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4 October 2022

Universal Credit is cruel, inefficient and counterproductive – it must be scrapped

My friend risks being penalised for attending a job interview. Where’s the sense in that?

By Ben Ramanauskas

Last Thursday night my friend burst into tears explaining that the job centre was deciding whether or not to cut her Universal Credit payments because she had missed an appointment. The reason she missed her appointment was because she had a job interview. She had given the job centre plenty of notice, but her absence still had to be passed onto a decision maker because she had previously missed other appointments – for other job interviews, and once because she’d had Covid.

You don’t have to be an expert on the welfare system to see that this is an obvious flaw. Proponents of Universal Credit claim that it incentivises people to work, yet the system is designed in such a way that it in fact penalises people who are actively trying to find jobs.

This is not a bug in the system so much as a feature. Universal Credit is full of built-in frictions that prevent people from getting the resources they need to survive, right from the point of the lengthy application process and the long wait before a claimant actually receives any money. I had assumed these were set up deliberately as a way to deter people from applying for benefits, but it turns out that once a person is in the system things get even worse. My friend has been made to sit through patronising courses on finding a job and has to travel for over 30 minutes each way every week just to attend a two-minute meeting with an adviser. This is infantilising and a waste of her time – time which could be spent applying for jobs or attending interviews. It’s also a waste of taxpayers’ money and scarce public resources.

Universal Credit is a deeply cruel system, as anyone with first-hand experience of it can attest to. One of my relatives has suffered from arthritis for many years, which made it impossible for her to do her job, but when Universal Credit was introduced an assessor (with little to no medical training) deemed that she was fit to work, making her jump through a series of bureaucratic hoops just to get enough money to live. She was eventually able to successfully appeal against the decision and a doctor agreed that she was in no fit state to work. Despite the pain, suffering and anxiety it caused her, she was comparatively one of the lucky ones. It is common for the physical and mental health of people on Universal Credit to deteriorate thanks to the callousness of the system.

It is difficult to get the full picture of just how bad Universal Credit is given that when Thérèse Coffey, now the Health Secretary, was running the Department for Work and Pensions she suppressed the release of a number of reports, including on the impact of sanctions and on the deaths of benefit claimants. We do, however, know the impact of one benefit change: the two-child limit. It failed in its intended purpose of deterring low-income families from having more children, and instead it just made them poorer. We also know from official statistics that about 40 per cent of people receiving Universal Credit are in work but earning so little they rely on the state for support. Threatening to cut their benefits if they do not look for extra hours of work, as the government has recently done, will not help to lift people out of poverty. And it won’t save the taxpayer money either. Of those who are not working, many are caring for children or disabled adults.

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It’s time Universal Credit was scrapped and replaced with a true safety net – one which ensures people don’t fall through the gaps and can have enough money to not only survive but also thrive. A Universal Basic Income (UBI) would pay money to everyone, regardless of their circumstances, which could then be regained through the tax system from those who do not need it.

While this idea is too often condemned as a left-wing fantasy, it has an impressive list of supporters from across the political spectrum. As someone who has worked for a number of right-wing think tanks and as an adviser to Liz Truss, I can tell you that there is a strong free market case for a UBI. It would free people from a degrading system that forces them to rely on the whims of uncaring bureaucrats. It would give people the freedom to find the right job, retrain or even start their own business, providing jobs for others and increasing productivity. It would allow them to undertake socially useful activities such as caring for children or elderly relatives and volunteering, reducing the burden on public finances. Moreover, the bureaucrats themselves could then be freed up to do more important work, either in the private sector or in other parts of the public sector, further reducing the size of the state.

Universal Credit isn’t just a cruel system – it is inefficient and counterproductive, as my friend’s experience shows. It should be scrapped and replaced with a system which takes power away from the state and gives it to the people, and would allow everyone to flourish, regardless of their circumstances.

[See also: Liz Truss’s tax U-turn has emboldened Tory rebels]

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