UK 14 February 2019 The Amber Rudd audit: Is she really reforming Universal Credit? Since becoming Work & Pensions Secretary last November, she’s been lauded for “resetting” the new welfare system. But this is just spin. Getty Credit where credit's not due. Sign UpGet the New Statesman's Morning Call email. Sign-up Amber Rudd gets it, so the argument goes. Since her appointment last November, the new Work & Pensions Secretary has taken a different tone about the infamous Universal Credit welfare system to her predecessors. She is admitting its flaws, signalling change, and is being lauded in the press as pioneering a policy “reset.” There’s even a press release on the government website headlined: “Amber Rudd sets out fresh approach to Universal Credit.” But is it all just spin? Let’s look at what she’s actually doing: Spin: Scrapping the two-child benefit limit Reality: The unfair policy, complete with the “Rape Clause,” continues – just not for those born before the announcement One of Amber Rudd’s most publicised announcements was that the two-child benefit limit will not be applied retroactively to families that had children before the policy was announced. The two-child limit restricts the child element of Universal Credit and child tax credits to two children. It came in on 6 April 2017. The original Department for Work & Pensions plan was that any new applications for Universal Credit after January this year would be subject to the limit, regardless of when the children were born. Rudd has removed that last part – a politically beneficial decision. Punishing families financially for having more than two children before the limit was even announced is clearly unfair, whatever your politics. By doing away with this particularly egregious element, she has been painted as fair and compassionate. However, the two-child limit as a policy remains. It will affect all future families who need welfare; any third child born on or after the 6 April 2017 will still be punished for existing. It’s an unfair, classist policy – one that the UN inspector who investigated UK poverty last year put in “the same ball-park” as “China’s one-child policy”, calling it a “real perfect way to punish families” and questioning its economic wisdom: “The British population is ageing at a great rate, as foreign labourers become more and more excluded, Britain’s going to need workers; it’s a self-defeating policy.” But it probably won’t act as a deterrent anyway. People will just end up under more financial pressure and their children will suffer. No matter their socio-economic status, families change and are difficult to plan. Your new partner who you move in with may add more children to your household, pushing you over the limit, for example. That’s an attempt to create a new family unit, not an “irresponsible choice” to have more children (as seems to be the suggestion behind the two-child limit). Or you may be divorced or widowed, and meet someone who also has children, but be financially incentivised not to live together, or even be together – undermining Universal Credit originator Iain Duncan Smith’s obsession with family stability as a route out of poverty. Your child may have been conceived before the policy was announced, even if it was born after 7 April 2017 – something Rudd’s u-turn does not account for. Or, shockingly, you may simply want more children, or become pregnant by accident – everyday scenarios that aren’t limited to one “class” of people. The policy also keeps the hated “Rape Clause” in place – under which women can claim exemption from the policy for a third or subsequent child if they can show it was conceived via domestic abuse or rape. Women’s groups and the British Medical Association have warned that this process would be damaging for women. You also cannot claim the exemption if you live with the child’s parent, which puts women in abusive households in a difficult position. The DWP defends the clause by saying a healthcare professional, social worker or approved rape charity could give evidence on the woman’s behalf. Spin: Delaying the roll-out of Universal Credit and having a more cautious approach instead Reality: Delaying a vote on the roll-out, while sticking to the existing timetable – complete with the “test and learn” plan that was already in place before Rudd came in: no overall delay, pause or policy change A lot of cheery headlines accompanied Rudd’s decision in January to delay Universal Credit’s roll-out – something both the Labour party and poverty campaigners and charities had long been urging. A “pause” or “delay” has been a battle-cry of the policy’s opponents, so this move from Rudd made it look like she was listening to them. But this wasn’t a real delay. All Rudd actually did was postpone a vote in Parliament. Originally, MPs were due to vote on moving three million existing claimants onto Universal Credit as part of the managed migration process. Rudd simply pushed back a vote with a potentially embarrassing result for the government. Around two million people will move onto Universal Credit this year anyway – via a new claim or a change in circumstances that changes the benefits they need – according to a figure from the architect of the policy, Deven Ghelani. Managed migration is neither postponed nor cancelled. The government is still insisting that all claimants will be on Universal Credit by its existing deadline (prior to Rudd’s announcement) of December 2023. So overall, there’s no pause or delay. Instead, Rudd wanted MPs to approve a limited “test and learn” approach, starting with a trial scheme of 10,000 recipients. But this isn’t a fresh, measured process Rudd came up with – this has been the plan since her predecessor Esther McVey was in charge. Last October, McVey said she would migrate no more than 10,000 existing claimants onto Universal Credit until mid-2020. And at the same time, the DWP said managed migration would not begin in January 2019 but later in the year: “For a further year we will then begin migration working with a maximum of 10,000 people, continuing with our ‘test and learn’ approach.” So no, Rudd was not announcing a new, cautious plan. She was re-announcing an existing approach while disguising it as a delay. Spin: Making Universal Credit work in women’s best interests Reality: No plan to end single household payments, which have been accused of endangering women In a January speech laying out her changes, Rudd committed to “ensuring that household payments go directly to the main carer – which is usually, but not always, the woman”. Universal Credit is paid to one bank account per household, in the majority of households. Women’s charities and reports by both the Work & Pensions select committee and Home Affairs select committee have found this set-up risks a family’s income going entirely into an abusive partner’s bank account, trapping partners and children. Rudd has acknowledged the problem. But she hasn’t committed to anything concrete – she’s “looking at what more we can do to enable the main carer to receive the UC payment”, with changes due later this year. How will the DWP ascertain who is the “main carer”? Why won’t it commit to splitting payments, as campaigners have been calling for, to guarantee women receive some money? When will these promised “changes” arrive? Single household payments – the heart of the problem – will still be the default payment method, with “split payments” remaining an exception. Spin: Avoiding rent arrears and evictions by paying landlords directly Reality: A new system will put the onus on private landlords to request rent directly, but housing payments going straight to claimants remain the default Under legacy benefits, housing benefit was paid directly to the council or landlord, depending on your type of accommodation. But under Universal Credit, in most cases the housing element is paid directly to the claimant. This is a problem because payment delays, underpayments, and the challenge for tenants budgeting under a new system, have increased rent arrears and the risk of eviction. Landlords are more reluctant to rent to Universal Credit claimants. Rudd has acknowledged the “current system isn’t working for some” claimants and landlords, and has asked the DWP to “build an online system for private landlords, so they can request (where necessary) for their tenant’s rent to be paid directly to them.” The online system isn’t in action yet, so it’s unclear what process the landlord has to follow – and under what circumstances it’s considered “necessary” to pay rent directly. But the problem here is that the onus is on the landlord to change the way their tenant or potential tenant pays their rent. The claimant, who may be struggling to budget for their rent, still has no say. Why would a landlord bother going through this online process when they can rent instead to someone who isn’t claiming Universal Credit? Spin: Paying claimants more frequently Reality: Monthly payments are still the default Universal Credit is paid once a month to mimic a working salary – a change from the previous system, which generally paid twice-monthly. This payment in arrears means weeks of waiting when you first claim, budgeting challenges for those unaccustomed to monthly payments, and a change for those paid hourly, weekly or fortnightly in their work (as many workers in low-paid industries are). Claimants can request for the frequency of payments to change – and can receive budgeting help from their work coach – but the majority are paid monthly. Rudd has asked Jobcentre Plus to test out providing “more frequent payments for new claimants”. It sounds like a step in the right direction, but again, we have only heard “these pilots will start shortly” – we don’t know when, for how many people, and where. Also she has been careful to say it will be for “those genuinely in need” and “new claimants”, which still suggests a minority will be eligible. Monthly payments remain the default. Spin: Making childcare payments more accessible Reality: Unclear changes, left to Jobcentre staff’s discretion Childcare costs, which are reimbursed in arrears under Universal Credit, mean some parents struggle to pay upfront, or suffer when waiting for reimbursement. As I reported in a piece about Islington last year, this can be an obstacle to parents working. Rudd has therefore asked Jobcentres to use their Flexible Support Fund (money they can use at their discretion) for parents struggling to start work because of the initial month’s childcare costs. But this will rely on Jobcentre staff – who are struggling to manage the roll-out – following through, and doesn’t make a systemic change. Rudd has also “decided we should be flexible when parents are unable to report their childcare costs immediately, so that these costs will be reimbursed.” This suggests parents will be reimbursed childcare costs before providing receipts, but it isn’t clear. I’ve asked the DWP to clarify. Spin: Ending the benefits freeze next year Reality: It is due to end next year anyway, and it’s not Amber Rudd’s decision Rudd has turned against the benefits freeze, a four-year cap on benefits rising with inflation. She told ITV News that “it was the right policy at the time, it’s got one more year to run, I look forward to it coming off… I do not expect that to be renewed at all.” The benefits freeze began in April 2016 and is due to end next year anyway, so she isn’t calling for it to be scrapped in reality. And as for it being up for renewal, it’s not Rudd’s decision. She would have to persuade the Treasury. Spin: Admitting that Universal Credit leads to food bank use Reality: Announcing no new policies to fix this It was front page news earlier this week when Rudd admitted in the Commons that Universal Credit was increasing food bank use. (Analysing data from its network, the food bank charity Trussell Trust found food bank use has risen by 52 per cent in areas where Universal Credit has been fully rolled out for 12 months or more.) “The main issue which led to an increase in food bank use could have been the fact that people had difficulty accessing their money early enough,” she said. Her solution? “We have made changes to accessing Universal Credit so that people can have advances, so that there is a legacy run-on after two weeks of housing benefit, and we believe that will help with food and security.” But actually these policies to ease the food bank problem are not new. The “changes” to “advances” refer to tweaks to advance payments (upfront loans that are then taken out of your monthly payments) in last year’s Budget, before Rudd’s “reset.” It was announced then that claimants can repay advance payments more slowly from October this year (at 30 per cent of the standard allowance, down from 40 per cent), and over 16 months instead of 12 months from October 2021. The reference to “legacy run-on after two weeks of housing benefit” was also a policy announced in the Budget. This was for a two-week transitional housing benefit payment for claimants migrating to Universal Credit, to bridge the gap created by the monthly payment cycle. This means that Rudd hasn’t announced any fresh policies to follow up her admission that Universal Credit has been fuelling food bank use. The DWP has been approached for comment and information on these reforms. › Universal basic income: the idea that shows no sign of abating Anoosh Chakelian is the New Statesman’s Britain editor. She co-hosts the New Statesman podcast, discussing the latest in UK politics. Subscribe For daily analysis & more political coverage from Westminster and beyond subscribe for just £1 per month!