Universal Credit: Budget Update

Thank you for contacting me about Universal Credit (UC).

UC is the biggest and most fundamental reform to the welfare state since its creation. It is a modern benefit based on the sound principles that work should always pay and those who need support receive it. It is also fair to taxpayers.

In 2010, the welfare bill cost each household £8,350. This was an increase of nearly £3,000 per household since 1997. Not only was this system failing to reward work, but it was the taxpayer bearing the burden.

I firmly believe that UC is a fair benefit that protects vulnerable claimants and ensures that work always pays. As UC is a simpler, more accurate benefit based on up-to-date information, it will provide people with their full entitlement. This means that 700,000 people will receive on average an extra £285 per month which they have not received under the existing system. Around a million disabled claimants will gain on average £100 a month through UC, because their award is higher through UC than legacy benefits.

UC will help 200,000 more people into work when fully rolled out, and empower people to work an extra 113 million hours a year. You might be interested to know that people on UC spend around 50 per cent more time looking for a job than they did under Jobseeker’s Allowance. Since 2010, we have seen over 3.3 million people move into work, which is on average 1,000 people each and every day. And youth unemployment has fallen by almost 50 per cent.

In this year’s budget, the Chancellor announced a £4.5 billion package for UC, which will make a real difference to the lives of claimants across the country. An extra £1.7 billion a year will be put into work allowances, increasing the amount that hardworking families can earn by £1,000 before their award is tapered away, providing extra support for 2.4 million working families.

This is on top of a £1 billion package of changes, providing two additional weeks of legacy benefits for those moved onto UC, a twelve-month grace period before the Minimum Income Floor is applied, and a reduction of the normal maximum rate at which debts are deducted from UC awards, from 40 per cent to 30 per cent of Standard Allowances.

Rightly for a programme of this scale, the priority continues to be its safe and secure delivery. The controlled expansion of UC started in April 2013 and I am pleased that significant progress has been made to date. By the end of this year, UC will be rolled out to every Job Centre in the country.

I hope this explains why I strongly support this important reform.

Thank you again for taking the time to contact me.

Craig Whittaker MP

November 2018