I have been concerned since its inception that one of the most damaging side-effects of Universal Credit is the way it frames the whole debate around Social Security provision and, having received broad cross-bench support, is perceived as the only viable way forward - give or take a tweak or two.
Universal Credit is a depressingly narrow vision for a Social Security system, imposing increasingly rigorous work search requirements on both those without jobs and part-time workers, regardless of the availability of actual jobs for them to do. You will work full time and if not, the system will ensure you waste any that is left over, rather than allowing you spare time to volunteer, study or, God forbid, enjoy a little leisure.
But it is in truth far less radical than the difficulties in implementation might suggest. Strip away the vast number of extra claimants introduced to the joys of conditionality, the shift to monthly payments and the 'digital by default' talk, and it is essentially the same old 'assessible income v applicable amount' concept and application of tapers to 'excess income' as the current means-tested benefits. Furthermore, the taper for UC, at 65% of any earnings above a variable disregard, remains far steeper than the top tax rate, ensuring that the poorest workers still keep less per pound of their earnings than the super-rich or the 'squeezed middle'. And yet it claims to incentivise work.
If you allow for the loss of Council Tax Support at 20% of 'excess income', at some stages of the calculation 85p in the £1 is lost and, through failing to allow for real work expenses such as travel and childminding costs, it still fails to 'make work pay' for some claimants. We've known this since the draft regulations came out, but last week a report suggested a 'fix' for this.
www.citizensadvice.org.uk/pop_goes_the_payslip_report.pdf
My fears about the mindset of many organisations in respect of UC were confirmed by this set of proposals from Citizens Advice. The report is headlined with a case study showing that while their lone parent example would be £3 per week worse off if she worked for an additional eight hours under UC with its current regulations (due to rising childcare costs), with the CAB's suggested amendments, she would be £12 per week better off.
Hurrah?
I sincerely hope I am not the only one to be seriously unimpressed by that. The last time I looked, the minimum wage was somewhat in excess of £1.50 per hour - it has recently risen to £6.50 - so to suggest that the benefits system is working anything like effectively when a low-waged worker cannot gain more than £1.50 for an hour's work is shameful. Of course gain is better than a loss, but should anyone really be expected to do an hour's work for no more than £1.50, especially when they are opting to give up time with their young child to do so?
Worse still, to pay for the necessary changes to disregards and expenses for families with children, it was suggested that the 65% taper be changed - to 70%. I was literally at a loss for words when I first saw that. If an organisation with a brief to look after the interests of disadvantaged citizens thinks it acceptable to put forward a plan slightly improving the lot of underpaid workers with children by picking the pockets of those without, we are in trouble. It cannot be our role to balance the books for IDS, surely?
How about being properly radical and proposing a tax and benefits system allowing everyone in work to keep at least the equivalent of the minimum wage, for each hour of work up to (say) 35 per week? Or that in-work benefit entitlements put workers on the equivalent at least of the 'living wage'? That earnings above the minimum wage at 35 hours reduce benefit entitlement by the same percentage as the basic rate of Income Tax, and no more, but discourage excess overtime with steeper tapers on income from hours worked in excess of 40 per week?
Some of these might be feasible, some might not, but shouldn't our aim be more than simply to 'make work pay' a few pence an hour more than 'the dole', and not by making that inhumanely low and hard to come by? About not merely 'making work pay', but making it pay fairly?
If IDS's 'UniCred' needs more money to do even the little it promises, then we should be unafraid to say so. If there isn't the money to make it do so, then let us scrap it now and cut our losses, because if 'UC' is introduced countrywide under this Government (or the next), we will be stuck with it for at least a generation, and we all deserve better.
As an aside, is it too much to ask that the next time IDS appears promising his reforms will 'make work pay', whoever is interviewing him runs through the cuts his Government have made to Tax Credits for working families (thus making this harder) and asks him what exactly the aim of these cuts was, if not merely to make UC look better?
