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17 October 2018

Leader: Universal Credit was an avoidable disaster

Iain Duncan Smith and his acolytes recklessly dismissed warnings from experts - a preview of the Brexit debacle. 

By New Statesman

Theresa May has promised what neither David Cameron nor Ed Miliband ever did: the end of austerity. But fulfilling this pledge will be much harder than making it.

As if to prove as much, the Work and Pensions Secretary, Esther McVey, conceded on 11 October that “some people” would be “worse off” under Universal Credit, the government’s new social security system. Indeed, even Miss McVey understated matters. Based on current proposals, the majority of Universal Credit claimants will be worse off than they were under the previous benefits system. According to the Resolution Foundation think tank, once the scheme is fully implemented, 3.2 million low-income working households will lose an average of £2,500 a year.

The former Conservative prime minister John Major and Tory backbenchers have made alarmed comparisons with the “poll tax”, the regressive levy that doomed Margaret Thatcher’s premiership. But the surprise is that anyone should be surprised. As the New Statesman has documented for many years, Universal Credit is underfunded and chaotically managed. The new system was originally presented in 2010 as a transformative reform that would “make work pay”. Iain Duncan Smith, then work and pensions secretary, vowed that the programme would remake the welfare state and “improve the lives of millions of claimants by incentivising work”. Grandiose comparisons were made with the Beveridge reforms of the 1940s. The merger of six income-related benefits into one would create a simpler and fairer system.

However, owing to maladministration and a botched IT programme, Universal Credit’s implementation has been delayed eight times since 2013. It is now not expected to be fully operational until 2023, six years later than promised.

For the one million households who have already been transferred to the system, the promise of “credit” rings hollow indeed. They are forced to wait up to five weeks for their first payment, leading to debts, rent arrears and, in the worst cases, housing evictions. The Trussell Trust, which runs most of the UK’s food banks, found that demand for them in areas where Universal Credit has been in place for at least 12 months increased by 52 per cent. Frank Field, the chair of the work and pensions select committee, has warned that the programme is reviving the “hunger and destitution” that the welfare state was founded to eliminate and spoke of women in his Birkenhead constituency being forced into prostitution.

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Universal Credit’s problems are not merely administrative. Its potential advantages in “making work pay” were overstated. The amount that claimants were allowed to keep was progressively cut by the former chancellor George Osborne, now the bearer of several well-paid sinecures.

Mr Duncan Smith fought against the “salami-slicing” of Universal Credit but this does not absolve him of blame. Long before the government embarked on Brexit, Universal Credit demonstrated the perils of magical thinking. In defiance of evidence to the contrary, Mr Duncan Smith and his acolytes in the media insisted with evangelical certainty that only a lack of faith from others hindered the system. Those who sounded the alarm, such as the National Audit Office, were casually dismissed and even impugned as enemies. When inevitable U-turns were made, they were recklessly late.

The Tory Brexiteers, not least Mr Duncan Smith, now exhibit a similar disregard towards the Irish border question. Rather than offering practical answers, they invest their faith in “technological” solutions, or insist that the return of a hard border to Ireland is a price worth paying for UK withdrawal from the customs union and the single market. It is not.

The English philosopher Michael Oakeshott asserted that “to be conservative” was “to prefer the familiar to the unknown… the tried to the untried, fact to mystery, the actual to the possible”. Yet as the utopian indulgences of Brexit and Universal Credit demonstrate, too many Tories have forgotten the lessons of his scepticism. 

This article appears in the 17 Oct 2018 issue of the New Statesman, Europe’s civil war