Benefits System Will Be Scrapped And Replaced By Universal Credit, Insists Ian Duncan Smith

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The work and pensions secretary is intent on seeing his welfare reforms through
The work and pensions secretary is intent on seeing his welfare reforms through

The government will press ahead with plans to scrap the current benefits system and replace it with a single, monthly payment, Iain Duncan Smith has said.

The work and pensions secretary said the Universal Credit would cost £2.5 billion and not £3.1 billion claimed at the weekend.

And he said some recipients would be paid fortnightly, not monthly as previously suggested.

Mr Duncan Smith is widely believed to have refused to become justice secretary during prime minister David Cameron's Cabinet reshuffle last week, after reports the Treasury wanted to axe the flagship welfare scheme amid fears the cost will rise.

But Mr Duncan Smith said on Monday: "Universal Credit is on time, on budget and I particularly want to stay here to see that through."

Shadow work and pensions secretary Liam Byrne tackled the government over apparent differences in the cost of the credits, due to come into effect next year.

Speaking during Commons questions, he said: "You must accept that £600 million extra has a huge impact on whether people will be better off in work or on benefits.

"It's quite clear the Treasury thinks there's a state of chaos around Universal Credit, the Cabinet Office thinks there's chaos, Number 10 thinks there's chaos - surely it's time you told the House what is exactly going on and set before us the business case you're trying to keep secret."

But Mr Duncan Smith insisted the scheme was on track and ministers were "committed to the £2.5 (billion) all the way through".

He said there would be help for claimants who have not previously drawn-up household budgets, including allowing some to receive fortnightly rather than monthly payments.

He told MPs: "We hope most people will be able to manage their money successfully and we are working towards that.

"But we also recognise in the development of the Universal Credit that there will always be some people who need additional support and we are looking and trialling that and making arrangements for these people.

"There will be a range of budgetary support services available, both to help them prepare for Universal Credit and provide ongoing support."

The scheme will see help claimants receive payments similar to monthly pay cheques, readying them for work.

But he conceded: "What we are putting around this is a requirement so that people can, if necessary, receive their money - if they are unable to cope on that two-week basis."

Mr Byrne later wrote to the work and pensions secretary seeking more details on the apparent £600 million gap.

Labour will put the government under further pressure over the universal credit tomorrow when it leads a Commons debate on the benefits revamp.