UK's Universal Credit Cut Explained

The past few weeks have seen a significant increase in the cost of living in the UK. Gas prices have risen sharply due to short supplies, food shortages have been reported across the UK and the cost prices of many more daily essentials have risen. Amongst all these price rises, the government has successfully passed its motion to remove the temporary uplift to the Universal Credit payments (which is the standard benefits payment available), which will officially end on 6th October 2021. This uplift provided claimants with an extra £20 per week on top of their usual payments. This rise was brought in during the Covid-19 pandemic in order to help claimants who may have been out of work or otherwise struggling with the demands of the pandemic.

Government Policy:

Speaking in defence of their decision, the government has stated that the uplift was only ever intended to be a temporary measure, rather than a permanent increase to Universal Credit. The government will be focusing on its Plan for Jobs, which aims to create jobs and help young people find employment.

The Secretary for Work and Pensions, Therese Coffrey, suggested that Universal Credit claimants should take on extra hours at work to make up for the decrease to their payments. A government spokesperson later stated that the government aims to help people “increase their incomes in a number of ways.” The government’s desire to improve employment rates is undoubtedly a good intention, however, 40% of Universal Credit claimants are already in employment, meaning that more had to be done in order to support all claimants who were earlier relying on the £20 uplift.

Source: Wales Online

Consequences of Removing the Uplift:

A study published by the Joseph Rowntree Foundation has found that “on average 21% of all working-age families (with or without children) in Great Britain will experience a £1,040-a-year cut to their incomes…” The study found that the increase of £20 per week was significantly beneficial for the claimants and increased social support.

Removing £20 per week from the budget of thousands of individuals and families will lead to more and more people struggling with the increase in the cost of living in the UK. The Trussell Trust, which organises food banks across the UK, has been running the #KeepTheLifeline campaign on Twitter to raise awareness about the consequences of the cut to Universal Credit. The trust has highlighted how the extra money was being used by families to provide “food, heating, clothes, school uniforms, and toiletries.” The charity warns that removing the uplift will lead to many people facing difficult financial decisions in the coming months.

Criticisms of Removing the Uplift:

The government’s decision to remove the rise in Universal Credit has been met with widespread criticism from people across many areas of society. The Bishop of Durham, Paul Butler, spoke out against the move, stating that many families will ‘risk going back into poverty’ as a result of this removal.

Criticism has also come from within the government party itself. Senior Conservative MP Steve Baker believes that the government should reverse its decision and reinstate the £20 per week increase. He stated that finding the money to maintain the increase in Universal Credit should take “absolute priority.”

Labour Leader Sir Keir Starmer has argued that due to recent price increases, the removal of the uplift has come at the wrong time. This has been reiterated by Jonathan Reynolds, Shadow Work and Pensions Secretary, who stated that the government should “do the right thing” by prioritising the needs of their constituents in relation to Universal Credit.

What You Can Do:

Get in touch with your political representatives and advocate for your beliefs. In Scotland, Wales and Northern Ireland, the devolved institutions have faced calls to reinstate the Universal Credit cut for their respective regions. You can keep up to date with these developments and campaign on behalf of those impacted.

You can also invest your time and effort in gaining deeper awareness about the financial decisions and issues in your country and find and participate in campaigns that are working towards social welfare with regards to financial welfare of the citizens.

Sources:

HM Treasury (2020) ‘A Plan for Jobs speech’ Available at: https://www.gov.uk/government/speeches/a-plan-for-jobs-speech

BBC (2021) ‘Universal Credit:Cut is two hours extra work for claimants, says Therese Coffrey’ Available at: https://www.bbc.co.uk/news/uk-politics-58547881

The Trussell Trust (2021) ‘Party conference and the Universal Credit cut: the Chancellor would do well to listen to his own party members’ Available at: https://www.trusselltrust.org/2021/10/07/party-conference-and-the-universal-credit-cut-the-chancellor-would-do-well-to-listen-to-his-own-party-members-%E2%80%8B/

Joseph Rowntree Foundation (2021) ‘Universal credit - the impact of cutting the £20-a-week’ Available at: https://www.jrf.org.uk/universal-credit-cut-impact-constituency

BBC (2021) ‘Bishop of Durham hits out at universal credit uplift cut’ Available at: https://www.bbc.co.uk/news/uk-england-tyne-58842165

BBC (2021) ‘Universal credit reduction: ‘What the end of the £20 top-up means for me’’ Available at: https://www.bbc.co.uk/news/uk-england-nottinghamshire-58831254

BBC (2021) ‘Find more money for universal credit, says senior Tory Steve Baker’ Available at: https://www.bbc.co.uk/news/uk-politics-58827100

The Guardian (2021) ‘Keir Starmer: universal credit cut is an attack on the poorest’ Available at: https://www.theguardian.com/society/2021/oct/08/keir-starmer-universal-credit-cut-is-an-attack-on-the-poorest

The Independent (2021) ‘Labour challenges Tory MPs to ‘do the right thing’ and oppose Universal Credit cut’ Available at: https://www.independent.co.uk/news/uk/politics/labour-tory-universal-credit-axed-b1920261.html