Iain Duncan Smith has been forced to backtrack on claims that no one will be worse off under Universal Credit, it has been reported today.
The Work and Pensions Secretary told the Andrew Marr show that “nobody loses a penny” under his flagship welfare reform.
Labour blasted the claims as “completely wrong”, adding that those currently claiming Universal Credit could lose up to £2,400 a year from next April if their circumstances change.
Research by the Institute for Fiscal Studies (IFS) recently revealed that 2.6million working families are set to lose £1,600 a year from the changes.
The average annual income of households claiming Universal Credit “will be cut just as much as was ever intended” by Tax Credit cuts, the IFS said.
George Osborne was forced to reverse proposed cuts to tax credits in the Autumn Spending Review, under intense pressure from political opponents and MPs from within his own party.
However, experts claim that the Chancellor has merely shifted the cuts from tax credits to Universal Credit.
“The policy change ensures that no family will take an immediate cash hit”, said Paul Johnson from the IFS.
“But the long term generosity of the welfare system will be cut just as much as was ever intended as new claimants will receive significantly lower benefits than they would have done before the July changes.
He added: “We estimate that in steady state UC will now involve 2.6 million working families being an average of £1,600 a year worse off than they would have been under the current system while 1.9 million will be £1,400 a year better off.
“UC was always designed to be less generous than the current system to non working families.
“We estimate that spending on 1.8 million non working families will be reduced by £2.2 billion relative to the current system.”
Iain Duncan Smith has now admitted that “there were always points under tax credits that were more generous than universal credit”, the Sunday Mirror reports.
Shadow Work and Pensions Secretary Owen Smith said: “Iain Duncan Smith is completely wrong to say nobody loses a penny from his cuts to in-work support.
“Cutting Universal Credit raises £100m for the government next year and that money has to come from somewhere.
“What the Tories aren’t telling us is that the £100m – and a further £9.5 billion over the next five years – comes from the pockets of low- and middle-income families.
“That means those currently on Universal Credit face losses of up to £2,400 come April.
“Just like tax credit cuts, working families will be worse off next year and just like those cuts, Labour will fight them at every turn.”