Labour to consider scrapping universal credit in major overhaul of 'toxic' welfare system, speech reveals

Margaret Greenwood, the shadow work and pensions secretary, announces a major review of the 'toxic' welfare system

Labour will consider scrapping the government's controversial benefit reforms, which have been accused of pushing thousands of people into poverty.

Margaret Greenwood, the shadow work and pensions secretary, announced a major review of the "toxic" welfare system, including the flagship universal credit policy, in a speech to party activists.

The roll-out of universal credit has been dogged by controversy, with warnings that people are being plunged into debt, rent arrears and reliance on foodbanks due to delays in payments.

Asked whether she would scrap it, Ms Greenwood told The Mirror: "We're not ruling anything out, because we think it's important to be on top of all of the detail of it before making a decision."

The plans mark a shift in Labour's policy away from their official pledge to "pause and fix" universal credit, which merges six existing benefits into a single payment.

In a speech to Labour's annual conference in Liverpool, Ms Greenwood set out proposals to ban punitive sanctions for people who turn up late to benefits appointments in addition to plans to end the benefits freeze by raising rates in line with inflation.

She announced a sweeping review of welfare over the next year, that will move away from Conservative ideas that have "vilified" people on benefits.

“I meet a lot of people in their middle years who say, 'I can't face going to the job centre because I find it too humiliating',” she said.

“Well that's absolutely wrong, because those people have worked 20, 30 years – they're entitled to get support.

“They shouldn't be made to feel that somehow there's a stigma attached to them."

The Wirral West MP added: “If you talk to people working in the social security system at the moment, I've had it described to me as the circle of hell.

“We're not going to be squandering money on a punitive regime, which at the moment seems to have lost sight of itself. It seems to be punishment for punishment's sake.”

Ms Greenwood also went further than the party's manifesto by pledging to "end the benefits freeze", after senior figures previously said such a move was "unaffordable".

She told delegates: "We are ambitious for our country and for all of our people. That is why today I am promising a complete change of direction.

"We will end the hostile environment that the Tories have created by completely overhauling our social security system. We will rebuild it and restore dignity at its heart."

Work and pensions secretary Esther McVey was recently rapped by the government's spending watchdog for misrepresenting a critical report on the roll-out of universal credit.

Ms McVey was forced to apologise in parliament for "inadvertently" misleading MPs over a National Audit Office (NAO) report, claiming the NAO said it should be rolled out faster.