Universal Credit, the new all purpose benefit which underlies Iain Duncan Smith’s welfare reforms, may already be falling apart says a story in the Mirror today.
According to DWP documents the national roll out has been pushed back to mid-2014, almost a year later than has been previously announced. Only a small pilot scheme will be introduced next year and the Mirror claims that even that may be in doubt.
The new benefit depends on the construction of a database of an unprecedented size and complexity. The benefit is set to be ‘digital by default’, meaning it will be almost inaccessible to anyone without a home computer and broadband connection. When Working Tax Credit, a far simpler benefit, was introduced it was initially intended to be claimed online. After hundreds of thousands of people rang helplines complaining the site didn’t work, claiming the benefit was quickly reverted to a paper only system.
This hasn’t stopped Iain Duncan Smith from ploughing ahead with the scheme, which could yet see the country plunged into financial chaos. The harmonising of the tax and benefits system means it will not just be benefit claimants who will find their details on the new database. George Osborne’s ludicrously complex child benefit changes will mean parents will also be added to the system, as may pensioners and other groups, if mean testing of Winter Fuel Payments and other benefits are introduced.
The vast database will be underpinned by the new regime for reporting income to the Tax Office, known as ‘real time reporting’. This will mean employers and self-employed people will be required to provide monthly (rather than annual) information about income to the HMRC. The new system, which is likely to prove hugely unpopular with employers and self-employed people alike, is currently undergoing small trials around the country . One major employer in Newcastle has claimed the changes are set to be ‘shambolic’ and warned it will create a “red-tape hell” for employers.
Until ‘real time reporting’ is working nationally then Universal Credit, which will add even further complexity to the system, will not be able to go ahead.
This is not the only pitfall awaiting the flagship scheme, which will see all benefits, including housing benefit, rolled into one payment. There has still been no information provided by the Government on how the system will handle rent differentials around the country, sickness or disability premiums, child care support payments and pass-ported benefits such as free school meals. Council Tax Benefit is to be handed over to Local Authorities with the total spend to be cut by 10%. This will leave Local Authorities facing a huge shortfall which they will be forced to recoup from low income households. The Institute for Fiscal Studies recently claimed in a report that the working poor will be hit hardest, with Local Authorities reduced to chasing the very poorest for small amounts of money, a situation comparable to the Poll Tax debacle.
Privacy is also likely to emerge as a concern as it becomes apparent that Universal Credit will require the Government to hold huge amounts of personal information. With voice biometrics having been suggested as one way the system could verify identity, it is possible (but not very likely) that even some Lib Dem MPs may raise concerns about the fact that a huge Government database - which dwarfs the last Government’s National Identity Register they were so opposed to - is quietly being constructed behind the scenes.
Even this is not the last of Universal Credit’s woes. Some employers have warned the scheme may be undermined by the lack of jobs available. Housing associations are concerned that all payments being made direct to tenants rather than landlords will mean vulnerable claimants may run up huge rent arrears. Bizarrely Lord Freud, one of the architects of the scheme claims this will make more tenants get jobs. They sound more desperate everyday.
Any failure of Universal Credit will be a career ending disaster for Iain Duncan Smith, which may explain why Cameron has yet to pull the plug. IDS is a party wrecker and one of the key people responsible for plunging the Tories into the electoral wilderness in the 90s. An old school patriarchal Tory with old testament Christian beliefs, he is a world away from the economically right wing, but socially liberal image that Cameron wishes to portray. This makes IDS awfully popular with the swivel eyed right of the Tory Party, who still make up much of the rank and file and are growing increasingly frustrated at the Government’s failure to abolish gays and ban the internet.
IDS is also vehemently anti-Europe and was one of the ‘bastards’ who helped bring down the Major Government after the party fractured in two over the issue. Whilst his leadership of the Tory Party was an unmitigated disaster, IDS is a useful idiot for any amongst the Tory right who may wish to make a move against Cameron. IDS is both ambitious and stupid, a dangerous combination for a man in such high office. Of most concern is that he doesn’t appear to realise his own stupidly and is an avid believer of his own bullshit. Whilst it’s obvious that Chris Grayling relishes lying through his teeth about welfare reform, Iain Duncan Smith appears to be entirely sincere in the bollocks he talks.
Iain Duncan Smith could tear the party apart without even realising what he’s doing and Cameron is well aware of this. Whilst the failure of Universal Credit could plunge millions into financial chaos, and possible homelessness, David Cameron may well think it worth it to rid the party of one of his most troublesome foes.