Page last updated at 18:28 GMT, Tuesday, 11 September 2012 19:28 UK

Universal credit welfare reforms 'sinking fast', says Labour

The government's policy on overhauling the benefits system is a "flagship that is sinking fast", shadow work and pensions secretary Liam Byrne has said.

It is an "open secret" in Whitehall that the plans, which aim to bring most benefits and tax credits under a single payment called the "universal credit", are in trouble, Mr Byrne claimed in the Commons.

Opening an opposition day debate on 11 September 2012, Mr Byrne said: "Universal credit is a massive project. It is too big to be allowed to fail. We need to make sure it is on track."

He called on ministers to publish more information about the plans.

But Work and Pensions Secretary Iain Duncan Smith insisted the reform was on time and on budget.

The IT systems would be phased in to ensure they worked properly, Mr Duncan Smith told MPs.

"At every stage we are able to make sure we get this absolutely right as we do it. We know there are important things to be considered to make sure people don't suffer as a result of any of this.

"We want to get this right and get it right even as we do it. That is the key point I am making."

The Welfare Reform Act became law in March 2012. The act introduced the universal credit and other measures which the government says will ensure that people are always better off in work.

The universal credit will be introduced from October 2013, with 8 million households to be transferred to the new benefit by 2017.

It aims to make the system simpler by replacing five work-based benefits. The existing benefits to be replaced are:

  • Jobseekers' allowance
  • Tax credits
  • Income support
  • Employment and support allowance
  • Housing benefits

The Welfare Reform Act also replaces Disability Living Allowance with the Personal Independence Payment and caps the total amount of benefits paid to families to about £26,000 per year.


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