Work and Pensions David Gauke defends Universal Credit

Work and Pensions Secretary David Gauke hit back at critics of the Universal Credit benefits system today – saying it improves the chances of benefits claimants getting into work.

A group of Tory MPs led by Heidi Allen have demanded a delay in the roll out of the scheme, warning of lengthy delays in claimants receiving their money.

Over the weekend, former Tory Prime Minister Sir John Major called for a review of Universal Credit, claiming it was ‘operationally messy, socially unfair and unforgiving’.

But in a robust defence of Universal Credit, Mr Gauke confronted his critics calling for the roll out to be stopped, saying it would mean fewer people in work.

He also credited the system with helping Britain achieve its record employment rate. 

David Gauke MP fiercely defended the controversial Universal Credit welfare system during Work and Pensions Question Time today 

He told DWP Questions in the House of Commons: ‘Universal Credit is giving more people the opportunity to get into work and progress in work.

‘The personalised support that is provided by jobcentres where Universal Credit has been rolled out is proving to be effective.

‘To those people who call on me to stop the process, I say that once fully rolled out, Universal Credit is likely to mean that 250,000 more people will be in work than would otherwise have been the case. I will not deny those people that opportunity.’

He pointed to figures suggesting that those who go onto the UC system are more likely to be in work six months later than if they had remained on the old style benefits system. 

A group of Conservative MPs headed up by Heidi Allen has called for a halt in the roll-out of the scheme over delays in payments for claimants 

A group of Conservative MPs headed up by Heidi Allen has called for a halt in the roll-out of the scheme over delays in payments for claimants 

They are also more likely to be earning more, he said. He insisted the system was being rolled out ‘gradually and sensibly’.

But Mr Gauke came under fire from Labour MPs who claimed families could be left destitute and homeless at Christmas as a result of the extension of the system later this year.

Labour’s Frank Field, chairman of the Work and Pensions Select Committee, asked for a guarantee that ‘none of our constituents will be faced by hunger, near destitution, for the lack of money over the Christmas period, please?’

Shadow work and pensions secretary Debbie Abrahams claimed Universal Credit was causing ‘debts, rent arrears and even homelessness up and down the country, with many of the claimants already in work.’

Universal Credit is a a radical reform to the benefits system drawn up and instigated by Iain Duncan Smith, which combines six existing benefits onto a single payment.

Chairman of the Work and Pensions Select Committee Frank Field, asked for a guarantee that 'none of our constituents will be faced by hunger, near destitution, for the lack of money over the Christmas period, please?'

Chairman of the Work and Pensions Select Committee Frank Field, asked for a guarantee that ‘none of our constituents will be faced by hunger, near destitution, for the lack of money over the Christmas period, please?’

Unlike the existing benefit regime, claimants are encouraged to find work because they do not lose vast sums from benefit payments as a result. 

Instead benefit cash is gradually reduced according to earnings. 

The system is due to be rolled out to tens of thousands more people in the coming months.

There are currently 590,000 people on Universal Credit in England and Wales, with around 50,000 new claims made each month. 

The controversial benefits system was brought in by Iain Duncan Smith MP (pictured) during his time as Work and Pensions Secretary 

The controversial benefits system was brought in by Iain Duncan Smith MP (pictured) during his time as Work and Pensions Secretary 

Ministers want to move 12million more people on to the new system by 2022.

Critics say that because the first payment is made in arrears, claimants are waiting six weeks or longer to receive their benefits, forcing them to turn to food banks and loan sharks.

At last week’s Tory conference Mr Gauke said he would tweak the system to ensure claimants get advance payments quicker. 

Around half of new claimants already receive up front payments which are then deducted from future payouts.

On Monday, he told the Commons that the wider rollout was proceeding ‘gradually and sensibly’.

‘Nobody who needs support should have to wait six weeks before they receive any support, and what we’re doing is making clear that people can receive an advance of their first month’s payment.

Claims of widespread dissent on the issue on the Tory backbenches were not evident. Miss Allen said the new system of advance payments was treating the

symptoms rather than the cause of the problems. But former minister Andrew Selous said he warmly welcomed the new arrangements.

Former work and pensions secretary Stephen Crabb said one of the reasons so many people were in work was the government ‘don’t let people languish for years on out-of-work benefits’.

Q&A 

 What is Universal Credit?

A radical change to the benefits system which combines six payments – including tax credits, housing benefit and income support – into a single, means-tested payment. Designed by Iain Duncan Smith, it streamlines the benefits system, reduces error, fraud and poverty, and – crucially – encourages people off benefits and into work.

How does it work?

Over time claimants are shifted off the existing benefits system and on to Universal Credit. Their benefits should be adjusted automatically if their wages change. Unlike the old system, their benefits will not be slashed if they find work, take on longer hours or earn more. For every pound they earn above a certain threshold, they will keep 37p of benefits.

What is the timetable?

After teething troubles with the Department for Work and Pensions’ computer systems, the timetable for Universal Credit slipped repeatedly. The original plans suggested around six million claimants would be on the scheme by next year. But there are currently around 590,000 on Universal Credit in England and Wales. Over the next five years, another 12million more are expected to move across to the new scheme.

Why a six-week delay on payments?

Unlike traditional benefits, the credit is paid in arrears, based on your earnings in the previous month. There is a further week for administration, and another week delay was added by George Osborne when he was chancellor to save money. But even before the latest changes to the rules around half of claimants were given temporary loans, which were deducted from future payments.

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