Tag Archives: universal credit

LibLink: Stephen Lloyd: Universal Credit was meant to make work pay – it’s causing nothing but grief, pain and anger

Our social security spokesperson Stephen Lloyd has been talking about how badly the Government has cocked up the implementation of Universal Credit for a while. We supported it in coalition but as soon as we were consigned to the back benches, depleted, the Tories ripped loads of money out of it.

He’s now written for the Huffington Post about what a nightmare this new system is.

And a crucial part of this incentive was the Work Allowance. This is the maximum amount a UC claimant can earn through employment, before their benefit payments are reduced. However in the Summer 2015 budget, with the

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Universal Basic Income and the Welsh Perspective

In Wales, like the rest of the UK, we are seeing increasing homelessness and food bank usage. The UK Government continues to roll out a Universal Credit system that will exacerbate this poverty. No compassionate politician can resign themselves to worsening poverty. We need to look for progressive solutions and to continue our opposition to government policies that demonise the poor.

One possible solution is a Universal Basic Income (UBI), an idea that has been the subject of much debate across the political spectrum, including within our own party. UBI is a conviction that people seek purpose, and – if given the opportunity and freedom – will usually make the best decisions about their lives – a great Liberal principle. It must be a conversation about how we live, not just how we earn.

Opponents of UBI argue that it would damage economic growth by leading fewer people to work, but I think this view underestimates people. Money is only one factor driving us to work. I suspect that most who work primarily for money would take UBI as an opportunity to make more money, rather than not work at all.

While many would likely choose to work less, this is not necessarily bad. They may do so to spend more time with their family, achieve a better (and healthier) work/life balance, upskill themselves, undertake charity work or care for loved ones.

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Stephen Lloyd calls for action to help victims of domestic violence through Universal Credit

I’m really glad to see that Stephen Lloyd has written to Esther McVey to ask for action to reform Universal Credit to ensure that victims of domestic violence have access to their own money.

The Scottish Party’s landmark Social Security Bill allows for the default splitting of payments between members in a household, but ideally we need to find a solution for the whole UK.

At the moment, the benefit is paid to one person, usually the man.

If domestic abuse is going on in a relationship, there is likely to be financial abuse too so it’s important to ensure that each …

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Rise of Foodbank Use Linked to Universal Credit

I’ve just spent some time reading Early Warnings, Universal Credit and Foodbanks. In it, the Trussell Trust reveals the rise of foodbanks linked to the roll-out of Universal Credit.

The statistics are sobering. From April 2017 to March 2018, the Trussell Trust’s foodbank network supplied 1,332,952 three-day emergency food supplies. This was a 13% increase from the year before. Of these, 484,026 supplies went to children.

I will pause and let you process that.

Our families are so hard up, not being given enough money to live on, that almost half a million children have been found in need of emergency food supplies.

The main reasons for being referred to a food bank were:

  1. low income (on benefits, not earning)
  2. benefit delay
  3. benefit change
  4. debt

I have argued before that a universal basic income would remove the first three reasons – if everyone in the country gets enough to live on, you eradicate the lowest level of poverty instantly. UBI does not need to be high – £4500 has been shown to be a workable figure which keeps food on the table for families, removing children from extreme poverty.

The Trussell Trust shows the figures going back to 2012-13, when the number of 3-day emergency supply packs given out was 346,992. Almost four times as many packs are being given out now.

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Lib Dems: Universal Credit could lead to up to 1.3 million evictions

New data released yesterday by the Department for Work and Pensions (DWP) reveals that only 6% of Universal Credit claimants in the private rented sector have their rent paid directly to their landlords, compared to 35% in the socially rented sector .

This is despite calls by Liberal Democrat DWP spokesperson Stephen Lloyd to make payments to landlords default. Lloyd has argued that maintaining the status quo will lead to many of the 1.3 million benefit claimants in the private rented sector being evicted, and potentially made homeless.

According to the Residential Landlords Association, 73% of landlords still lack confidence in renting to tenants on Universal Credit due to uncertainty that they will be able to recover rent arrears, while 38% have already experienced UC tenants going into arrears.

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Economic Implications of Autumn Budget

Liberal Democrat Brexit Spokesperson Tom Brake commented:

“Instead of a bright future for Britain, Conservative plans will see a £65bn hit to tax receipts, slashed wages and higher borrowing.

The Government found £3bn to spend on Brexit, but nothing for our police or social care.

The Chancellor has completely failed to show the ambition needed to tackle the housing crisis, build the infrastructure the country needs or fix Universal Credit.”

And here is the breakdown of the economic costs:

1. £65bn hit to tax receipts: Tax receipts have been downgraded by £65.4 billion over the five-year period compare to …

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Lib Dems step up attack on Universal Credit

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:

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Lib Dem Conference highlights – the Universal Credit Debate

On of my highlights of Conference was the debate on the emergency motion on delaying the rollout of Universal Credit because it is turning into a disaster for the people who are forced to claim it. People have to wait 6 weeks or longer for money. Imagine what that is like if you have no savings to get you through – a situation many people on low incomes will face.

The idea of Universal Credit is a very good one. It aimed to end the poverty trap which stopped people on benefits from getting work because it cost them to do so.

I made a speech from a Scottish perspective, outlining the principles of accessibility, fairness and confidence that were in our manifesto on social security and observing that Universal Credit meets none of them in its current form.

Other speakers gave some pretty harrowing examples of how people could lose their homes and have to rely on food banks to get by.

I am really hopeful, though, that we really are going to take this stuff to the Tories and try and get things changed.

The reason for my optimism is our new Department of Work and Pensions spokesperson Stephen Lloyd. Remember all that energy he put in to regaining his Eastbourne seat? He seriously never stopped campaigning after 2015. Well, that energy and determination is going in to opposing the Tory Government and building alliances across the Parliament to force the Government to think again. Here, in full, is the speech that he made in the debate:

The Tories’ reputation for competence is an oxymoron of epic proportions. This is a party who have politicised our police force with their ridiculous introduction of police and crime commissioners, prevented councils from building new council homes from the receipts of Margaret Thatcher’s huge council house sell-off programme decades ago, which is a direct cause of today’s appalling housing shortage – and then today the complete shambles of what they’ve done with Universal Credit. Competence is not a word which springs to mind!

The original concept of UC was ‘to make work pay’ and when we supported it in coalition it would have done. Since then though, over £3bn has been taken out of the programme. The work allowance, for instance, an amount people on benefits can earn before those benefits start being reduced, has been slashed to the bone. In some cases – to zero!  And the taper rate, which determines how much people get to keep of their benefits for every extra pound earned, has also been cut to ribbons!!

This has rendered the entire principle behind universal credit – to make work pay, something I and the Liberal Democrats passionately believe in – utterly worthless.

Universal credit is no longer a progressive, reliable policy; it is a complete train wreck. And the Conservatives are responsible!!

It gets worse. Housing payments made directly to the tenants; something I fiercely opposed at the time when I was on the Work and Pensions Select Committee – telling the ministers that it would lead to a shocking rise in rent defaults. And I remember so clearly the then Secretary of State chiding me for ‘not trusting that tenants would pass the money on to their landlords’….

The result?, and this is even before the full national UC rollout-out, have been every bit as bad as I feared; if not worse!

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Scottish Parliament calls for rollout of Universal Credit to be halted

Alex Cole-Hamilton was one of the MSPs calling for the rollout of Universal Credit to be halted during a debate in the Scottish Parliament today. Only the Conservatives defended the continued rollout.

We know that people are having to wait up to 6 weeks for any money at all. MSPs had some real horror stories to report which you can see in the full record of the debate here.

Alex’s speech was very well crafted – and it was candid, too. He both acknowledged and distanced himself from the Liberal Democrat role in the coalition government’s welfare reform. However, he was able to show that without us there, the Tories have done a great deal worse. Here’s his speech in full.

I often speak with hyperbole in this place about the various responsibilities that we as decision makers discharge both in this Parliament and at Westminster, but the safety net that we provide for those who, for whatever reason, cannot provide for themselves should be the measure of any civilised society. My party has a proud history in the genesis and introduction of the welfare state in the early days of the 20th century, with the first state pension introduced under Lloyd George. In the 1940s, that great Liberal William Beveridge was the catalyst for the advent of social security when he identified the original “giant evils”, as he described them, of ignorance, idleness, squalor, want and disease. It is a failure of progress that, if we strip out the antiquated language, many of those evils still hold sway in our society today.

We should remember that, until this decade, the systems of welfare in this country had not undergone significant reform since their introduction, despite generations of incremental modification. For decades, welfare reform was sought by poverty campaigners, third sector organisations and academics so that we could dispense with unneeded red tape and inject much-needed social mobility into the system.

It fell to my party, in its period of coalition government, to co-preside over that much-needed redesign. I would, however, that we had had different bedfellows in that task. There are elements of the system that underpins the process that I take no pride in at all, and there are aspects of the new system that I still find shameful. Nevertheless, I am glad that we were there, for I dread to think of the welfare system that our Conservative partners would have designed unencumbered. We all saw the measure of the ideological compass behind Conservative social policy in the ill-fated manifesto that Theresa May published in the spring.

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Lord Jonny Oates at the Pudding Club at York

Lord Oates

I was delighted to welcome Lord Jonny Oates to York last month for a visit to our annual Pudding Club – one of the highlights of our local parties social calendar!

Lord Oates, who was recently made a life peer after serving as a councillor in Kingston Upon Thames and later as Chief of Staff to Nick Clegg, highlighted his concerns about proposed cuts to Universal Credit to local party members in York.

As readers will know, last year George Osborne was forced to re-think cuts to working tax credits after a local and national campaign by the Lib Dems. The changes were set to hit 8,000 families in York, but the Chancellor said households claiming the benefit would be helped by “transitional protection” as they moved to the new single Universal Credit.

Work and Pensions Secretary, Iain Duncan Smith, claimed that “nobody will lose any money on arrival on universal credit from tax credits”. Many residents in York were reassured and pleased that a U-Turn had been made.

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Another day, another time Labour doesn’t bother turning up to defeat Government in Lords

You would think, wouldn’t you, that if there was a chance to defeat the Government, especially if it was to do with helping out low paid workers, Labour Lords would show up, wouldn’t you?

Certainly that would be a triumph of hope over experience in this Parliament, given that they never bothered to kill of the tax credit rise when they had the chance. Nor, of course, did they turn up to secure votes at 16.

Again tonight, they failed to show up to vote for a Liberal Democrat motion to get rid of the cuts to Universal Credit from April 2017. These are exactly the same cuts that were going to happen to tax credits.

Speaking after the defeat of the Lib Dem motion (by 91 votes to 202, which is a pretty spectacular turnout for our peers, Lords Chief Whip Dick Newby said:

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Lib Dem amendment aims to repeal £1000 cut for low-paid families

The Liberal Democrats have tabled an amendment which would stop the Chancellor’s planned cuts to Universal Credit which are still in place, meaning that families on the lowest income will face a similar annual cut in income as those who receive tax credits. Osborne stopped the tax credit cuts after political pressure but the Universal Credit cuts are still planned to go ahead.

The changes mean that anyone applying for Universal Credit from 2017 would be £1000 worse off.

Work and Pensions spokesperson Zahida Manzoor said:

George Osborne claimed he listened to concerns about low income working families losing out when he U-turned on Tax Credits, but in fact he has simply delayed the pain.

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Farron stands up for families on low incomes facing cuts in Universal Credits

Tim Farron has challenged Conservative and Labour parliamentarians to join with the Liberal Democrats to overturn the Government’s proposed cuts to Universal Credit. These are almost identical to the cuts to tax credits which the Chancellor reversed in his Autumn Statement. It is surely only logical that the changes to Universal Credit should also be reversed.

The Party is to put an amendment repealing those changes. It will be discussed as part of the Committee stage on the Welfare Reform and Work Bill in the New Year.

Tim Farron said:

The first big political battle of 2016 is already looming.

The Liberal Democrats worked hard to stop Tax Credit cuts and we won’t let the Government bring it in through the back door.

The Prime Minister and Chancellor claim they want to make work pay, but cuts to Universal Credit will mean people pocket less of what they earn.

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The next housing crash

It’s not only the Tory crackdown on tax credits for families that will hit the working poor: it’s the Conservatives’ multiple mistakes on social housing that will do the most damage to our society. The problem is, these are less well-understood. Yet added together, they are set to cause a social housing sector crash almost comparable to the banking crash.

This is probably unintended – not least because there’s not one single policy that’s driving this. It’s the combination of a series of separate decisions that are coming together to fatally undermine the finances of many social housing providers, especially housing associations. More cuts in tax credits and benefits of course cause problems to the social housing sector by themselves – because they are certain to lead to greater rent arrears. But it’s only when you add in other changes, like the way benefits will be paid in the future, imposed cuts to housing association rents and the ideologically driven extension of the Right to Buy to Housing Associations, that the full disaster facing us becomes clearer.

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Lord (Archy) Kirkwood writes… the challenge of financial inclusion

It is a stark fact that while we are a global leader in financial services, financial exclusion is still rife: some two million adults in the UK don’t have a bank account and an estimated two million people took out a high-cost loan in 2012 as they were unable to access any other form of credit. Nine million have no access to mainstream credit, either because they are unbanked or are not able to access credit facilities through their bank. Meanwhile, the level of unsecured consumer credit has tripled in the past 20 years, reaching a staggering £160.4 billion in 2014 while only 41% of households have savings that could tide them over a period of crisis in their finances.

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The Independent View: Universal Credit..will it work?

When the first Universal Credit (UC) pilot was launched in Ashton-under-Lyne last week, much attention was paid to the practicalities of the new benefit, from the timetable to the IT system, the challenge of online claims to the problems with monthly payments. A new report published this week by Child Poverty Action Group and the TUC, however, considers the bigger question of whether UC can deliver on its broader objectives, and in particular on how the new benefit can truly ‘make work pay’.

UC relies on two key design features to deliver on this promise. First, it allows claimants who …

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The Independent View: Tax threshold changes – why the gains don’t reach the pockets of low earning families

MoneyIncreasing the personal tax allowance to £10,000, to allow workers to keep more of their earnings before they start paying tax, sounds like a no-brainer as a way of helping hard working families trying to manage. However, a closer examination tells a different story – many poorer working families will keep only a fraction of the increase in net pay. This is because most of it will be deducted from any housing benefit or council tax support they receive. Higher income families in contrast keep all the net gain.

A single person …

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Jenny Willott MP writes… The Welfare Reform Bill – What’s happened on ESA?

Benefits are not an easy subject to get your head around: we have a benefits system with enough acronyms, assessments, taper rates and tax credits to make your head spin. That’s why this Government is finally undertaking a hugely important and long-overdue reform of benefits.

Universal Credit will replace the complicated mix of tax credits, JSA, ESA, Housing Benefit and so on with one simple benefit. And the Universal Credit is why the Welfare Reform Bill is so crucial. It will revolutionise the way we support those who are unemployed, disabled, sick or caring for a loved …

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Lord German writes… A benefits system that works: the Welfare Reform Bill in the House of Lords

As Co-Chair of the Parliamentary Party Committee on Work and Pensions the Welfare Reform Bill has absorbed most of the past year. It is now in the final stages of passage through the House of Lords. There has been some negative press surrounding the Bill, which is clouding aspects that have been long term goals of the Liberal Democrats.

A big first step is being taken towards our long term ambition of merging tax and benefits. Our benefit system is the most complex and cumbersome system in the developed world. It requires an annual book to be published which explains …

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The Independent View: Lib Dems need to champion new ideas for tackling child poverty

Figures released this week by the IFS show that the UK will witness a severe and sustained increase in child poverty over the coming decade, with almost a quarter of British children set to be living in relative poverty by 2020, compared to one fifth in 2009/10. This is despite a projected 7 per cent reduction in real terms median income over the next three years, reducing the amount of income it takes to cross the poverty line.

These figures highlight the growing gulf between the targets set out under the Child Poverty Act, which require the government to reduce …

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What the think tanks are saying: The IFS on the Universal Credit

The Welfare Reform Bill was introduced to Parliament on the 17th February. It involves the biggest changes to the welfare system in at least 20 years, probably a lot longer. It includes the Universal Credit, intended to significantly reduce the poverty trap, by making it clearer to those on benefits that they would be better off in work.

A month ago, the IFS published “Universal Credit: much to welcome, but impact on incentives mixed”. Well worth reading. Here is a brief overview of what they say:

  • benefits will remain the same as under the present system

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Welfare Reform Bill published today

The Government’s Welfare Reform Bill is being published today and its measures are mostly as previously trailed. The big policy in it is the Universal Credit – a major simplification to a horrendously complicated benefits system – and a very Liberal Democrat policy.

Because of the heavy previous trailing of the Welfare Reform Bill’s measures there are no major surprises in what it proposes but there are three respects in which it shows the outcome of the at times very lively debate within government – mostly, though not always, Liberal Democrat versus Conservative – about its contents. In that respect, …

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Opinion: what Ed Miliband should put on his blank sheet of paper – part 2

Ed Miliband has invited Lib Dems to make suggestions for his 2015 manifesto. Though I’m suspicious of his motives, and I’m a supporter of Nick Clegg and the coalition, I think we should respond to this invitation with a public discussion of what Liberal Democrat policies should be from 2015.

If he takes up the suggestions, so much the better. If not, public discussion of Liberal Democrat ideas is always a good idea.

In part 1, I’ve already made suggestions on the economy, the deficit, and on local government finance. Part 2 covers other policy areas.

Reducing the poverty trap

Income tax is …

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    A consultation of the people was made in 2016. Who can swear that it is still valid in 2018?
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    @ Michael BG. Since you think Tim should have written a piece pointing out that our policies on jobs, welfare, wages, housing and generally reversing...