Labour has called on the government to back struggling families and cancel the planned cut to Universal Credit after it was confirmed that the £20-per-week uplift to the benefit will not be extended beyond the autumn.
Theresa Coffey told a parliamentary committee today that, despite widespread calls from MPs and charities to make the uplift permanent, the government still plans to cut the rate of Universal Credit at the end of September.
“The government’s plans to cut Universal Credit will hit the lowest paid hardest and hurt our economic recovery. Six million families are set to lose £1,000 a year while out of work support will be left at its lowest level in decades,” Labour’s Jonathan Reynolds said.
The government granted a £20-per-week benefit increase when faced with large numbers of people struggling in the first wave of the pandemic. It raised the standard rate for a single, over-25 claimant from £317.82 to £409.89 per month.
Although a limited uplift, not available to those still on legacy benefits, it was described by a group of over 50 charities as a “lifeline” for many during the Covid crisis. But minister have claimed it was “always a temporary measure”.
The uplift had been due to be scrapped in April this year, but following pressure from the opposition and Conservative MPs, and the extension of furlough, Chancellor Rishi Sunak extended the increased payment until September.
The Shadow Work and Pensions Secretary said today: “There is near universal opposition to this cut, including from prominent Conservatives. It is time the government saw sense, backed struggling families and cancelled their cut to Universal Credit.”
Both Conservative and Labour MPs have urged the government to rethink the £5bn cut, while charities have warned that the decision will hit six million households across the country and push 200,000 more children below the poverty line.
Tory MP Nigel Mills criticised the government for taking away the uplift “regardless” of the lack of evidence on how the reduction in benefit would affect claimants. “It sounds like this is a dates, not data, decision,” he said.
A survey by retail trade union Usdaw found that 57% of workers on UC are struggling to pay their gas and electric bills, and 80% said they would be worried or very worried if the uplift was removed.
Six Tory MPs urged the Work and Pensions Secretary to make the uplift permanent earlier this week, and former Conservative Party leader Iain Duncan Smith said removing the increase would “damage living standards, health and opportunities”.
Asked whether she had lobbied the Chancellor to retain the uplift, Coffey told the committee: “A collective decision was made within government to make sure the £20 uplift was extended for six months, and that is being honoured.”
Coffey suggested the withdrawal is part of a push to get people into work, despite government figures showing that almost 40% of people on the benefit are in employment. Universal Credit is claimed by over five million households.
She added: “It will largely start to kick in during October but it will be September for some people. The current proposal is that we will be recognising this was brought in in line with temporary measures to support people during the pandemic. It’s being phased out in line with all the other temporary measures.”
Coffey said she was not ignoring those in financial hardship. “We’re not putting our head in the sand,” she said. “We’re not trying to pretend everything is going to work out for every individual, but that’s why we’re investing in people.”
She claimed that the government has invested £3bn in the ‘Restart’ programme, which aims to give those on Universal Credit enhanced support to find employment where claimants have been out of work for between 12 and 18 months.
Reynolds has previously pointed out that analysis of Treasury documents shows the Restart programme “won’t actually get up to scale until 2022”.