At the heart of Universal Credit is a belief that work should always pay, with benefit withdrawn gradually as claimants start work or increase their earnings together with the simplification of a convoluted and sometimes unwieldy benefits system. Universal Credit combines six major benefits into one simple payment, with entitlement withdrawn gradually as claimants earn more of their own money. That is a much better way of making sure money goes to those who need it most, and that people always have an incentive to work. Indeed this move has rightly been supported from across the political divide. Scrapping or pausing Universal Credit and returning to a costly legacy system would continue the confusion for claimants, trapping people out of work, and would be unaffordable for taxpayers.
The challenge, as ever, is to create a system able to cope with the scale of such a scheme and the Government will adapt and change way the roll-out works as it goes. Rightly the priority continues to be safe and secure delivery. The process of managed migration will be slow and measured, getting underway later in the year, with the full roll out ending in 2023.
As we saw at the Autumn Budget, the Chancellor has announced a £4.5 billion package for Universal Credit. 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 in addition to 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. This extra funding has been welcomed from across the political divide.
As Members of Parliament covering Westminster, Karen Buck MP and I have met regularly over the past 18 months or so with local advice agencies, housing providers, representatives of Westminster City Council and local officers from the Department for Work and Pensions to discuss the roll-out of Universal Credit locally and to ensure that any teething problems that are experienced locally are flagged and rectified at the earliest opportunity, as well as creating a forum where we can share our experiences. We have found this approach and the engagement with all the aforementioned parties very useful, offering us an invaluable direct line of communication to the Department for Work and Pensions and local JobCentres through which we were able to raise and mitigate local concerns before the roll out got underway last June. This is something we will be continuing to ensure that any issues affecting Westminster are rectified at the earliest opportunity.