A speech by Lord Freud, Minister for Welfare Reform.
Thanks for inviting me to take part in today’s debate
I want to talk about Universal Credit - the new single benefit for people on low income, whether they are in or out of work. It replaces Jobseeker’s Allowance, Tax Credits, Income Support, Employment and Support Allowance and Housing Benefits.
Cornerstone of Universal Credit is that work should always pay. Benefit will be withdrawn gradually as claimants start work or increase their earnings, meaning their total income goes up.
And because Universal Credit is not restricted to people out of work, it is safe for claimants to try a job or to increase their earnings without the fear of losing their benefit.
This is not just another benefit reform. It’s a transformation of the welfare state designed to change attitudes and behaviours.
To help claimants and their families manage their benefits and wages independently, and where possible to become independent of state support.
Universal Credit will be paid monthly, like a salary, to mirror the experience of work. 70% of people are paid monthly.
A single monthly payment to the household. 12 million benefit and tax credit claims will become 8 million Universal Credit household claims.
It will be digital by default.
From the outset we have designed Universal Credit as an online service.
We expect people to claim Universal Credit online and then to track their claim and report changes just as they do with online banking.
For many people this will more convenient. They will be able to manage their claim 24/7 from home.
However, we do recognise that not everyone is ready and able to shop, bank or use services online.
When Universal Credit goes live in October next year, there will still be face to face and telephone support in place.
The important difference is that this support will be geared towards helping people to use the online channel.
I am determined to make the most of the opportunity - and the financial incentive - presented by Universal Credit to identify claimants who lack computer skills and to help them to become “digitally independent”.
This is about work as much as it’s about welfare. As you know, employers expect digital skills for almost all jobs.
It also opens up opportunities for managing money better via online banking or budgeting support. Or accessing money saving services like internet-rates and paper-less billing.
DWP cannot do this alone. We’re still looking at options - but there are a number of external organisations that are well placed to help people to make a Universal Credit claim online and to stay online.
The more I think about it the more I realise that digital and financial inclusion go hand in hand. Both are at the heart of Universal Credit.