Birkenhead MP says new benefit system is 'heading for disaster' (From Wirral Globe)

Birkenhead MP says new benefit system is 'heading for disaster'

1:19pm Tuesday 18th September 2012 in News By Leigh Marles

Birkenhead MP says new benefit system is 'heading for disaster'

Frank Field has raised the alarm over the looming introduction of universal credit.

Writing on his blog, the Birkenhead MP said the programme is “heading for disaster.”

Ministers have insisted the shake-up will abolish poverty traps in which some benefit claimants lose up to 90p for every £1 they gain from taking a job.

Universal credit will replace six existing benefits, including Jobseeker's allowance and housing benefit, with one streamlined payment.

It will be piloted from next April, and is scheduled to start being “rolled out” in October of 2013.

Frank Field said the system will lead to people becoming more dependent on the State and aspects of it will "rot the soul" of claimants.

The former poverty adviser to Prime Minister David Cameron said that at the weekend, 70 organisations raised concerns about the introduction of universal credit, Iain Duncan Smith’s flagship welfare reform project.

“It is not so much whether millions of claimants will be unable to fill out a universal credit claim online which has so far occupied the anti-poverty lobby’s minds,”he writes.

“It is, rather, whether those applying for help will have an income they can sustainably use, as the credit will pay benefits at monthly intervals, rather than fortnightly as at present.

“It is clear that there are fundamental problems with universal credit.”

He continued that the new credit, due to be fully delivered by 2017, and initially set to have an additional £2 billion annual cost in benefits, aims to sweep together the main means-tested benefits and tax credits into one ‘universal’ benefit.

“Means-testing only encourages dependency, and the universal credit is in one sense, the ultimate form of means-testing. It obviously gets extra money to hard working families who earn low wages.

“But in doing so it rots the soul. “ Claimants can currently lose more than 90 pence for every extra pound in earnings. Under universal credit people can still lose about 65 pence of every extra pound – 20 pence more than the highest rate of tax.

Mr Field concluded: “I am therefore against the universal credit in principle, but I also fear that the programme is practically unachievable.

“Rumour has it so does the Prime Minister, hence the attempt to move IDS to Justice during last week’s reshuffle, so that the plans could be shelved."

Mr Duncan Smith faced critical questioning during a House of Commons select committee hearing yesterday about potential problems in the development of universal credit.

During a two-and-a-half-hour session, MPs on the influential work and pensions select committee highlighted the long and growing list of concerns about the new system.

Ministers insisted the scheme, and the computer programmes needed to manage it, would be ready on time.