Universal credit has to go, says John McDonnell

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The government’s flagship welfare policy faces being scrapped by Labour because it is “just not sustainable”, the shadow chancellor has said.

John McDonnell said universal credit, which merges six working-age benefits into one payment, “will have to go”.

Labour announced at its party conference last month that it would review the system, which is being rolled out across the UK.

The Tories said Labour had not offered a credible alternative.

• What is universal credit?

Universal credit is aimed at making the system simpler so people who are able to work are rewarded for doing so.

But it has been criticised for running over budget and causing delays to people’s payments.

Labour has previously pledged to pause the rollout of the scheme to fix what it says are flaws in the system.

At the Labour conference, Mr McDonnell told a fringe event that the “message we’re getting back” from the consultation was that it should be scrapped.

Safety net

He went further on Sky News’ Sophy Ridge on Sunday programme, saying he had been listening to people’s views and the government’s arguments, but “the reforms haven’t worked”.

“I think we’re at that stage now that it’s not sustainable any more. It’s not a system that can work.

“It’s not a system that’s providing the safety net that people expect when they need support.

“I think we are moving to a position now where it is just not sustainable.

“It will have to go.

“I think we are moving towards a conclusion now that you can’t save the thing, it’s got to go.”

Speaking on the BBC’s Andrew Marr Show, Conservative Party chairman Brandon Lewis defended the scheme, describing it as “the right way to go”.

He did not deny a report in the Times that Work and Pensions Secretary Esther McVey privately warned cabinet colleagues that half of lone parents and about two-thirds of working-age couples with children would lose the equivalent of £2,400 a year under the new benefit.

Responding to Mr McDonnell’s comments, a Conservative spokesman said it was an unfunded spending pledge to scrap the payment, adding: “By scrapping universal credit, a programme which has helped deliver record employment, Labour would return to the record of previous Labour governments, every one of which left more people out of work.

“Conservatives on the other hand believe in social mobility and supporting aspiration and people into employment.”

Four-day week?

In a separate interview with the BBC’s Sunday Politics London, Mr McDonnell said Labour would consider reducing the working week to four days.

Asked whether Labour agreed with union leaders’ proposals for a four-day week, Mr McDonnell said the party would be exploring “a whole range of issues about automation”, and as part of that “we’ll look at the working week because I think people are working too long”.

The shadow chancellor said the TUC report stressed the need for workers to benefit from automation in the future and “that might be reducing hours of work – we are a long-hour economy.”

Asked if it would be in a future Labour manifesto, he replied: “We’ll see how it goes.”