I backed him on Brexit but Iain Duncan Smith's Universal Credit is as disastrous as the poll tax

Mail On Sunday - 23 Oct 2017

With Brexit negotiations in Brussels reaching a crunch point in the next few weeks, the last thing Theresa May needs is a political crisis on the home front.

But that is exactly what confronts her in the shape of Universal Credit welfare reform.

Put on public display for the first time seven years ago by its architect Iain Duncan Smith, Universal Credit was hailed by supporters as the magic solution to welfare dependency.

Both Mr Duncan Smith and I campaigned for Brexit. Like me, he fought his party establishment which believed leaving the EU was unthinkable. Like me, he was delighted when the country voted to withdraw in the referendum.

I could not disagree more with him, though, over Universal Credit – his flagship policy as Work and Pensions Secretary. With the system being ramped-up to full speed over the next few months, Mrs May must now face the consequences of the horror it is about to inflict on millions of families.

Food banks in my constituency of Birkenhead alone will require an extra 15 tons of supplies just to cope with the increase in need resulting from people being left penniless by delays caused by the switch to Universal Credit. 

We’re not just talking about the poor here. Many working-class families who voted Conservative are about to be walloped by the Universal Credit wrecking ball.

The idea behind it was to simplify the welfare system, but this is a mere illusion. Cramming six different benefits into one was always going to be an uphill task. Yet it has been handled so badly that, in many cases, recipients will be left with no benefits at all for at least six weeks. It’s not unusual for people to be left penniless for more than two months. It doesn’t take a genius to work out the political implications of that for a Conservative Party and Prime Minister struggling to retain support and credibility on so many issues.

Nor is it surprising that some are comparing Mrs May and Universal Credit with Margaret Thatcher and the Poll Tax. Tory advocates of the Poll Tax argued that it was simpler, fairer and cheaper to administer than the old-fashioned Town Hall rates that went before.

They say just the same about Universal Credit, and are just as wrong. No welfare system is worth the paper it is written on if it runs the risk of people being left unable to feed themselves. A single benefit sounds great in principle, until you consider some simple practicalities that few MPs are likely to have experienced.

If you are a single mother and receive several benefits, including housing benefit and Jobseeker’s Allowance, and one fails to be paid for whatever reason, it is difficult. But it is not the end of the world. You probably still have enough money for food. If you only have one benefit, Universal Credit, and that is not paid because of a mix-up or mistake, you have nothing. The welfare state was designed to be a safety net. If your Universal Credit is not paid, the safety net is pulled from beneath you.

As someone who was asked by Tony Blair to ‘think the unthinkable’ when he appointed me Welfare Minister in 1997, I have never been one to shy away from tough choices.

In the event, my attempts to reform welfare were thwarted. The biggest obstacle I faced was Gordon Brown, who as Chancellor was set on a means-tested tax credit reform as opposed to a ‘pay first, benefit later’ national insurance scheme which I advocated.

My experience has taught me that means tests make life hell for staff trying to process benefits quickly, as well as the families living hand-to-mouth who desperately need help. Mr Brown would have none of it, though. His tin ear led to the ill-fated decision to go full steam ahead with the roll-out of means-tested tax credits.

Millions of poor and working-class families had their budgets thrown into chaos by this new system which, like Universal Credit, was rammed down their throats as something that was meant to improve lives. In the end, it took years to clean up the damage.

But now Mrs May is in danger of making an even bigger mistake which could wreck her efforts to rebrand the Tories. Since she famously labelled them the ‘nasty party’ in a conference speech in 2002, she has tried to rid them of their uncaring image. She has taken huge strides towards this by taking a more progressive stance on issues like modern slavery, the National Living Wage and gay rights. She also expressed her desire to help the least fortunate when she stood on the steps of Downing Street for the first time as Prime Minister.

I should add that I speak as one who strongly supports her efforts to strike a good Brexit deal with the EU. But unless she acts fast to defuse the political timebomb that is Universal Credit, she risks undoing many of the good things she has done. The Conservative Party will be seen as the Nasty Party once again.

Writing in this newspaper two weeks ago, former Conservative Premier Sir John Major called on Mrs May to rethink Universal Credit. He described it as ‘socially unfair and unforgiving’. It may be ‘theoretically impeccable’, he observed sarcastically, but it just didn’t work. It was time for the Tory Party to ‘show its heart’ and amend Universal Credit.

Sir John speaks from experience. When he succeeded Mrs Thatcher in 1990, the first thing he did was scrap the ill-conceived Poll Tax that had played a major part in her downfall.

It was David Cameron who, against his better judgment, was persuaded by Mr Duncan Smith to approve Universal Credit. I doubt Mrs May would have approved it in its current form had she been in No 10 at the time. She will have seen by now that the six-week period of limbo under Universal Credit is pushing families to the brink of destitution. To avoid any more political carnage on the home front, she needs to put it right. Fast.