Chancellor under pressure to increase funding for universal credit

Universal credit replaces a range of existing welfare payments, but has so far been applied only to around one million new claimants or those with changed circumstances.

The system combines six current benefits into one monthly payment.

Those benefits are working tax credit, income support, jobseeker’s allowance, housing benefit, child tax credit and income-related employment and support allowance.

The Work and Pensions Secretary Esther McVey confirmed that some people will receive less under universal credit, but has refused to comment on reports that it could be by as much as £1,800 a year.

Now the original architect of the scheme, Iain Duncan Smith, is among several MPs urging Philip Hammond to find extra funding in the budget later this month.

Mr Duncan Smith resigned as work and pensions secretary in 2016 because of cuts being made to welfare payments by the then chancellor George Osborne.

Mr Hammond, however, appears to have little room for manoeuvre, particularly following the Prime Minister’s Tory party conference announcement last week that the NHS is to get a £20bn “70th birthday present”.

One report suggests he will abandon planned income tax cuts in order to plough £2bn more into supporting universal credit.

Tory backbenchers are becoming increasingly nervous about the impact on constituents, with Johnny Mercer declaring it “politically undeliverable” in his Devon constituency.

Commons Work and Pensions Committee member Nigel Mills called for the roll-out of the scheme to be slowed down until it has shown itself capable of making payments accurately and on time to those already receiving it.

Extra funding might ease some concerns, but ministers have made it clear universal credit is here to stay.

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A government spokesman said: “Universal credit is based on the sound principles that work should always pay and those who need support receive it.

“We are listening to concerns about achieving these principles, improving the benefit, and targeting support to the most vulnerable, including for around one million disabled people who will receive a higher award under universal credit.

“This is a far cry from the confusing, unreliable legacy system that failed to pay claimants their full entitlements and consigned people to a lifetime on benefits.”

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