Work and Pensions Secretary Esther McVey said some of the poorest Brits in the country would be left “worse off” by the new benefits regime when it expands next year.
The PM's spokesman conceded she was "listening to concerns".
And sources last night claimed the Chancellor may now cave in to Tory pressure and cancel a planned increase in the higher rate tax allowance to pump as much as £2 billion back into Universal Credit at the Budget.
The money was taken out by former Chancellor George Osborne.
And last night the Joseph Rowntree Foundation charity piled on the pressure by saying as many as 3.2 million ‘strivers’ could be left £50 a week worse off under UC than the old tax credits regime.
JRF chief Campbell Rob said most of these are families with children.
He stormed: “Action in the Budget this month would mean working families keep more of their earnings.”
But Iain Duncan Smith, the architect of the scheme, is understood to be leading a campaign backed by as many as 30 MPs to demand Philip Hammond act at the Budget later this month.
The current row was sparked at the weekend by claims Esther McVey had told the Cabinet benefit claimants would be left as much as £2,400 a year worse off when the system is rolled out nationwide.
“I had a very open conversation with my colleagues about how to support people.”
Universal Credit replaces six existing benefits – income support, income-based jobseekers allowance, income related employment and support allowance, housing benefit, working tax credit and child tax credit – with a single payment. Supporters claim it incentivises work.
The system was rolled out in pilot schemes in 2013. About 2 million people already receiving the old benefits will be moved onto UC in a “managed migration” that is not due to complete until 2023.
A Government spokesperson last night said: “We are listening to concerns about how Universal Credit supports people and constantly looking to improve the benefit".
The Sun Says
THERESA May must find the cash to help those losing out in the shift to Universal Credit.
The new scheme DOES work well for many. It is far simpler and, crucially, incentivises work. But cuts by former Chancellor George Osborne are now biting too hard. Some claimants face a severe blow to their income.
If the PM is genuinely “listening to concerns”, as she says, then good.
Voters generally back less generous benefit payments. Especially compared with the absurd levels under the last Labour Government, which fostered idleness and trapped huge numbers permanently on the dole.
But Brits are famously keen on fair play too.
They won’t support families being stripped of money through no fault of their own.