Families left in crippling uncertainty over Universal Credit decision

@jrf_uk and @NEUnion response to the House of Commons debate on Universal Credit 

Earlier this week, the Government has abstained on a motion to keep the £20 a week increase to Universal Credit and Working Tax Credit.

Despite significant cross-party support for keeping this lifeline in place, 6.2 million families tonight continue to face a £1,040 a year cut to their incomes in April.

Recent polling from the Health Foundation found that 59% of the public support making this increase permanent beyond April.

JRF’s latest modelling shows that if this cut goes ahead as planned:

• 500,000 more people will be pulled into poverty, including 200,000 children.
• Around 6 in 10 of all single parent families, and 3 in 10 couple parent families are set to be hit by the £1,040 cut to their incomes.
• Over half of families losing out contain someone who is disabled and a fifth are BAME families, meaning these groups are disproportionately affected.

The result of this debate comes as JRF’s latest annual report on poverty warned that over the past decade those with the least have suffered the most financially, and continue to be hit hardest by the economic impact of COVID-19.

Tony, who lives in Yorkshire and receives Universal Credit alongside working in a self-employed capacity, said:

“When the uplift in Universal Credit was first introduced it was a very welcome relief as we were finally able to clear a couple of household bills which were falling into arrears. It also meant that the impact of the various lockdowns on us mentally were not as damaging as they would have been otherwise.

“The withdrawal of the Universal Credit uplift would be unnecessarily harsh on the most vulnerable in our society. Universal Credit has not kept pace with inflation for several years and has subsequently decreased in value. To withdraw the uplift at any time would have a very negative impact and would simply be unjust. To do so while we are still in the grip of a pandemic will undoubtedly drive families into further debt and possible destitution.”

Helen Barnard, Director of the Joseph Rowntree Foundation, said:

“Unacceptable levels of poverty did not start with the pandemic. We have just experienced a decade of deprivation in which incomes were falling fastest for those with the least. And the incredibly tough situation millions are now facing due to the pandemic could be made even worse if we don’t make the right decisions now.

“Delaying the decision on the future of the Universal Credit uplift leaves families facing crippling uncertainty. With unemployment set to rise much further and remain high in the coming years, it would be totally wrong to cut support and pull half a million people into poverty.

“The Government is at risk of being out of step with the public on this issue if it does not act. None of us want to live in a country where more and more people need to turn to food banks or where millions of children start their lives in poverty. A strong social security system supports people in and out of work to achieve a decent life. We must make the uplift to Universal Credit permanent or we risk causing another damaging decade of hardship.”

JRF is calling for the Government to urgently commit to making the £20 uplift to Universal Credit and Working Tax Credit permanent. It must also be extended to legacy benefits which are mostly claimed by sick and disabled people and carers who have wrongly been excluded from this additional support.

Dr Mary Bousted, Joint General Secretary of the National Education Union, said:   

“More than 1 in 4 children across the UK are growing up trapped in poverty, but we are still having the same conversations about whether MPs will do the right thing to tackle the scourge of child poverty in 2021. 

“The NEU welcomes Labour’s decision to focus their debate today on universal credit, free schools meals and remote access to learning. If the Government adopts the measures proposed by Labour this will demonstrate that Ministers are serious about promoting children and young peoples’ health, wellbeing and education. Adopting these measures would also help achieve much better outcomes for our young people in this period of lockdown than we have seen over the last ten months. 

“The last few months have shown that there’s strong public support for a clear strategy to solve poverty in our country. Extending Free School Meal (FSM) provision to cover the school holidays would ensure 1.3 million children will no longer have to live with the fear and anxiety of holiday hunger looming over every school break. 

“Currently over 1.7 million children growing up in families on Universal Credit, some surviving on less than £20.50 a day, are not eligible to receive the support of FSM. Extending provision to include these low-income families would provide much needed security for children and remove the barrier hunger creates, preventing too many from reaching their full potential. 

“Teachers, heads and parents are working their hardest to collaborate around remote education, but a lack of appropriate equipment continues to limit access to safe learning from home for at least one million children and young people. Schools cannot wait any longer for these promised resources. Providing a new, dedicated technology budget for all schools would enable schools to support their pupils directly and at speed. With continued uncertainty around the progress of the R rate in the coming weeks and months, access to remote learning must be a priority of Government to protect and support our children’s learning experience.  

“This pandemic has shown that many people may need to rely on the social security system at some point. The Government did the right thing last year by uplifting Universal Credit by £20, but the level of need has not changed so they must make this permanent and extend to people on legacy benefits. Government has to act boldly to ensure this lifeline is not cut during this time of huge pressure on families. 

“We urge MPs to use their vote today to ensure that no child is left behind.”