Chloe Smith
MP for Norwich North

Universal Credit and the Budget

Author: Chloe Smith, Updated: 01 November 2018 13:37

I'm blogging about particular aspects of the Budget, which was presented to Parliament this week, so constituents are informed. This blog is about the benefit known as Universal Credit, which some constituents have recently got in touch with me about. I also wrote about it in October and you can see that post here.


The Government remains committed to ensuring that the welfare system is put on a sustainable footing and to the principle that work should always pay. In 2013 the Government introduced the benefits cap. This policy was introduced to ensure that nobody would receive more money in welfare than they would otherwise receive through employment. I support this and, other than some campaigners and members of the Labour Party, so do most people in our city.


Changes to the welfare system since 2010 have brought welfare spending back under control. The old welfare system was often confusing and, crucially, trapped people in a cycle of welfare dependency as work did not always pay more than you might be able to get in welfare.


As I said in my blog piece in October, the old welfare system is being replaced by Universal Credit, which is a simpler system in which it always pays to work and which is fairer for the taxpayer. Universal Credit is currently being rolled out here in Norwich and you can find full details about Universal Credit, including what the local Jobcentre manager says about how they’ll be helping local people with it, at the link I gave you above. 


The Government have been rolling out Universal Credit slowly and carefully, making adjustments and learning from the pilot rollout schemes. In the Budget the Chancellor announced further changes to ensure the system works for everyone.


The Chancellor announced that the amount that households with children, and people with disabilities, can earn before their Universal Credit awards begin to withdraw - the 'work allowance' - will be increased by £1,000 from April 2019. This means that 2.4 million households will keep an extra £630 of income each year. Let's remember, it is fair for the benefit then to begin to withdraw because the overall aim is that people should be able to support themselves and their families by earning rather than benefits.


Crucially, the Government has listened to what people are saying, including some constituents whose views I sent in as your MP, and the Budget announced an extensive package of more support for claimants as they make the transition to Universal Credit from old benefits. These measures will be of immediate help to those in Norwich who are transitioning onto Universal Credit and I welcome these changes. I reassure you that people transferring over won't be worse off.


I want to reassure you that the Government has already made a commitment that anyone who is moved to Universal Credit without a change of circumstance will not lose out in cash terms. Transitional protection will be provided to eligible claimants to safeguard their existing benefit entitlement until their circumstances change.


In order to support the transition for those individuals who live alone with substantial care needs and receive the Severe Disability Premium, the Government are changing the system so that these claimants will not be moved to Universal Credit until they qualify for transitional protection. More generally additional financial provision has been announced for the rollout of Universal Credit going forward.


Building on the 2017 Autumn Budget, where it was decided that Housing Benefit claimants will receive an additional payment providing a fortnight's worth of support during their transition to Universal Credit, the Government will now extend this policy to cover the income related elements of Jobseeker’s Allowance and Employment and Support Allowance and Income Support. This will be effective from July 2020, and will help over 1.1million claimants.


Further provision in this 2018 Budget is made for the rollout of Universal Credit in general.


The Chancellor said: “The switch to Universal Credit is a long overdue and necessary reform. This is not just a welfare measure, it is a major structural reform to our economy that will help to drive growth and employment in the years ahead…Universal Credit is here to stay, and we are putting in the funding it needs to make it a success."


As your constituency MP, I welcome the additional funding for Universal Credit announced in the Budget. I am pleased to see that unemployment is at record lows and that Norwich has a lower unemployment rate than the national average, because that means the jobs are out there and people in our city are able to take home a pay packet that supports themselves and their families. I will continue my work as your representative in Parliament, to campaign on the issues that matter, always looking for more good jobs and investment here in Norwich.