Rudd floats benefit freeze end as she rows back from Universal Credit child cap

Amber Rudd has signalled that a benefit freeze introduced in 2016 will not be renewed when it comes to an end next year.

The Work and Pensions Secretary told Sky News that she did not expect the measure, introduced by the then chancellor George Osborne, to be renewed when they come to an end in 2020.

It came ahead of a major speech she is due to give on Friday in which she will announce that controversial plans to retrospectively extend a two-child benefit cap to new Universal Credit (UC) claimants are to be scrapped.

Ms Rudd defended the benefit freeze, saying it had been right to introduce it in an age of austerity.

She told Sky: “The whole point about the three-year benefit freeze was making sure that people on low incomes had the same rises as people on benefits.

“This was a time when inflation was very low and it was the right thing to do at the time, given that we also had the massive debts that the country had inherited from Labour.

“It was the right policy at the time, it’s got one more year to run, I look forward to it coming off.”

Pressed on when this might be, she added: “It has one more year to run… I do not expect that to be renewed at all.”

Brexit
Amber Rudd said the 2016 benefit freeze was the right policy at the time (John Stillwell/PA)

Ms Rudd will use her first major welfare speech on Friday to try to allay fears about the roll-out of UC.

The Work and Pensions Secretary will bow to pressure and drop the initiative to broaden the two-child cap to children born before the welfare cut was introduced in April 2017.

Ms Rudd will say: “As it stands, from February 2019 the two-child limit will be applied to families applying for Universal Credit who had their children before the cap was even announced. That is not right.

“These parents made decisions about the size of the family when the previous system was the only system in place.

“So, I can today announce that I am going to scrap the extension of the two-child limit on Universal Credit for children born before April 2017.

“All children born before that date will continue to be supported by Universal Credit. This will help approximately 15,000 families a year.”

The two-child cap limits support for families through tax credits, housing benefit and UC to the first two offspring.

Subsequent children, except in special cases, are not entitled to the “child element”, which is currently £2,780 a year.

Ms Rudd’s move comes as the Commons Work and Pensions Committee branded the plans to retrospectively extend the cap to children born before it was brought in as “cruel”.

The committee expressed fears about the impact of such a move on the levels of child poverty.

Ms Rudd will also announce a slowdown in the “managed migration” to UC of claimants whose circumstances have not changed.

The Cabinet minister will say: “I am going to change the current regulations, removing the powers Government previously planned to seek to migrate all legacy claimants on to the new system.

“Instead I am only going to seek powers for a pilot: the chance to support 10,000 people through the process, giving us the opportunity to learn how to provide the best support, before coming back to Parliament to seek permission for future migration.

“This will begin, as planned, from July 2019 and the next six months will be a period of careful preparation.

“The lessons from the pilot will inform our next steps, but there will be no overall delay.

“Universal Credit migration will be completed, as planned, by 2023.

“However, I will consider carefully the results of the pilot and its implications for scaling up migration.”

Shadow work and pensions secretary Margaret Greenwood said the move was a “partial U-turn” that did not go far enough.

She said: “Labour has long called for the Government to abandon the two-child limit in its entirety.

“Universal Credit simply is not working: it is pushing many families into poverty, rent arrears and towards foodbanks.

“The Government must stop the roll-out immediately before more people are pushed into financial hardship.”

But Gillian Guy, chief executive of Citizens Advice, said: “It’s encouraging to see the Secretary of State taking a fresh look at the welfare system.

“Universal Credit has to work in practice as well as in theory.

“We welcome any move to make it a more flexible system that can be adapted to suit the way people live their lives.

“But to really get to grips with the problems of Universal Credit, the Government will need to go further.

“This means investing more in the benefit so people have enough to live on and don’t have to wait five weeks for a first payment, while also making sure it is paid in a way that works for people’s individual circumstances.”