Iain Duncan Smith has had to defend the progress of Universal Credit. Photo: Getty
Show Hide image

That families can only just claim Universal Credit shows how disastrous it has been

The government’s reformed benefit programme is being rolled out to parents in the northwest today, revealing its slow progress.

Iain Duncan Smith, the Work and Pensions Secretary, has extended his “revolutionary” reformed welfare programme to some families in Britain for the first time today. The fact that parents, and initially just in parts of the northwest, are only just able to claim Universal Credit shows how much of a disaster the scheme’s implementation has been.

The term "Universal Credit" has quickly become a byword for government incompetence, IT failure, missed deadlines, and over-promising ministers, as it has encountered obstacle after obstacle, and been severely delayed as a result.

Although the problems with the scheme are well-known now, it is worth pointing out that this intended “revolution” in welfare distribution has been watered down to a very slow evolution. As the BBC reports, tens of millions of pounds had to be written off due to technical problems with the IT programme and also, according to reports, only 20,000 people are claiming it, rather than the 1m envisaged for this time by the DWP. Though Duncan Smith on the BBC’s Today programme this morning insisted that the number of people claiming is actually 40,000, this is still significantly lower than what was once the target.

The people already enrolled on the Universal Credit scheme so far have been single people and couples with no housing costs or family, ie. the simplest demographic to which to provide welfare, due to it being the least complicated in terms of the benefits it claims. Universal Credit prides itself on “simplifying” welfare provision by combining six existing benefits into one, so the focus so far on the least complicated claimants shows it is only very tentatively being rolled out.

On Today, Duncan Smith refused to accept that his scheme had so far only been targeting the “low-hanging fruit” of benefits claimants, saying, “we have deliberately set out to roll it out so each individual bit is tested… we’re now doing families. This is being deliberately done like this.

“It’s about making sure people can cope as they go into work, they can stay in work… If we do it carefully, and land it safely, they’re far better off.”

When asked about the ultimate deadline, due to the targets consistently having been revised down over the years, he said “it starts rolling out nationally from next year” and that rather than the original deadline of the bulk of people being on it by “approximately the end of 2017”, “we should have everybody on it by 2019”. He admitted that the initial deadline had been “artificial in the first place”.

Anoosh Chakelian is senior writer at the New Statesman.

Photo: Getty
Show Hide image

Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.