This has been an unusually positive couple of weeks for universal credit. Despite a tsunami of new claims – 1.4m and counting – and the loss of a fifth of staff due to self-isolation, the much-maligned benefit has held up under the challenge of coronavirus. The system hasn’t crashed, and, thanks to the rapid redeployment of tens of thousands of officials from their usual roles to full-time claims processing, the “pandemic” cohort of new claimants is expected to receive their first benefit payments, on time, this week.
The director general of universal credit, Neil Couling, has been in confident mood, going as far as to call a Zoom-enabled press briefing last week to praise his hardworking staff and lay bets that, despite the unprecedented economic chaos of the past few weeks, universal credit would be more timely and efficient than ever. “The system has run beautifully throughout the crisis,” he claimed, not a phrase too often associated with the often hapless benefit.
Part of the reason the UK’s social security system has managed to deliver its immediate overriding priority – to get emergency cash as swiftly as it can to millions left jobless overnight – is because, by and large, it has stopped doing almost everything else. The vast architecture of conditionality, from job search interviews to sanctions to fit-for-work tests has been put aside for at least three months, making the system unexpectedly lean. It will be interesting to see what the new claimant cohort makes of it (the work and pensions select committee is conducting an inquiry): in some ways forcibly changed by Covid-19, it is on the face of it, both more generous (by £20 a week) and less punitive than it was even a month ago.
In important respects, however, universal credit and the wider benefit system remain frustratingly unreformed. The UK is moving into what looks like a lengthy economic downturn, and already there are signs that low-income families are struggling. The Food Foundation thinktank estimates that levels of food insecurity have quadrupled under lockdown, with disabled people and families with children likely to be disproportionately affected. Food banks have reported huge increases in demand.
There are reports of energy poverty, of families making “heat or eat” choices. If the Office for Budget Responsibility’s predicted recession comes to pass the Department for Work and Pensions (DWP) will need to be bigger (after 40% staff cuts since 2010, it has already announced plans to hire 5,000 new staff). But, more importantly, it must recognise that a welfare system still largely fighting the ideological battles of five years ago is no longer fit for purpose. The tabloid-Westminster world of job-shy shirkers and their equally mythical counterpoint, those “hardworking families” who would never need to rely on benefits, seems a long way off. And yet the social safety net feels more stuck, complacent and unresponsive than ever.
That new universal credit claimants must wait a minimum five weeks for a first benefit payment, and were forced into debt to tide them over that stressful period always felt like an aggressively ideological policy: in the new era it feels positively perverse. The Labour party has called for such advance loans made over the past month (more than 500,000 of them) to be written off. At the very least, there is a strong case for suspending the monthly deductions for those loans for a few months. As food banks know well, advance loan repayments make it much harder for households to recover from the financial shock of job loss. It is inequitable, too, that people claiming employment and support allowance or jobseeker’s allowance have not received the £20-a-week benefits uprating enjoyed by those on universal credit. That anomaly should be rectified. Uprating child benefit by £10 per child per week, would, says the Child Poverty Action Group, cut poverty by 5%.
Mitigating poverty, Labour says, must be a major part of the post-Covid welfare policy response. There are plenty of things the government could do to ease the impact on the poorest people, not least by overhauling a welfare system scarred by always nasty and now painfully outdated policies. So scrap the two-child benefit limit, with its poverty-fuelling detachment of benefit levels from family need; do away with the benefit cap, which punishes claimants for not getting a job, even where they are not expected to work. It also should review the rollout of the next phase of universal credit to existing claimants from December, a process so fraught that the Salvation Army warned just two months ago that, unreformed, it would “steamroll vulnerable people into poverty”.
Universal credit appears to have survived the initial crisis of lockdown intact because the DWP realised quickly enough that business as usual would not have worked in a crisis of this magnitude. Times have changed. Old habits die hard. But there is no going back to the old ways. Generosity, fairness and ease of access must be the new watchwords.
• Patrick Butler is the Guardian’s social policy editor