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A Scots council used as a testing ground for Tory welfare reform has revealed soaring levels of rent arrears.

Nearly three-quarters of tenants on Universal Credit have fallen behind with rent in East Lothian.

The council was the first to get Universal Credit’s “full digital system”, introduced by the UK Department for Work and Pension two years ago.

A report on the harsh reality of welfare changes was drawn by officials this week.

Labour MSP Iain Gray, who covers the area, said it should serve as warning to the rest of the country.

(Image: PA)

He said: “East Lothian has suffered UC for two years now, and it has caused nothing but difficulty, distress and deprivation.

“The waiting period and cuts to benefits have forced many of my constituents into debt. Council rent arrears have soared by 30 per cent, and over 70 per cent of council tenants on UC are in arrears.

“That is damaging to the council and its income, but more importantly it is damaging the lives of those who find themselves in debt it may take them years to clear, if ever.

“UC is a disgrace of a system, and the government should get it sorted. It is already blighting lives in East Lothian, and the rest of the country is going to be no different.”

The level of rent arrears for people on UC is dramatically higher than the 30 per cent figure for all council tenants.

East Lothian says it’s owed nearly £1million - and warned the move to UC in the region has been “extremely challenging”.

The DWP insist Universal Credit helps people into work.

“The majority of claimants are comfortable managing their money but we are increasing support to help people who need it stay on top of their payments.”

The extent of the damage emerged as MSPs continue to put the finishing touches to new social security legislation for Scottish welfare.

Yesterday, Holyrood’s social security committee agreed pensioners will not be means tested for winter fuel payments.

Means testing will also not be applied to disability benefit and employment injuries assistance.

The Social Security Bill was made possible by the pre-referendum Vow of more powers for Holyrood.