Labour is poised to back scrapping Universal Credit as part of a major shift over the Tories' notorious six-in-one benefit.

Senior party sources told the Mirror talks are under way about raising the radical proposal at next week's Labour conference in Brighton.

It comes after a year-long review by Labour found the UC brand is "toxic" and needs "transformative change".

Labour's previous position was to "reform" UC, which is accused of driving families to food banks, rent debt and even sex work since it launched in 2013.

But multiple party sources said scrapping it, and replacing it with a fairer system, is now seen within Labour as the "direction of travel".

It is understood senior figures are looking at a two-stage plan - immediate fixes to Universal Credit, followed by much longer-term reforms to scrap it altogether.

In the short term Labour would axe the current "punitive sanctions regime", though not necessarily all benefit sanctions.

Other short-term fixes are thought to include ending the two-child limit on benefits, the five-week wait for a person's first UC payment, and the cruel benefit freeze.

(Image: Getty Images)

Sources said top Labour figures are still in talks over how long UC might take to scrap, how it would happen or exactly how it will be announced.

But it is understood top allies of Jeremy Corbyn are in talks about an announcement on welfare policy at next week's Labour conference.

One Labour source admitted UC could not be scrapped overnight, but said there was "an absolute determination that Universal Credit will become history."

Another source said: "It is clear that Universal Credit is not working. We need a social security system that provides holistic support from cradle to grave".

They downplayed the idea of a hard and fast timescale to scrap the benefit, adding: "It's got to be pragmatic. It's got to be sensible."

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Labour's 2017 manifesto pledged to "reform and redesign" Universal Credit, which has more than 2million claimants.

But the party signalled it would go further a year ago when it launched a year-long review into welfare policy.

(Image: Jeff J Mitchell)

At the time, Shadow Work and Pensions Secretary Margaret Greenwood said she would not rule out scrapping UC entirely as part of the review.

Later John McDonnell said "all the messages we're getting" are that the entire system "needs replacing". But at that time it was not official, agreed party policy.

Labour set up a major Policy Commission which took evidence from MPs, members, campaigners and charities.

An "overwhelming number" of people who contributed to the review demanded UC is scrapped or radically overhauled.

The Commission's report recommends an "immediate rescue package" followed by "broader policies to bring about transformative change".

The report adds: "There was a clear message from submissions that Universal Credit is now so synonymous with cuts and hardship that the brand itself has become 'toxic'."

The report also said "Universal Credit cannot continue in its current form", adding: "The largest cuts to Universal Credit have come in the form of cuts to work allowances and the four-year freeze on working-age social security payments.

"The submissions received demonstrate that addressing these two policy areas should be immediate priorities for the next Labour government."

Labour's final policy for a general election would only be decided weeks in advance, when senior figures hold a 'Clause V' meeting to finalise the party's manifesto.

Former Tory Work and Pensions Secretary Damian Green told the Telegraph, which first reported the Labour proposals, it would be "unbelievably stupid" to scrap UC altogether.

Last year the National Audit Office warned UC is now so far advanced it is too late to turn back to the old system.

The NAO said in June 2018 that despite "many problems", "there is no practical alternative to continuing with UC" and £1.3bn had already been invested in setting it up.

Separately, the Mirror has campaigned to stop the rollout of UC and replace it with a fairer system.

A Labour Party spokesman declined to comment.

What is Universal Credit?

Claimed by 2.4million people, Universal Credit has been rocked by scandals since Tory Iain Duncan Smith launched it 2013.

It combines six benefits, including Housing Benefit and Jobseekers' Allowance, into one monthly payment to simplify the system.

But top Tories have repeatedly had to reform the new benefit after it was bundled up with billions in austerity cuts.

A study last month found 54% of landlords who let to UC claimants saw them fall into arrears.

And benefit delays were blamed for a fifth of the 1.6million emergency food bank parcels handed out in 2018/19 by the Trussell Trust.

In recent years ministers cut the six-week wait to five, increased advance loans and offered 'run-on' payments to bridge the gap.

They also made the system up to £630 a year more generous in a £1.7bn U-turn, and delayed a move to UC for millions of existing claimants.

But 16% of new Universal Credit claims were still not paid in full within five weeks in March 2019.

And hundreds of thousands of existing welfare claimants are still being moved to UC with no transition payments due to a "change in circumstances" - like a break-up or a child turning five.

In June a 21-year-old told MPs she turned to sex work after Universal Credit left her £52 to live on.

The anonymous escort said it was "horrible" but it ended up being "the easiest thing to keep us girls alive."

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Ministers had claimed there was "little reliable data" UC pushed women to sex work.

But after the woman's testimony, DWP minister Will Quince U-turned and admitted "we need to better understand this area".