Universal Credit more like Universal Car Crash…

You may recall that in 2013, the coalition government launched a controversial new welfare policy: Universal Credit. It was designed to ‘simplify’ the current benefits system, which over 80% of the public at the time believed to be rife with false claims. This was according to the British Social Attitudes survey, which has since recorded much greater support for increased benefits spending. Six of the main benefits were rolled into one online form, in an attempt to streamline the application process. Although efficiency was the aim, this and many other aspects of Universal Credit have since been called into question.

The policy’s stated goal was to incentivise employment and encourage lower-income households to budget ‘responsibly’. Hence, payments are now monthly, rather than weekly like in the past. As predicted, this has led to an increase in householder debt, since people with lower incomes find it harder to budget for a whole month. But surely if unemployment in 2018 is at an all-time low, we can call the policy a success? Under normal circumstances, maybe. However, whilst falling unemployment tends to correlate with a rise in the value of wages, this has not been the case for some time. Living costs and homelessness have risen sharply over the past few years. In fact, in the five years since Universal Credit was implemented, food bank referrals have gone up by 46%, since benefits no longer adequately cover basic essentials such as food.

Now in 2018, Esther McVey, Secretary for Work and Pensions, has invited fresh criticism of Universal Credit after multiple reports surfaced condemning the scheme. They revealed that thanks to government spending cuts made in 2015, some three million people stand to lose over £2000 per year. When questioned, she merely brushed off the decision as ‘tough’, going on to justify it by saying that what people will lose in benefits they will make up for in work. Naturally, this begs the question – what happens to those who can’t work? It’s no surprise then, that those worst affected by the cuts have been up to half a million of Britain’s most severely disabled people. The loss of thousands of pounds means skipping meals, forgoing taxis to the hospital, and even suicide attempts are more common than ever under Universal Credit. Half of those in poverty either have a disability, or live with someone who does, and the new system has seen vital lifelines – such as subsidised cars, increasingly withheld. Working families have been negatively affected too, with over 74% of those who lost income after the move to Universal Credit being in employment.

What then, has Universal Credit really achieved? Only the official impact assessment can reveal the full scope of its effects, but the government has stayed suspiciously tight-lipped about it. Despite mounting Labour pressure, it’s unlikely we’ll see it published until the next election. Maybe then the public will find out just how deep the damage runs – or indeed if there is anything redeemable about the scheme whatsoever.

Dmitry Fedoseev