Former Work and Pensions Secretary and architect of Universal Credit, Ian Duncan Smith MP, has admitted that keeping Universal Credit advance payments as loans instead of grants is a political decision.
Speaking in today’s Work and Pensions Committee session, the Tory MP said replacing advance payment loans – which are pushing people into debt – with non-repayable grants “is a policy decision, not a structural issue, so whatever the Government decides to do it is wholly feasible to do it.”
The UK government has said it fears that introducing advance payment grants for Universal Credit could see an increase in fraudulent claims but the SNP has proposed a solution to this, whereby advance payments become non-repayable grants once the claimant has been deemed eligible for Universal Credit.
The proposal has overwhelming support and would take away the need to reverse the five-week wait, which the DWP has said would be “operationally challenging.”
Commenting, SNP MP and Work and Pensions Committee member, Chris Stephens, said: “It is now clear that the Tory government’s decision to keep advance payments as loans – which are pushing people into, or further into, debt – instead of making them non-repayable grants is a political decision, and nothing to do with operational challenges.
“We know these advance loans are causing untold damage to hundreds of thousands of people across the UK, so why are the Tories sitting on their hands when they can quite easily change it? Their lack of empathy is simply astonishing.
“There is overwhelming support for the UK government to implement our proposal. It is time Boris Johnson listened to us and made advance payments non-repayable grants without delay to prevent thousands more being plunged into, or further into, debt – particularly during the current crisis.”
It comes as Boris Johnson dismissed mounting pressure to boost legacy benefits by £20 a week to mirror recent rises to Universal Credit and Tax Credit.
Poverty campaigners have warned that households who are still in receipt of legacy benefits like Employment and Support Allowance and Jobseeker’s Allowance are facing poverty and hardship in the wake of the Coronavirus pandemic.
Speaking at PMQ’s on Wednesday the PM told Work and Pensions Committee chairmain Stephen Timms, who has also called for legacy benefits to be increased, that the government has already “done a huge amount to increase support for people on benefits”.
“And I remind him that the increase in Universal Credit and Working Tax Credit is up to £1,040 a year, benefiting 4million families across this country.”
Stephen Timms (Labour) responded: “The government was right to raise Universal Credit by £20 a week at the start of the crisis.
“But other benefits like Employment and Support Allowance, claimed by other people in identical circumstances, was not raised.
“The all-party Work and Pensions agreed unanimously last week that those legacy benefits should be brought back into line with universal credit and raised.
“That’s since been endorsed by the former Secretary of State, Stephen Crabb. Will the Prime Minister endorse it as well?”
Liz Sayce, interim chair of the Social Security Advisory Committee, who advise the government on welfare issues said the Committee “are of the strong view that it is increasingly untenable for this group of claimants to be excluded.”
She added: “We recommend that the Government finds a way to ensure that this group of claimants, that includes some of the least well-off, are brought up to the same level as those in receipt of Universal Credit as soon as it is possible to do so.”