DWP chaos around Universal Credit reaches breaking point

There’s a crescendo in the chaos around the Department for Work and Pensions (DWP). Because parliament is about to debate the contentious £20 a week “uplift” the DWP placed on Universal Credit. But, this is the Conservative government. So nothing is that straightforward.

DWP and Universal Credit – chaos looming?

In April 2020, the DWP increased the rate of Universal Credit by around £20 a week. But ever since then, uncertainty has existed over what will happen this April. Because the Tories are ending this increase, so people will see a £20 cut to their payments.

Groups including the Joseph Rowntree Foundation (JRF) have previously stepped in. Last year, in an open letter to chancellor Rishi Sunak, the groups ‘urged‘ Sunak to make the increase permanent. But so far, the Tories haven’t budged on the issue. This is despite the JRF foundation saying the end of the uplift could drag hundreds of thousands more people into poverty. Now, things are coming to a head.

Panic stations

Sunak appears to be in panic mode. The Liverpool Echo reported that he’s drawn up plans for a one-off £500 payment to replace the uplift. As the Guardian reported, it appears to be Tory MPs who are making the chancellor nervous about scrapping the DWP’s uplift. It said:

many Tory MPs are privately worried that the cut will undermine Boris Johnson’s pledge to “level up” the country, and are pushing for the increase to be made permanent.

But this potential £500 payment is not all that it seems. Thinktank the Resolution Foundation’s chief executive Torsten Bell tweeted that it was “not a good idea for two big reasons”. He noted how the DWP scrapping the £20 uplift would see basic social security at record low levels:

Read on...

1. This plans would mean the level of our basic unemployment benefit would be cut to its lowest level since 1992 – that’s madness, particularly at exactly the point at which unemployment is set to rise. pic.twitter.com/jTiqglBdYz

— Torsten Bell (@TorstenBell) January 16, 2021

And Bell also said:

2. A one off payment is a bad way of getting cash to those who will need it most over the year ahead. 6 million households are relying on Universal Credit – but it’s not the same households over time as people have kids or lose/find work.

— Torsten Bell (@TorstenBell) January 16, 2021

He explained that:

the OBR [Office for Budget Responsibility] expects over 800,000 people to become unemployed in Q2 2020 after the JRS [Job Retention Scheme] stops. A one off payment in April does nothing for those who start needing UC later

Couple this with around 700,000 more people in poverty than before the pandemic, and a disaster is looming. Plus, even if the Tories and the DWP keep the £20 uplift, inflation on food alone will mean that come April this year, the money won’t buy as much as it did last year. 

Labour: forcing a vote

So the Labour Party has taken action.

It has forced a vote in parliament on the issue. On Monday 18 January, it will hold what’s known as an opposition day debate. As the Guardian noted, the vote will be:

non-binding but can cause embarrassment for the government.

In other words, the government doesn’t have to do anything if it loses the vote. Now the Tory Party was planning to whip its MPs to vote against Labour’s motion. But as the Telegraph reported, around 50 Tory MPs from the north of England had threatened to abstain. This is because it’s some of their constituencies which have been most affected by increases in DWP claimants. So, the Tory chief whip has changed tune – saying that his MPs can abstain. The Telegraph said this meant Labour would likely win the vote.

Kicking into the long grass

As of Sunday 17 January, the government was still not budging on the issue. Foreign secretary Dominic Raab told the Andrew Marr Show that the £20 uplift was always “temporary”. He called Labour’s debate “political”. And Rabb said that:

we’ve got a March budget well before the end of the temporary uplift in UC which is a chance to look at this in the round.

Universal credit: The £20 uplift was always a "temporary measure", says Foreign Secretary Dominic Raab#Marr https://t.co/FCJqiVzp0F pic.twitter.com/pKK8j1AgEv

— BBC Politics (@BBCPolitics) January 17, 2021

So, it looks like millions of Universal Credit claimants will have to wait for news on the uplift. As a minimum, the Tories need to keep the uplift. Given there appears to be no end in sight to the pandemic, they’d do well to give all Universal Credit claimants the £500 bonus, too.

But moreover, what this catastrophe has shown are the gaping holes in our social security system. If, even during a pandemic, 700,000 more people can be plunged into poverty (even with government help), then clearly something is very wrong with the support the DWP gives during its citizens’ darkest hours

Featured image via geralt – pixabay, Wikimedia and Wikimedia