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Thousands face ‘severe hardship’ as Minister rejects UK-wide call to keep Universal Credit uplift

1 September 2021

The Work and Pensions Secretary, Dr Thérèse Coffey, has responded to a letter issued by cross-party committees from Westminster, the Northern Ireland Assembly, the Welsh Senedd and the Scottish Parliament.

The joint letter, sent in July, had called on the Government to extend the £20 a week increase in the standard allowance of Universal Credit, which is due to end in October. It means the standard rates will go down to £257.33 a month for single claimants aged under 25, or £324.84 a month for single claimants over 25.

The Secretary of State’s response confirms that the increase will end as planned on 6 October. She says:

“Now the economy has reopened it is right that the Government should focus on supporting people back into work and supporting those already employed to progress in their careers. Our ambition is to support two million people move into and progress in work through our comprehensive £33 billion Plan for Jobs.”

The original letter was signed by Neil Gray MSP, Convener of Holyrood’s Social Justice and Social Security Committee, Stephen Timms MP, Chair of Westminster’s Work and Pensions Select Committee, Paula Bradley MLA, Chair of Stormont’s Committee for Communities, and Jenny Rathbone MS, Chair of the Senedd’s Equality and Social Justice Committee.

Government statistics show that there were six million people receiving Universal Credit by January 2021, up from about three million in March 2020.

In its first oral evidence session after the summer recess, the Work and Pensions Committee will hear from people with personal experience of claiming Universal Credit during the pandemic. The hearing takes place on Wednesday 8th September at 9.30am.

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said:

“The £20 cut will plunge hundreds of thousands, including children, into poverty. Instead, the Government should extend the lifeline beyond September. The Secretary of State’s dismissive response to our letter suggests that the Government is still in denial about the impact of ending the increase.

“The Government’s new employment support schemes are welcome, but 40% of Universal Credit claimants are already in work. The cut will hit many working families hard. Benefit rates have not kept up with the rising cost of living, and the Government’s plan means that, in real terms, they will fall to their lowest level in over 30 years. The Government must change course to prevent severe hardship for many thousands of families.”

Paula Bradley MLA, Chair, Committee for Communities, said:

“The stark reality is that this £20 per week uplift has been a lifeline for many families across Northern Ireland.

Faced with the unprecedented challenges posed by the pandemic, the decision by the Government to increase the level of payment was welcome as many families faced a drop in household income, while bills and living costs needed met.

However, while this move was always intended to be temporary, the impact of the pandemic remains. Indeed, it is becoming more acute with the phasing out of furlough. Furthermore, the price of food is rising, and it is widely expected that we will, like in GB, see energy price rises over the coming months. This will plunge more families into financial crisis.

This enhanced safety net of Universal Credit simply cannot be cut faced with the current and impending pressures on household budgets.”

Neil Gray MSP, Convener of the Social Justice and Social Security Committee, said:

“The response from the Secretary of State failed to engage on the issues we raised and recognise the large proportion of Universal Credit recipients who are already in work.

“If this cut is to go ahead it would be the single biggest social security cut since the second world war as we are still assessing the impact the pandemic has had on poverty levels for those in and out of work.

“UK Ministers must reflect on the damage this cut will do, particularly to those groups already suffering the most from the pandemic such – children, disabled people, single parents and people from BAME communities – and keep this key support in place.”

Jenny Rathbone MS, Chair, Equality and Social Justice Committee, said:

“The Government’s new employment support schemes are welcome, but 40% of Universal Credit claimants are already in work. This cut will hit many working families hard. So the £20 cut will plunge hundreds of thousands, including children, into poverty. The Government should extend the lifeline beyond September, but the Secretary of State’s dismissive response to our letter suggests that the Government is still in denial about the impact of ending the increase.

Benefit rates have not kept up with the rising cost of living, and the Government’s plan means that, in real terms, they will fall to their lowest level in over 30 years. The Government must change course to prevent severe hardship for many thousands of families.”

Further information

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