Smith pledges to reverse Universal Credit cuts as he unveils “triple-lock” plan to boost living standards

Owen Smith has pledged to reverse cuts to universal credit as he promises radical changes to a Conservative economy that is “out of step with public demand.”

He said the new benefits scheme was part of the “Tory scandal of in-work poverty” – which would see two million low earners will be £2,000 worse off under the changes.

Referencing the Tory u-turn on plans to cut £4bn from disability benefits which happened while he was Shadow Work and Pensions Secretary, the leadership challenger said he would challenge the cuts by providing a fairer alternative rather than fighting with slogans.

The policy is one third of a “triple-lock” approach, which Smith outlined in the speech, which would benefit the incomes of the poorest by raising the minimum wage to the living wage, reversing cuts to in-work support through universal credit, and reforming pensions tax relief to boost the pensions of all basic rate taxpayers.

“Universal Credit is the new Tory vehicle for austerity,” the Pontypridd MP said. “Once it’s rolled out, millions of families will face the same prospect again – massive cuts to their in-work support.

“In total, two million low-paid workers will be more than £2,000 a year worse off unless the cuts are stopped.

“That means a family struggling with the household bills. For some, it means choosing between heating and eating. So the cuts must be defeated.

“I’ll defeat them by presenting a fairer alternative. By being open and transparent about how I’ll pay to defeat them. Not sloganising but beating Tory austerity with a credible plan.

“Just as I did at the last Tory Budget, where my campaign to defeat cruel cuts to disability benefits led to the resignation of Iain Duncan Smith.”

Universal Credit was developed by the Conservatives to replace tax credits as a form of in-work benefits. However the scheme has suffered from long delays to its roll-out. It was originally announced in 2011 and was expected to be functional by 2017. It is now unlikely to be functional before 2022.

The project has also been blighted by the resignation of Iain Duncan Smith, who was overseeing the scheme, after he stood down in March leaving Stephen Crabbe in charge of delivering the scheme.

The Government has persisted with the heavily-criticised cuts even though it ditched cuts to it’s predecessor scheme, tax credits, meaning recipients will see their income drop substantially when they are transferred to universal credit.