Universal Credit: the new Poll Tax?

Policy Director Marc Francis reflects on the latest warning from former PM John Major that Universal Credit is becoming the new Poll Tax

Marc Francis, Policy Director

John Major’s statement yesterday that Universal Credit is becoming this Government’s Poll Tax is the most dramatic political intervention yet in the debate on its flagship social policy.  His warning, that while the theory is “impeccable”, UC is being rolled-out “too soon and in the wrong circumstances” and that the majority of the British people would not think it is fair for low-income families to lose £2,400 a year, is one that strikes a chord with Zacchaeus 2000.  For an organisation that was founded by a group of friends opposed to Poll Tax, it also brings back a few memories.

Full service roll-out of UC only came to Westminster, where a majority of our clients come from, in June and so, until very recently, we had only seen a small number of single people on it.  However, a rapidly growing number of those clients attending our outreach sessions are now seeking advice on UC-related issues.  And this is before the “managed migration” from legacy benefits even begins.

Zacchaeus 2000 doesn’t doubt that there are winners from UC.  Our concern is that, as things stand, there are far too many losers to justify it.  The problems with monthly-payments, long delays have been relentlessly-documented, but there are also unfairness’ “baked in” to UC, like the removal of severe and enhanced disability premiums.  And worse still, DWP’s insistence on an IT-based claims approach demands a level of computer literacy many of our clients simply don’t have.

There is simply no way advice services that aren’t keeping up with demand under UC at the moment can possibly help those who will need help under managed migration as well.  The £39 million Universal Support funding for Citizens Advice that Work & Pensions Secretary, Esther McVey MP, announced last week doesn’t go anywhere near far enough to scale-up its own operations to the level required.  And let’s not forget that isn’t new money – just a draw-down from the £200 million pot announced back in 2015.

Ms McVey’s solution – that UC claimants losing money can just take on more work to make up the shortfall – beggars belief.  But then again, I’m really not sure the alternative solution she and Chancellor, Philip Hammond MP, are being encouraged to implement – increasing the work allowances back to the level UC’s architects originally proposed – will crack the problem either.  The only way to ensure there are significantly more winners than losers, and that those losers don’t lose so much is to dramatically increase the amount of money spent on Social Security for working-age people – something the Government is expressly determined not to do.  And they seem equally determined to stick with monthly payments and online claims as well.

Zacchaeus 2000 has long argued that UC shouldn’t be rolled-out until the underlying problems with it are resolved, and so we support the campaign that it should be paused and fixed before managed migration.  But that has to be a fix to its fundamentals, and not just a bit of fiddling around the edges.  That’s exactly what John Major himself did with the Poll Tax when he became PM.  With Michael Heseltine’s help, the Community Charge was dismantled and replaced with Council Tax.  To the credit of both, low-income households were exempted from it through Council Tax Benefit.

They say history repeats itself.  And for someone who came of age in the late 1980s, there are increasing political parallels between then and now.  A Government wracked by division over Europe, also recklessly pursuing a social policy that would result in many of its own supporters being left out of pocket.  All the while the PM being relentlessly stalked by a charismatic former minister with an untamed hairdo.  Of course, we all know now how that story ended.  A female Prime Minister brought down by her own MPs, and a somewhat grey and relatively unknown Chancellor unexpectedly winning the subsequent leadership contest and inheriting the keys to Number Ten.

Interestingly, as PM himself, John Major quickly found the money needed to dramatically cut Poll Tax bills that he hadn’t managed to come up with as Margaret Thatcher’s Chancellor.  Amidst the mounting clamour over UC, Phillip Hammond delivers his budget in a fortnight’s time.