Iain Duncan Smith to urge PM to scrap £3.4bn Universal Credit cuts

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Theresa May will be challenged to scrap £3.4 billion in cuts to Universal Credit by former work and pensions secretary Iain Duncan Smith.

The Tory backbencher will seize on a promise made by the Prime Minister on the steps of No 10 to help people who are "just about managing" and call on the Government to channel investment into the in-work benefit.

The Centre for Social Justice (CSJ), a think tank chaired by the former minister, has released a report in which it says three million claimants of Universal Credit will be £1,000 a year poorer by the time the scheme has fully replaced working tax credit in 2022.

Meanwhile just 25% of spending to increase the income personal tax allowance reaches those needing it most, Mr Duncan Smith will say on Friday.

He is one of the main architects of Universal Credit, and will say that restoring its original work allowances in the Autumn Statement on November 23 would "help those who are just about managing to properly provide for themselves and their families".

"Most people on benefits want to work. They want a regular routine, an interaction with a community outside the home, a stake in society and a sense of purpose," he will say.

"Work gives this to them - and it is crucial that we make sure people are always better off because they are in work.

"Every penny invested in Universal Credit will go to low-paid workers, yet this is true of just 25 pence of every £1 invested in the income tax personal allowance. Investing in Universal Credit is a far better way of supporting those who need it most."

The CSJ argues that strengthening the work allowance will help people find work and those in relatively low-paid work will be better supported.

Mr Duncan Smith introduced Universal Credit as part of reforms to combine the income-based employment support allowance, income support, child tax credit, working tax credits and housing benefit.

George Osborne announced a reduction to the Universal Credit "work allowance" in the 2015 Budget and revealed further cuts to welfare spending in the 2016 Budget.

When he dramatically resigned his post days later, Mr Duncan Smith accused the now ex-chancellor and former prime minster David Cameron of chasing an "arbitrary" spending cap by focussing cuts on those who "can less afford to have that fall on them".

During his tenure the Department for Work and Pensions said an expected 300,000 more people would find work under the scheme prior to it being cut.

When Mrs May took office in July she pledged: "If you are one of those families, if you're just managing, I want to address you directly. I know you are working around the clock, I know you're doing your best and I know that sometimes life can be a struggle.

"The Government I lead will be driven, not by the interests of the privileged few but by yours. We will do everything we can to give you more control over your lives."