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Universal credit is here to stay, said Philip Hammond, as he announced an additional investment in the flagship benefit aimed at making it more generous for some low-income job seekers.
By injecting £ 1.7 billion into working allowances, the Chancellor reversed much of the universal credit cut made by his predecessor, George Osborne, in 2015, and implied that ministers were fully committed to the program. benefit restructuring, which had fallen far behind schedule.
Hammond's cash benefits may be enough to counter the threat of revolt by conservative backbenchers, who fear that some families of low-income workers receiving a tax credit will pay £ 200 a month after transition to universal credit.
"The universal credit is here to stay and we are investing the necessary funding to make it a success," Hammond told the House of Commons. He said it was "a necessary and long overdue reform" of the benefit system that would help create jobs and growth.
Hammond also announced the granting of an additional £ 1 billion envelope over five years to provide additional protection to people enjoying tax credits and other benefits that would be transferred to universal credit in the coming years. Details will be announced this year.
There will be "short-term" support from 2020, through which unemployed jobseekers will continue to receive existing benefits for two weeks after submitting their universal credit application, which will allow 39; lighten the long waiting period for a first payment.
The universal credit includes six active-age benefits in a single monthly payment, including the job-search allowance, the income tax credit and the housing allowance. Working benefits are the amount that claimants can earn before benefits begin to be withdrawn. Higher work allowances in theory encourage applicants to work or work longer.
The think-tank of the Resolution Foundation welcomed the increase in work allowance, saying that raising the threshold of £ 1,000 would bring an increase of £ 630 to low-income families, this which meant that universal credit was now more generous than the benefit system that it was replacing.
Torsten Bell, Executive Director of the Resolution Foundation, said: "Today's reforms will certainly not solve all the problems that some recipients face with universal credit, but they should make it easier to deploy in the coming months and months. years to come".
However, opposition politicians and charities have pointed out that ministers have not yet addressed the broader issues of social protection or structural problems related to universal credit, such as the long delays in the delivery of social security. Waiting before payment forced some families to go into debt or to use food banks.
John McDonnell, Labor Party's Chancellor of the Shadow, said: "The money pledged for universal credit corresponds to less than a third of the £ 7 billion of future social security cuts. and today's announcement on work allowances cancels just over half of the cuts made in 2015. "
Matthew Reed, chief executive of the Children's Society, said: "While the government has taken important steps in the right direction, it still has not taken enough action to address the serious global credit problems that threaten many people. families. "
Alison Garnham, executive director of the Action Group Against Child Poverty, said, "The increase in work allowance is definitely good news for families benefiting from". universal credit, but a larger rescue operation is still needed.
Hammond's striking approval of universal credit comes after criticism from two former prime ministers, Sir John Major and Gordon Brown, who said the changes could trigger levels of unpopularity in taxes.
Labor demanded that universal credit be stopped and fixed before the next stage of its deployment, which will lead to 2 million claimants for tax credits and employment and support allowances to the new system over the next three years. coming years.
The Chancellor has also been under intense pressure from conservative backbenchers and anti-poverty campaigners to restore the level of work allowances, considered by many to be essential if wants universal credit to maintain its initial objectives of work incentives.
Hammond paid tribute to the political architect of universal credit, the former secretary of labor and pensions, Iain Duncan Smith, now a backbench MP, "without the tenacity of which universal credit "would never have seen the light of day".
Duncan Smith oversaw the introduction of universal credit against Osborne's opposition and a series of enforcement disasters. He resigned from the firm in 2016 partly because of cuts in work allowances from the previous fall.
The Chancellor's announcement on work allowances was welcomed by the Joseph Rowntree Foundation, who described it as a "significant step forward" in the fight against workplace poverty, which she said would help ease the burden on women. low income families.
