Almost two in five Universal Credit claimants will lose £52 a week a new report has found, adding to growing calls for a rethink of the Government’s flagship welfare programme.
An analysis by the Policy in Practice consultancy seen by the Observer, found struggling homeowners, working single parents and the disabled will be the hardest hit unless urgent action is taken in the next budget.
Universal Credit has been rolled out in a few areas but full implementation is due next year.
Chancellor Philip Hammond has already been warned that the Government faces a “significant” revolt by Tory MPs if he can’t find extra money for the new benefits system.
Tory MP Heidi Allen said “significant numbers of colleagues on my side of the House are saying this isn’t right and are coming together to say the Chancellor needs to look at this again”.
The MP, a member of the Commons Work and Pensions Committee, said the number of fellow Tories with concerns was “approaching 30 now”.
On Sunday, Tory Party Vice Chairman, James Cleverly, told Sky News’ Ridge on Sunday: “Any benefits system is going to be complicated, it’s going to be expensive and it’s going to be something that needs to be delicately handled. That is a universal truth about all benefits situations.
“The benefits regime that we had before Universal Credit was cumbersome, it was complicated, it was Byzantine, it encouraged almost errors… disincentivising work, it was not a good system.
“Universal Credit is an infinitely better system but, and the point that Iain [Duncan Smith] made, it needs to be well-resourced.”
The architect of the new system, former work and pensions secretary Iain Duncan Smith, said an additional £2 billion must be pumped into UC to make it operate as planned.
“To fix both of those would cost around £2 billion. I would argue that one of the ways of funding that – we have managed migration planned for next year, when we move all claimants across from the old benefits system, and the Government has put about £3 billion aside to protect those that would lose as a consequence of that.
“So if we boost the system before we get there, we can essentially save some of that £3 billion later down the line.”
On Thursday, McVey declined to confirm or deny reports she had told Cabinet colleagues that some claimants would lose out to the tune of £200 a month.
But challenged over a think-tank estimate that three million people will be about £1,800 a year worse-off due to the move to UC, McVey told the BBC: “I have said we made tough decisions and some people will be worse off.”