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Executive Leader Cllr Brenda Warrington

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Councillor Brenda Warrington, Executive Leader of Tameside Council

Time to Look Again at Universal Credit

Thursday, 23 April 2020


As the coronavirus pandemic continues to unfold, so does its impact on the government, the economy and our everyday lives. It’s true that many of the challenges we now face have been caused entirely by the coronavirus itself. However, in some cases, the virus has shined a harsh light on problems that already existed. Nowhere is this clearer than with Universal Credit.

As I’m sure that some of you may remember, Tameside was one of the first areas in the country to trial Universal Credit when it was being introduced by the coalition government. We concluded that while it could, in theory, help to simplify an incredibly complex system of benefits and entitlement the implementation was broken beyond repair. Worse still, its punitive sanctions regime often drove people into severe financial difficulties and away from the jobs market entirely. These findings have been backed up by a number of other local authorities and organisations over the years, including the prestigious Economic and Social Research Council and Parliament’s own Work and Pensions Subcommittee.

The impact of the coronavirus pandemic and the lockdown has meant that more people than ever are relying in Universal Credit as a financial lifeline during these most difficult of times. This includes the one million people on zero-hours contract, who faced uncertainly and low pay even before this crisis began. Many of our 5 million self-employed are also turning to Universal Credit to bridge the gap until the government’s Self-Employed Income Support Scheme comes online in June.

The figures we’re seeing on new claims bear out this grim reality. Since mid-March over 1.4 million people have signed up for Universal Credit. Those that do sign on will have to face the five-week waiting period before their first payment. This means that even those who were able to apply for Universal Credit on Day One of the lockdown will not be receiving any financial support until next week at the earliest.

My view on this waiting period has not changed from when Tameside trialled Universal Credit more than half a decade ago. Forcing people to go without any support for over a month, for no other reason than the process says it must be so, should never be allowed to happen. In a world of stagnating pay and zero hours contract, the idea that everybody has enough cash on hand to cover the gap is utterly detached from the reality on the ground.  To make matters worse, there is no guarantee that the DWP will have processed their claims by the end of the waiting period. I know for a fact that our frontline Job Centre workers are doing everything they can, but with up to 20% of them across the country self-isolating and literally millions of new claims to process there is only so much that they can be expected to do.

It is for these reasons that I echo the calls made by Jonathan Reynolds, our MP for Stalybridge and Hyde and the new Shadow Work and Pensions Secretary, to make fundamental changes to Universal Credit. The five-week waiting period must be scrapped entirely, child benefit must be paid out for all children instead of just the first two, and savings should not be taken into account when deciding payments. In the longer term, I would also like to see Universal Credit replaced entirely with a more trusted and less punitive system that takes into account the best practice in financially supporting people while also helping them into work.

This is not only the morally correct action, it may very well be essential to making sure that we return to normal once the pandemic has been defeated. A number of economists are saying that the economic damage from the coronavirus could match, or even exceed, the Great Financial Crisis of 2008. We cannot make the mistake of condemning Britain to another lost decade of austerity. The government has shown that they can take drastic action to protect citizens and jobs during the pandemic, they must now commit to doing the same to secure a future for the country after the coronavirus.

 

Posted by: Executive Leader


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