The Tories are still going to cut Universal Credit by £20 a week. Now, a think tank has given a stark warning about the effect this will have. But will the government listen? And was the £20 uplift really adequate in the first place?
Universal Credit chaos
As The Canary has documented, the DWP’s provision of Universal Credit during the coronavirus (Covid-19) pandemic has been marred by chaos. There’s been a lot of debate about the £20 a week uplift. In April 2020, the DWP increased the rate of Universal Credit by this amount. Then, chancellor Rishi Sunak confirmed in his Budget on Wednesday 3 March 2021 that the DWP would keep the £20 uplift. But as the Mirror pointed out, 6 million people still faced a:
This is because Sunak and the DWP have only put the £20 increase in place until September 2021. From the 6 October, the Tories will be cutting £20 a week from Universal Credit claimants.
Now, the Joseph Rowntree Foundation (JRF) has released new research into how the cut will affect people. And it’s another damning assessment of the DWP and the Tories’ actions.
The JRF pointed out what it called “five facts” about the Tories’ cut. It said:
- The Government would be responsible for the biggest overnight cut to the basic rate of social security since the birth of the modern welfare state. This will be a huge shock for millions of people on low incomes who will have £20 less to spend each week.
- Half a million more people are set to be pulled into poverty, including 200,000 children.
- Working families make up the majority of families who will be affected by the cut to Universal Credit and Working Tax Credit.
- Families with children will be disproportionately impacted. Around 6 in 10 of all single parent families will experience their income falling by the equivalent of £1,040 per year because of the cut
- Despite a commitment to ‘levelling up’ the impact of the cut will be the greatest across the North of England, Wales, the West Midlands and Northern Ireland.
Already in poverty
It also gave illustrations of how the cut would financially impact people. The JRF took the average situation for a “three children, where one adult is working full-time, and the other is working part-time (living in Kernow West, a medium cost area)”. It calculated that:
- In 2013/14, they would have been £271 a month above the poverty line.
- Cuts and freezes in the decade leading up to the pandemic eroded their income, so that even with the £20 increase in 2020, they are now below the poverty line.
- If… the cut goes ahead, they will be a huge £150 per month below the poverty line.
This fact that the JRF pointed out – that even with the £20 uplift this family would still be in poverty – is crucial.
As The Canary previously reported, research from the Welfare at a (Social) Distance project found the £20 uplift to be “inadequate”. It looked at the situation for new and existing claimants of Universal Credit in 2020. It found that even the £20 uplift didn’t make the social security payment enough for people to survive on. The project’s research found that for new claimants:
- Over 50% said their income had fallen by more than 25%:
- Over 50% said their outgoings either stayed the same or increased.
- Around 62% of people couldn’t even save £10 a month. And roughly the same number wouldn’t have been able to buy something like a fridge if theirs broke.
These last two were classed as the “less severe” impacts of the DWP’s level of payments. Additionally, over 50% of new claimants said they either:
- Struggled with affording food.
- Couldn’t afford fresh fruit and veg.
- Fell behind on their housing costs.
- Couldn’t keep up with bills/debts.
The inadequacy of Universal Credit hit disabled people the hardest.
Giving the Tories leeway
So, given that even with the £20 uplift Universal Credit the situation is still appalling, calling to just maintain the increase is problematic. Not least because of the fact that inflation has gone up. The cost of goods and services, driven by price increases to things like food, rose by 2.5% year-on-year in June. This may well mean that the £20 uplift is now worth less than it was in April 2020.
But there’s also the possibility that the Tories will use the £20 uplift to their advantage. If they decide to keep it in place, they can claim they’ve listened and acted. But with the uplift being utterly inadequate, this won’t help the millions of people already struggling. And it’s unlikely, given the repeated lie that we’ve borrowed loads of money and are going to have to pay it back, that the Tories will increase social security again any time soon.
So, we need to be fighting for more than just £20 a week. We all need to be arguing for a social security system that is truly fit for the 21st century; one that doesn’t throw people into poverty and onto the scrapheap.
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