Iain Duncan Smith: ministers screwed up universal credit

When Sir Iain Duncan Smith designed universal credit — the basis of the modern benefits system — he had, by his own admission, no idea what was coming. His initial objective was to simplify the sprawling mass of benefits. On his first day as work and pensions secretary he invited all the top civil servants into his office and asked them how many benefits there were. Most commented 1 Scotland plane crash: boy, 16, and flight instructor, 80, killed Scotland 64 comments One said 30, another 50 and a third suggested that there were 60. “They were arguing in front of me about how many benefits. [It was a] very simple question I asked,” Duncan Smith recalls. “And I said: ‘we’ve got to stop that because if you can’t tell me how many benefits there are, then you’re opening the door to fraud.’” Keep working and see sickness benefit as a perk, taxi driver told The answer to that simple question, Duncan Smith decided, was the universal credit system. Announced in 2010 and rolled out in 2013, the system combined six types of benefits into one standard allowance, topped up by different “elements” based on need. Advertisement The payments were assessed on income and tapered off as the claimant earned, until eventually they lost the payments altogether. Compared with the tax credits and multitude of benefits which came before, it was designed to be simple. Top stories 1 US inflation hotter than expected as Iran war stokes fuel costs Economics Top stories 1 Why an all-inclusive cruise is the ultimate single-parent getaway Cruises 2 How Lisbon’s coolest neighbourhood is shaking off its staid past Lisbon 3 17 of the best hotels in the Bahamas Bahamas 4 Why we’re dressing like introverts, instead of screaming for attention LUXX What he did not anticipate, however, was the explosion in people claiming benefits for mental health-related claims. Politics newsletter Get our daily insider’s guide to Westminster, plus a rundown of PMQs every Wednesday. Sign up with one click You’ve successfully signed up to the Politics newsletter Explore our newsletters An error occurred. Please use the link below. Politics newsletter Explore our newsletters “There were already pressures. The mental health side of things was building. But I would never have assumed that in this short space of time we would end up with the scale of mental health claims that we have now. Particularly for children,” he said. The main issue, he believes, was the way ministers gave out financial support during the pandemic. Some 91 per cent of claims since the end of lockdown measures in January 2022 were recorded as having “mental and behavioural disorders”, according to official figures released in March. Advertisement “If there’s any one regret I have at the end of the day is that we didn’t listen — or they didn’t listen — to some of the warning shots that were being fired at the beginning of Covid,” he said. “We just ended up coughing money out to people because we were worried that some won’t get it, so we coughed it out to everybody. That was a political decision. “And then after Covid, it was very difficult to claw a lot of this back because the number one rule of politics is once you give people money, it’s really difficult to get it back.” ‘Pip is killing people’: addicts spend benefits windfalls on drink and drugs This has resulted in the “medicalising everything about the ups and downs of life”, the “saddest part” of which is the children who the state is “too quick to park on significant sickness benefits”, according to Duncan Smith. One solution, he said, would be to stop the state “paying twice” for the same condition by allowing claimants to apply for universal credit sickness benefit and personal independence payment (Pip). Advertisement Research by the Centre for Social Justice, a think tank led by Duncan Smith, found almost two-thirds of universal credit health claimants are now also on Pip, claiming twice for the same conditions. Fewer than one in six on Pip work. Their latest report, the State of Dependency, describes the system as “dysfunctional” and argues that while the benefits serve theoretically different purposes, both are failing in their own right to achieve their objectives. The figures agree. A record 6.7 million people are on out-of-work benefits and seven in ten young people who claim sickness and disability payments are still claiming a decade later. A million young people are not in employment, education or training and more than half of them are on benefits. Young people on benefits now less likely to get jobs than over-55s The Times Welfare Inquiry revealed earlier this week that ministers are paying out universal credit sickness benefits to almost two million people, without knowing whether they still qualify . A series of traps and cliff edges in the system, also revealed by the inquiry this week, show how extra costs, other benefits and tapers interact to keep claimants stuck on welfare. Advertisement The price tag is only growing, and the bill for universal credit alone is set to reach £103 billion by the end of the decade, according to the Office for Budget Responsibility. For Duncan Smith, the problems in the headlines are not the fault of his system but the ministers who have run it. “The system is what we design. The policy is how we screw it up,” he said. “Policy is what do you want to do? How much money do you want to spend? What variations do you want to make on the existing policy that may make it easier or more difficult? These all are policy decisions. The structure of universal credit still works.” Duncan Smith believes there is one key thing that needs to change to get the system he built back on the right course. Ministers need to return to the “moral purpose” of work to encourage claimants off benefits and into jobs. He recalls one email he received while work and pensions secretary, from a constituent who always bought flowers for his mother on a Wednesday. For the first Wednesday in years, after a long period out of work and on benefits, he had gotten a job — and bought the flowers with his own money. “That short little email to me encapsulated what I believe we have to return to,” he said. “This is more than money. This is about character. It’s about health. Work frees you from dependency and makes you stand tall and say, ‘well, I don’t need a check from the state, I’ve got this. This is my money. I work for it’. Advertisement “That’s the critical bit that must flow through all the changes that will have to take place to get this back under control. It’s to return to the very simple principle that work is a critical, critical component of how society goes around, and how we go as human beings.”