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Universal Credit Failing Millions says House of Lords Committee

31 July 2020

House of Lords Economic Affairs Committee says Universal Credit isn't working

The House of Lords Economic Affairs Committee has called for wide-ranging reforms of the Universal Credit system. This follows an inquiry where Disability Rights UK provided written evidence and testified before the committee.

Cuts to social security budgets over the last decade is causing widespread poverty and hardship. Universal Credit needs urgent investment just to catch up and provide claimants with adequate income. The temporary increase in the standard allowance in response to the Covid-19 pandemic shows that the previous level of awards was too low. The increase should be made permanent.

The Government is using Universal Credit to recover debt, mostly £6 billion of historic tax credit debt. Deductions of up to 30% of the standard allowance, and in some cases more, can be taken from claimants. This has left many households with less money than they are entitled, often at no fault of their own. Tax credit debt should be written off as it is unlikely to be repaid.

The five-week wait for the first Universal Credit payment is the main cause of insecurity. This wait entrenches debt, increases extreme poverty and harms vulnerable groups disproportionately. The Government should introduce a non-repayable two-week grant to all claimants. The report is also critical of the very punitive nature of the Universal Credit sanction regime, which does not help people into work but is the cause of significant financial insecurity and needless stress. 

The full report can be downloaded as a PDF, or read online here: https://publications.parliament.uk/pa/ld5801/ldselect/ldeconaf/105/10502.htm