Labour plans to halt universal credit if elected in 2015

Labour will pause the universal credit system if it wins the general elections in 2015, shadow work and pensions secretary Rachel Reeves has announced today.

In an interview with BBC One’s Sunday Politics programme, Ms Reeves said: “The project is massively over budget and accuses the government of throwing good money after bad. Labour created a rescue committee in autumn last year and is planning to pause the universal credit system for three months and will call the National Audit Office to draft a report on it.”

The universal credit system sees one single payment for six benefits: income-based jobseeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit.

The main motive is to simplify the benefit system and ensure a welfare plan that would encourage people on low income to take up jobs for any period of time available. This aims to avoid the poverty trap, where there is a disincentive to work because of the fear to loose benefits.

The work and pension secretary Iain Duncan Smith announced on Friday: “The universal credit system will be expanded from ten job centres where it is currently operating to 90 job centres in north-west England and will further extend to couples and families.”

Labour claims the program costs the government £12.8bn to deliver, in a time when benefit spending are raising exponentially. The new IT system running parallel to the old has been developed by outside contractors at a cost of more than £300m.

Mr Duncan Smith rejected the claims that the universal system is a “debacle” and has led to the waste of £140m of taxpayer’s money to the government.

Federica Marsi