credit-dwp-esther-mcvey-work-pensions-benefits-commons-nao-report-a8409881.html).”

Several things are evident from her comments. First, given the destruction of working conditions, the low wages due to the race to the bottom the idea that people cannot survive on universal credit seems irrelevant to the Tories. Second, there is the reduced admin costs which we need to discuss. As said above, the system is meant to be done on computer. If all benefits are cut to the bone and if the aim is to get people off benefits as the motivation where else can cuts be made to cut the DWP budget? That leaves consolidation of job centres (note the closure of Leytonstone Job Centre+ with the loss of support staff and their relocation to Walthamstow), the closure of centres run by DWP and finally, the sacking of DWP social work staff. If everything is done on computer, why should the government pay workers to do this job? Already staff at the Job Centre are overburdened, those that leave on not being replaced. Perhaps they are expecting private companies to run this just like the work capability assessment … I am not a betting person, but that seems the next logical step.

Universal Credit is Not Fixable! Scrap Universal Credit!




Share this:

Leave a comment

Your email address will not be published.