Iain Duncan Smith is a former Secretary of State for Work and Pensions, founded the Centre for Social Justice, and is MP for Chingford and Woodford Green.
No welfare system in the world is designed to deal with this sort of global health emergency – but Universal Credit (UC) is standing up to the challenge and delivering against the odds.
More than 1.5 million new claims to UC have been processed since March 16.
This would be a remarkable achievement in a recession, such as in 2008, but then add to that a pandemic, a global shutdown and, perhaps most importantly, the requirement for social distancing – and the scale of this achievement grows.
On the old system these claimants would have to be processed physically and the queues and chaos at job centres would have dwarfed anything we have seen so far, as well as increasing infection rates.
While these are staggering numbers, each claim sadly represents real people being supported through some of the most difficult times in their lives.
Thanks to the staff at the Department for Work and Pensions, the Government can be certain that people are able to access the welfare safety net at their hour of need.
For those who may not have online access, dedicated phone lines are staffed around the clock. Offices were open right through Easter and 10,000 DWP staff have been redeployed to join the frontline.
Hardened critics seem somewhat subdued, but even now their criticisms are wrong about the capabilities of UC.
The last few weeks have proved, if that was really needed, that the move to UC was the right one.
While the welfare system in America buckled and broke under the strain and the online systems in states such as Florida crashed continuously UC has coped well.
Other systems around the world have also struggled, with many claimants in Italy still awaiting their first welfare payment, while in the UK over half a million advance payments have already landed in new claimants’ accounts.
Incredibly, the department, despite the pressures, is forecast to pay 93 per cent of the claims made in week one of lockdown on time.
The remaining seven per cent that are not fraudulent are being helped by Jobcentre staff to identify problems and complete their applications.
The average monthly pay-out is £720 while couples with dependent children can receive over £1000.
These payments are set to rise thanks to a boost to both the standard allowance and working tax credit. UC is the safety net many need in these troubling times and it is working.
The beating heart of UC is to support and incentivise work for those who are able. This is because time and time again we have shown that work is the best route out of poverty.
The Social Metrics Commission found the poverty rate for families with all adults in full-time work is just 10 per cent, compared to 70 per cent in workless families.
Poverty statistics continue to be skewed by the relative poverty measure, which is widely disregarded and unhelpful in measuring real poverty levels.
But in getting people into work, UC has been staggeringly successful. Nearly two-thirds of claimants experience work within six months of claiming. If we listen to those with lived experience of UC we learn that 81 per cent are very satisfied with the system.
When a gym accident put 36-year-old John Anderson from Hull out of work and into a wheelchair, he started claiming UC.
John praised the versatility of UC which allowed him to pick up temporary work without being penalised, a flexibility not offered by JSA. ‘You can’t beat it!’, said John of UC. Success stories like John’s are life changing particularly at this difficult time.
Despite examples such as these, some continue to mount attacks including a call to remove advances which at this time would be unhelpful, as it ensures money gets to the person making the claim in a timely manner.
Programme restructure that would divert DWP staff away from the work of processing new claims and getting the money paid on time would delay vital payments.
As it is, much is done to make it easier, with Jobcentre appointments temporality paused and applicants no longer required to call DWP to complete their claim. Now would be entirely the wrong time to change anything fundamental within a system.
Benefits systems are complex and often cumbersome. I am fully aware that such a system with its test-and-learn philosophy will learn lessons and adjust later with improvements.
Just last month, I called on the Government to lower the taper rate and cut down the waiting time. These modifications can and should be made swiftly. The design of UC allows for flex around these smaller alterations.
We should never forget the system that UC replaced. Previous ones – all paper based – would have spectacularly collapsed under the strain of COVID19.
UC has meant the system was already set up for online processing. It streamlined six working age benefits many of which required reclaiming the moment the claimant found work.
In some cases work was even a disincentive. Under legacy benefits, if a single parent increased their weekly working hours from 26 to 27 – they would actually see their income fall.
UC reduces marginal tax rates that were as high as 100 per cent to 63 per cent. We operate under the basic principle that if people work more, they should earn more.
Those who continuously run around writing to the papers proposing Universal Basic Income (UBI) – a government cheque written to every individual in the country, regardless of their financial situation – are wrong.
This is an example of a political theory that doesn’t work in practice. Finland, a liberal economy with a reputation for generosity, carried out a full pilot of UBI and have now dismissed it in favour, they said at the time, of a UC-style system.
There is very strong evidence to suggest that UBI reduces the employment rate, is expensive (for the UK, £276.5 billion annually by 2020, dwarfing the public sector budget), and is ironically, less generous to those who need it the most.
Continuing to advocate for this system is at best naïve and yet another case of an instantaneous and ill-thought through theoretical proposal that simply doesn’t work.
Interestingly, as recently as 2017,the DWP Select Committee, after a full enquiry which included Labour and the Scots Nat’s, (27 April 2017, HC793), trashed the idea of a UBI with no dissenting voices. How right they all were then.
While there are still policy discussions to have around UC, the structure of the system has come under immense pressure but is holding up well.
UC has earned its spurs in COVID19. It is delivering on the purpose for which it was designed – getting money into the hands of those who need it most.
UC is the system we need in normal times as well as times of crisis. Small wonder that the OECD said such a system would work better than the UBI attempted in Finland and that New Zealand, Spain, France and Canada have met with our Government to learn about what is fast becoming the next generation of the benefit system.
For some claimants not only has the versatility improved but also the generosity. Joseph Rowntree Foundation stated that 5.5 million working families will be better off under UC and that it would reduce child poverty by 200,000.
The IFS said that UC is a better system than the legacy systems it has replaced. And now, a single parent with one dependent on minimum wage can take home £1,533 under UC, £63 more than under the legacy system.
UC works despite the immense pressure from the COVID19 pandemic, it works in its aim to deliver to those who need it most.
It’s time those politically-motivated critics accepted this, although I am sure they’ll try their hardest not to.