Labour backs campaign to stop “unbelievable” Universal Credit cuts

Labour has backed a campaign by over 50 organisations calling for Covid Universal Credit increases to be kept in place to stop 700,000 people falling into poverty and said it is “unbelievable” that the government would consider cutting the benefit.

Responding to a letter sent from groups including Barnardo’s, Oxfam and Shelter calling for the Universal Credit Covid uplift to be continued, Labour argued that the government needs to “strengthen the safety net” for suffering families.

The government raised the standard allowance for 12 months earlier in the year as part of the response to the coronavirus crisis, increasing the rate for a single claimant over the age of 25 from £317.82 to £409.89 per month.

The signatories of the letter described the boost as a “lifeline” for many people in the pandemic, and warned that the “good work risks being undermined” if the £20-per-week increase is cut as currently scheduled in April 2021.

Commenting after the Chancellor failed to mention the benefit in his economic update to the Commons last week, Jonathan Reynolds said: “It’s unbelievable that the government is considering cutting Universal Credit in the middle of a jobs crisis.

“The government should have listened to Labour’s calls to up-rate legacy benefits to match the increase in Universal Credit, providing an immediate increase in Jobseeker’s Allowance and Employment Support Allowance upon which so many are now reliant in this jobs crisis.”

The Shadow Work and Pensions Secretary added: “The government must do all it can to strengthen the safety net to prevent families and individuals from sliding further into hardship from which it will be extremely difficult to recover.”

The joint letter, coordinated by the Joseph Rowntree Foundation, has been sent following Rishi Sunak’s winter economic update last week, in which he acknowledged that many people will see job losses in the coming months.

The group of charities, food bank providers, disability groups, trade unions and others warned against pushing hundreds of thousands of people without jobs into poverty, as well as worsening conditions for those already in poverty.

They also emphasised the importance of extending support to include those on legacy benefits, saying it was “simply not right” to abandon the 1.5 million largely sick and disabled people who are on these soon-to-be phased out programmes.

Joseph Rowntree Foundation director Helen Barnard said: “Today’s letter shows the overwhelming support that exists for this lifeline which is playing a critical role in helping many families keep their heads above water in extremely turbulent times.

“Building on existing cross-party support in parliament, we are coming together to urge ministers not to cut social security at precisely the moment our country needs it most. It’s only right to prioritise those hardest hit, pulling families worst affected by the pandemic back from the brink.

“We are united in calling on the Chancellor to keep doing the right thing by making the uplift to Universal Credit permanent and extending it to those claiming legacy benefits.”

Recent research from the Joseph Rowntree Foundation estimated that the end of the £20-a-week increase in April next year would cut annual incomes by £1,040 for 16 million households and push 700,000 people into poverty.

The Shadow Work And Pensions Secretary committed in June to develop a complete replacement for the Universal Credit scheme if Labour wins the next election, saying it was necessary if the party wants to fulfill its plan to end child poverty.

Below is the full text of the letter sent to Chancellor Rishi Sunak.

Dear Chancellor,

Following your statement last week, we are writing to you, to collectively urge you to make the temporary £20/week increase to the standard allowance of Universal Credit and Working Tax Credit permanent from April, as well as extend the same uplift to Employment and Support Allowance, Income Support and Jobseeker’s Allowance.

We welcomed the swift action you took at the start of the pandemic to implement this much-needed investment. Falling incomes and rising costs throughout the pandemic have put families under immense financial pressure, but the £20 uplift has been a lifeline that has enabled many of them to keep their heads above water and has stopped us seeing a marked surge in poverty levels.

However, if the uplift ends in April 2021, this good work risks being undermined. Modelling by the Joseph Rowntree Foundation indicates that around 16 million people will be in households facing an overnight income loss equivalent to £1,040 a year, with those on the lowest incomes and families with children being hardest hit. At a stroke, 700,000 more people will be pulled into poverty, including 300,000 children, and 500,000 more of those already in poverty will be plunged into deep poverty (more than 50% below the poverty line). We are therefore urging you to make the uplift permanent and stop families being cut adrift whilst they need help to stay afloat.

Your statement last week made clear that many families will see job losses over the months to come, and even those whose jobs are protected through the job support scheme will see income cuts. Along with measures to protect jobs, we hoped to see reassurance and commitment to those who have already, or will be faced with, job and income loss. Even the most optimistic forecasts expect unemployment to surge and remain high for some time to come. We warmly welcome the government’s commitment to invest in jobs, skills and infrastructure; these will be vital to boosting opportunity across the country. However, these investments will take time and it is crucial that our social security system offers the certainty and security people need to help them stay afloat so that they are equipped to grasp every new opportunity and are protected from the damaging long term consequences of financial hardship.

Further, it is simply not right that those on legacy benefits, who are mostly sick or disabled people and carers, and so have been most at risk during this pandemic, have not been thrown an equivalent lifeline. We urge you to follow the advice of the social security advisory committee and support 1.5 million more people by applying an equivalent uplift to those on legacy benefits who have so far been excluded from increases.

Our modelling shows that the total cost of making the lifeline permanent (in addition to normal annual CPI uprating) and extending to legacy benefits would be around £9bn a year. A significant investment but crucial for our nation’s recovery. We urge the government to keep doing the right thing, keep families afloat and keep the lifeline.

Yours sincerely,
Action for Children
The Association of Charitable Organisations
Barnardo’s
Become
Bevan Foundation
Centrepoint
Christians Against Poverty
Church Action on Poverty
Citizens Advice
Child Poverty Action Group
Disability Benefits Consortium (a network of over 100 disability organisations)
End Child Poverty Coalition
The Equality Trust
The Fawcett Society
Feeding Britain
Gingerbread
Greater Manchester Poverty Action
Homeless Link
Independent Food Aid Network
Joseph Rowntree Foundation
Lloyds Bank Foundation for England & Wales
Macmillan Cancer Support
The Mighty Creatives
Mind
Motor Neurone Disease Association
The MS Society
National AIDS Trust
National Children’s Bureau
National Education Union
National Housing Federation
Neighbourly
New Horizons
North East Child Poverty Commission
Nourish Scotland
Oxfam GB
The Poverty Alliance
Rethink Mental Illness
The Rt Revd Christopher Foster, Bishop of Portsmouth
The Rt Revd Paul Butler, Bishop of Durham
The Runnymede Trust
The Salvation Army
Save the Children
Scope
Shelter
StepChange
Transforming Lives for Good
The Trussell Trust
Trust for London
Turn2Us
UK Women’s Budget Group
Voluntary Organisations Disability Group
Wales Council for Voluntary Action / Cyngor Gweithredu Gwirfoddol Cymru
Women’s Regional Consortium Northern Ireland
Z2K