Shadow Chancellor John McDonnell has said Universal Credit “has got to go” in the strongest signal yet that Labour would scrap the government’s flagship benefit scheme.
Speaking on Sky News, McDonnell said: “I think most people now are coming to the conclusion it has got to be scrapped.”
Labour has previously called for Universal Credit to be paused and reformed.
But McDonnell said the government’s attempts to shake-up the benefit “haven’t worked” and Universal Credit “is not the safety net that people expect when they need support”.
“I think we’re moving to a position now where it’s not sustainable, it will have to go,” he said.
It comes amid reports that Work and Pensions Secretary Esther McVey has privately warned that families could lose £200 a month.
According to The Times, McVey told fellow cabinet members that the rollouts could result in millions of families losing out on the equivalent of £2,400 a year.
It is thought that half of single parents and two out of three working-age couples will be affected by the new system.
McDonnell said the system was “in shambles”.
“These are some of the poorest families in our communities and it’s just not acceptable,” he said. “We are moving toward the conclusion now that you can’t save the thing. It has got to go.”
Asked what Labour would replace Universal Credit with, McDonnell called for a cross-party debate and said it would consult widely.
Brought in by the former Work and Pensions Secretary Iain Duncan Smith, Universal Credit was designed to simplify the benefits system, but the benefit has been associated with a huge rise in the use of foodbanks.
McVey, on Monday, unveiled plans for a £39 million partnership with charity Citizens Advice to support applicants in getting their first payments on time.
Research by the Child Poverty Action Group in August warned that Universal Credit claimants in employment were facing cuts of more than £250 a month as a result of pay day coinciding with assessment periods.
In response to McDonnell’s comments, a Conservative spokesman said: “By scrapping Universal Credit, a programme which has helped deliver record employment, Labour would return to the record of previous Labour governments, every one of which left more people out of work.
“Conservatives on the other hand believe in social mobility and supporting aspiration and people into employment.