Labour is taking advice from lawyers on whether benefit cuts under universal credit are illegal, raising the possibility that the new welfare system could be challenged in court.
Owen Smith, the shadow work and pensions secretary, said it was discriminatory that a single mother working full time on the minimum wage could be almost £3,000 worse off under universal credit than a mother in precisely the same circumstances on tax credits.
“Those lucky enough to stay on tax credits will be massively better off than those on universal credit … That disparity cannot be fair, it cannot be right and it may not even be legal, and we are seeking advice as to the legality of that move,” he said.
In the autumn statement, George Osborne abandoned plans to cut tax credits affecting millions of working families, under pressure from the opposition and many Tory MPs.
However, Labour has pointed out that there will be much lower in-work benefit payments for new claimants put on universal credit – the system championed by work and pensions secretary Iain Duncan Smith that rolls at least six different benefits into one.
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