Meeting of the Parliament 06 November 2018
A great deal has been said about universal credit since last Monday’s budget. Much of the commentary has been balanced and constructive, but some of it has been less so and has—dare I say it—involved points that are more politically motivated than related to the situation on the ground.
Much of the rhetoric has again implied that the systems that universal credit has replaced were working well and addressing issues of poverty. That is not the case. Experts at the Institute for Fiscal Studies have pointed out that, with working tax credits, working for more than 16 hours a week made little sense, because the gain from earnings was negligible as benefits were withdrawn. That system was driven by the wrong incentives.
By 2011, the UK was one of the worst-performing countries in Europe for workless households—it ranked 28th out of 28. The system was far too complex and error prone. Claimants had to deal with layer upon layer of interacting benefits, which all had their own rules and procedures.