Universal Credit claimants could get extra emergency cash help in the Budget following warnings by senior Tories that the system could end up as Theresa May’s ‘poll tax’.
No.10 Downing Street stressed that the PM was “listening” to claims that millions of people could end up losing up to £2,400 a year once they take up the new benefit.
Asked directly by HuffPost UK if more money could be made available in this month’s Budget, the Prime Minister’s official spokesman said: “The PM was clear yesterday that we are listening to concerns.
“We are taking a ‘test and learn’ approach to Universal Credit, improving the system as we roll it out.”
Pressure on May intensified on Thursday when former Work and Pensions Secretary Iain Duncan Smith, the architect of the Universal Credit reform, added his voice to those demanding more Treasury cash to help cushion its impact.
And one Tory backbencher Nigel Mills called for the nationwide roll-out of the system, which combines six different benefits into one, to be paused.
Duncan Smith said that £2bn had been slashed from the system by the Treasury and it was time it was put “back”.
The former Cabinet minister, who is close to his successor Esther McVey, defended the system as a whole, saying it was “functioning very well” and “there are tens of thousands of people out there who find this a better benefit”.
But he pointed out that he had resigned in 2015 because of former Chancellor George Osborne’s decision to use the reforms as a way of saving billions of pounds.
“We should direct the money back into Universal Credit exactly as it was originally planned to be rolled out,” he said. Asked how much more needed to go into the system, he replied: “The reality is that £2bn that was taken out.”
The Government has come under intense pressure to act after it emerged last weekend that McVey had confided to Cabinet colleagues that half of lone parents and about two-thirds of working-age couples with children would lose the equivalent of £200 a month.
Duncan Smith’s remarks came as Sir John Major also warned that unless claimants were given better protection from cuts “you run into the sort of problems the Conservative Party ran into with the poll tax in the late 1980s”.
The PM’s spokesman insisted that £3bn in transitional protections were being put in place to protect those current claimants being transferred onto the new system, which combines housing benefit, income support and job-seekers’ allowance among other benefits.
Current claimants “won’t see any reduction in their benefits”, May said this week. But campaigners point out that new claimants will indeed be hit hard by weekly cuts in income, particularly single parents.
The spokesman said: “The former Secretary of State gave a very staunch defence of the principles behind Universal Credit. Those principles are that work should always pay and those who need support should receive it.”
When pressed further on whether the Budget would see new cash support, he added: “I can’t answer any way or another ahead of a fiscal event.”
New figures revealed by HuffPost UK show that as many as 580,000 people could lose out on benefits payments in the changeover.