Liberal Democrats have played their part in making sure that the inadequacies of Universal Credit have been highlighted. In the debate on Wednesday,  Christine Jardine said:

We hear that, instead of it helping, as many as 1 million children could be pushed into poverty by 2020. That surely cannot be the legacy that my Conservative colleagues would want to leave for future generations. They surely cannot be content with what they are hearing in this Chamber from constituents and even their own Back Benchers: that families are facing rent arrears and the threat of losing their homes; that there is anxiety about missed payments; and that people are choosing between making those payments or feeding their families.

Citizens Advice Scotland has already seen more than 100,000 people, one in five of whom have waited more than six weeks for payments—and only 14 areas in Scotland have UC. We stand at an important crossroads: the Government have the opportunity to pause UC, ​address its many flaws and say to those coping with the cruel reality of this botched benefit reform, “We hear you. We recognise the problem and we will fix it.”

Stephen Lloyd caught Iain Duncan Smith out one of those economic with the truth moments:

Secondly, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), a former Secretary of State, said that the Joseph Rowntree Foundation has supported universal credit. I was a bit surprised by that, so I did a quick check. The JRF actually said that it would support universal credit if it was properly funded—I just mentioned the £3 billion—and if payment and waiting times were reduced, which is exactly what many people have been saying today.​

The media reports yesterday that the Government is ready to make changes on the amount of time people are waiting for money, but that isn’t the only problem with Universal Credit. It’s interesting that Labour now accepts the principles behind Universal Credit – that it should end the poverty trap. Until the Tories got a majority, that’s exactly what it would have done. There was enough money in there to ensure that people could move into work and not lose their benefits. Then May 2015 happened and George Osborne took billions out of the system.

So, our Work and Pensions Spokesperson Stephen Lloyd and Leader Vince Cable have written to the the Secretary of State for Work and Pensions to ask him to sort this out in the budget. They said:

Dear David,

We are writing to urge you to raise Universal Credit work allowances in the Autumn 2017 Budget.

The Conservative – Liberal Democrat Coalition Government introduced Universal Credit because we wanted to simplify the benefits system and make work pay. To achieve this second objective, we introduced work allowances. By allowing, for example, a single person to earn up to £1,332 a year before their payments were reduced, the Coalition ensured that everyone would be better off in work.

Cuts to the work allowance, made by the Conservatives as soon as the Liberal Democrats left government, have fatally undermined the whole purpose of Universal Credit.

Politicians, experts and charities from across the political spectrum have warned that reducing work allowances – even abolishing them entirely for people without children – will both worsen poverty and severely weaken incentives to work.

Analysis published this weekend by the Joseph Rowntree Foundation demonstrates that keeping the work allowance at current levels – as opposed to restoring it to its previous levels – will push 340,000 people into poverty in 2020/21. 310,000 of these live in families with children. A lone parent working full-time on the new national living wage, will be £16 per week worse off because of Conservative cuts.

The Centre for Social Justice estimates that by 2022 more than three million people will see their average income fall by over £1,000 a year because of cuts to work allowances. In October 2016, they recommended that work allowances be reinstated to 2015 levels. JRF today likewise recommends an increase in the work allowance.

The Government has already acknowledged the problems caused by the reduction of work allowances by reducing the taper rate in the 2016 Autumn Statement from 65% to 63%. However, this amounts to little more than cosmetic tinkering. The benefits of such a modest change are far outweighed by the work allowance reductions. Only increasing work allowances directly will reward people for entering the workplace, encourage more people to find work, and support those in low-paid work.

The Prime Minister took office describing the position of low income families in Britain today as among the “burning injustices” she wished to address. Permitting another Budget to pass without restoring the work allowance would make a mockery of that commitment. We urge you and the Chancellor to make good on the promise and the purpose of Universal Credit by increasing the work allowance in the coming Budget statement.

Yours sincerely

Vince Cable

Stephen Lloyd

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings