There's lots wrong. Let's start with the project of introducing UC:
- It's way over budget. The DWP says it will cost £12.8 billion over 11 years. The original estimate was £2.2 billion.
- It's late. The plan was to have one million people on UC by April 2014. In fact hardly anyone was.
- It will do less than originally planned. For instance, it won't replace Council Tax benefit.
Now some consequences:
- In many families it will replace payments to women with payments to men. In most cases this won't matter but in dysfunctional families the men are more likely than women to waste the money.
- It will make life more difficult for the poorly-paid self-employed (a rapidly growing group under this government!). They will have to submit three different sets of accounts - for VAT, Income Tax and UC.
But it gets worse. Because some benefits that aren't included have their own claw-back rates the net claw back rate will sometime be more than 100%. This is surely indefensible.
One final thing. There's an interaction between UC and increases in the tax-free threshold. (That's the LibDems signature policy which "takes lots of poor people out of the tax system".) Any increase in this threshold provides the poor with extra income but because UC is based on net income most of the gain (65% or73%) is clawed back by the state. That's a NEW anomaly since the benefits that UC will replace did not claw-back such gains.
A dreadful policy badly implemented.The Green Party would replace the whole thing with Basic Income - but that needs a separate post.