Universal Credit Payments Should Be Flexible Say Labour In Near Defeat For Government In Lords
Labour has called on the Government to give people more flexibility over how often they receive the universal credit, which is set to replace a complex range of benefits.
Ministers want the new payment, which is the centrepiece of the Government's Welfare Reform Bill, to be made monthly, but Labour shadow work and pensions minister Lord McKenzie of Luton called for people to have the option of receiving it more frequently.
However, an Opposition-backed amendment in the House of Lords adding extra flexibility was defeated by 227 votes to 224, a Government majority of three.
Welfare reform minister Lord Freud had urged peers during the first report stage debate on the Bill not to tie his hands and added: "Where people can't handle monthly budgeting we will have arrangements to help them."
He argued new types of bank accounts would allow people to manage their money better and said it was "essential" to "develop 21st century solutions" rather than harking back to previous decades.
But Lord McKenzie told peers: "We do not know today that these banking products can be developed in time for the introduction of universal credit, that they can be comprehensively available and without high cost."
He said most benefits were currently paid fortnightly and monthly payment of the universal credit - which would cover existing means-tested benefits and tax credits for people of working age - "would create particular difficulties for some families".
He said that recent surveys showed that nearly half of the population failed to make earnings stretch until pay day and warned of the "exploitation" of people by high interest short-term loans.
But Lord Freud said that poor people were currently penalised by not being able to pay for things on a monthly basis and had to manage on "small gobbets of income weekly" leading to a "poverty premium".
"We want universal credit to prepare people for work and encourage them to move away from costly weekly and fortnightly budgeting," he said.