Millions of people on Universal Credit could see their incomes slashed by more than £1,000 a year, despite concerns that more families could be plunged into poverty, the Secretary of State for Work and Pensions has signalled.
The UK government boosted the value of Universal Credit by £20-per-week, or £1,040 a year, in response to the financial pressures experienced by low-income families due to the Covid-19 pandemic.
Chancellor Rishi Sunak announced in the 2021 Budget that this “temporary” increase would continue until the end of September to help those who continue to struggle, including the many thousands of people who lost their jobs or saw their working hours reduced.
However, Sunak also hinted that the uplift is unlikely to continue past the current six-month extention.
Responding to his comments earlier this year, Joseph Rowntree Foundation Director Helen Barnard said cutting Universal Credit at the end of September “will pull hundreds of thousands more people into poverty as we head into winter.
“Even before Coronavirus, incomes were falling fastest for people with the lowest incomes due in large part to benefit cuts”, she added.
“Ministers know this short extension offers little relief or reassurance to the millions of families, both in and out-of-work, for whom this £20-a-week is helping to stay afloat.
“This cut to Universal Credit will increase hardship when the economic crisis is far from over and undermine our national road to recovery.
“It is not too late for the Chancellor to do the right thing: announce an extension of the £20 uplift to Universal Credit for at least the next year.”
Asked today by the Evening Standard about whether the temporary boost would continue past September, DWP boss Therese Coffey signalled that it would probably be scrapped by winter.
She said: “By then we’re very confident we’ll have a large majority of the population vaccinated.
“The reasons why we’ve had lockdowns or restrictions in the past is because we needed to reduce the pressure on the NHS to reduce the transmission of Coronavirus.
“By the time of the next winter…I think it will be much better equipped as individuals to be managing that and the pressure on the NHS and hospitalisation should not be an issue in my view, by then or my understanding.”
Asked specifically about the £20 per-week uplift to Universal Credit, Coffey added: “We’re not anticipating, or I’m not anticipating, any further need to do stuff entirely out of the ordinary.”
Commenting, SNP Westminster Leader Ian Blackford MP said: “It is now beyond doubt that Boris Johnson has no intention whatsoever of building a fair and equal recovery after the covid pandemic.
“Instead, the Tories are repeating the same devastating mistakes they made after the last economic crisis, with massive cuts pushing millions of people into poverty, entrenching inequality, and inflicting lasting scars on communities across Scotland and the UK.
“Westminster cannot be trusted with Scotland’s recovery. It’s clearer than ever that the only way to secure a strong, fair and equal recovery is for Scotland to become an independent country, with the full powers to invest in our economy and build the fairer society we all want to see.”
He added: “This pandemic has exposed the deep inequalities that exist under the broken Westminster system.
“The SNP government will use the limited powers of devolution to mitigate the damage caused by Tory cuts where we can – but it is essential that once this crisis is over people in Scotland have the choice of a fairer future with independence.”