Alistair Carmichael, MP for the Northern Isles, today challenged the Secretary of State for Work and Pensions to think again about the way in which Universal Credit works. The new benefits system that has been gradually rolled out is leaving almost 57% having to borrow money in order to make ends meet according to research from the Joseph Rowntree Foundation. The research also showed that one in ten have to wait longer than ten weeks before receiving anything through the system.
Speaking in the House of Commons, Mr. Carmichael said:
“Those of us who remember the chaos around the introduction of tax credits can see the good sense of a phased roll out to Universal Credit, but I have to say to the Minister that if we don’t learn the lessons from the pilots, then we risk losing any advantage we gain. 57% of those who are applicants for universal credit are having to borrow money before their first payment, isn’t that alone enough to justify a pause?”
Responding on behalf of the Government, the Rt. Hon. David Gauke MP, Secretary of State for Work and Pensions, said:
“The system of advances is an integral part of Universal Credit, it has always been there, but we want to make that properly available. No one who needs support should have to wait six weeks before they receive any support, and what we are doing is making clear that people can receive an advance of their first month payment. That is then deducted off their next six months payments, and that is helping people deal with the cash flow issues in that first month. It is a sensible and pragmatic approach.”
Commenting after the exchange, Mr. Carmichael said:
“Universal Credit is clearly not working well on the ground. It must be wrong that three in every five Universal Credit claimants have to borrow money just to keep them afloat in the first six weeks of their claim. I welcome that the Minister has committed to ensuring that advances are properly advertised to claimants to ease cash flow problems, but there is more action needed to solve this issue.
“A free helpline, at least until the roll-out is complete, removal of the seven day waiting period, and removing the two child cap on benefits claims, are all essential steps if Universal Credit is to succeed in helping people back to work.
“I was disappointed that the Minister didn’t go further in his answer to commit to rethinking Universal Credit, and making it a system that works for struggling families across the country.”