Home > News > Universal Credit – a problem for all of us

So we are shortly to see the roll-out of Universal Credit in our area, and I very much hope that this can be done with minimal disruption and without causing hardship. But I fear that those are vain hopes indeed, to judge by the chaos that has beset the Government’s clumsy roll-out of their flagship Universal Credit programme to date.

It is very easy to agree that our benefits’ system needs simplification. I am certainly not against the principle of reform, but it is much more difficult to design the perfect system. Households are all different and people’s circumstances change, whether by increasing hours worked, moving from one job to the next, the children growing up or moving in with a new partner.

And let’s remember that in very many households in receipt of benefit, there is at least one adult in work. Tax credits and housing benefit are paid to those whose household income is deemed too low to meet the family’s needs. The truth is that the taxpayer is very often subsidising the low wages of employers, some of whom are corporate giants off-shoring profits. That’s why we need a real living wage – one that people can actually live on and is paid not just to the over-25s but to workers from the age of 18. That is the real way to make work pay, which is supposed to be part of the rationale of Universal Credit.

There are some specific features of Universal Credit that are particularly worrying, not least that it is paid once a month to a nominated head of household. There is a worry that in abusive or controlling relationships this will become yet another power tool. Much has been made of the fact that after a considerable fuss by Labour MPs and others in Parliament, the Government has cut the initial waiting time from six weeks to five. But that is still too long for people who are used to living hand to mouth.

In the areas where the pilot has been rolled-out, many people who have never got behind with payments in their life have fallen into arrears with their rent whilst waiting for their first Universal Credit payment. And it is only a five week wait if there are no delays. There is also a knock-on effect of these widespread arrears on the cash flow of housing associations, which may have to put on hold their repairs’ programme or development work. Here there will be a direct impact on Carmarthenshire County Council, which is landlord to some 9,000 properties.

And now we have the chaos surrounding free school meals, with some families on Universal Credit entitled and others not. Instead of getting the sums and cut-off point correct to start with, the Government announced it would give free school meals to all children in families receiving Universal Credit and then sort out later who was not entitled. The Children’s Society has warned that the recently announced threshold will lead to a ‘cliff-edge’ for some families, who would be better off taking a pay-cut than losing the support access to free school meals provides. What a disgraceful way to implement a system.

But we must not let the very justifiable concerns about Universal Credit lead us to forget the monumental cuts that this Government has made to working age benefits – a real attack on the working poor that has driven many more children into poverty. Cuts to tax credits, which are paid to people in work, have not only had a direct impact on many local families but, according to figures obtained from the House of Commons library, have sucked a whopping £794 million out of the Welsh economy. This makes absolutely no sense at all because people on low incomes tend out of sheer necessity to spend money quickly in the local economy, helping to stimulate growth and helping local businesses survive.

And that is not all. Never, not even under Thatcher, was the link between benefits and inflation broken, but that is what has happened in the last seven years with the cumulative impact really taking its toll. Whilst the bedroom tax may be history for the media, it is certainly not history for the households who are living with that housing benefit cut because there are no smaller properties to downsize to, particularly in rural areas.

So let’s put Universal Credit in context… a context of cuts that have seen an unprecedented growth in the use of food banks. These cuts have not just harmed families, but also the wider local economy. I am sure staff in the Department for Work and Pensions and local housing offices will be doing their best. But having spoken to MPs where Universal Credit has already been rolled out, I do have a feeling of deep foreboding about the impending roll-out of Universal Credit in Carmarthenshire, and will certainly be making myself available to help where there are difficulties.


This article featured in the Llanelli Herald on Friday 16th February 2018