The Government announced a 12-month £20 increase in Universal Credit at the beginning of the Coronavirus crisis. The fact this step had to be taken shows that the social security system is not fit for purpose as the existing level of support was inadequate.
As the country looks to the government to renew this vital support, it is unthinkable that the Government is planning to cut Universal Credit by £20 a week, or £1000 a year, in October 2021. This cut will impact 6.2 million families, including those on working tax credits. This £20 is what enables some of them to put food on the table at the end of the week. Despite being asked over 40 times in the Chamber, Government representatives have refused to commit to ruling out the cut.
The Resolution Foundation has estimated that, if the £20 a week cut to Universal Credit goes ahead, the rate of basic unemployment benefit will fall to the lowest level in real-terms since 1992. The government simply cannot justify giving such meagre support to those hit by the pandemic. You can watch Jonathan Reynolds recent interview on this very point here.
Labour has consistently called on the Government not to cut Universal Credit in April 2021. In November, we launched our Cancel the Cut campaign which you can see here.
I also believe that legacy benefits, such as Employment and Support Allowance and Jobseeker’s Allowance, should be uprated in line with UC. Back in May last year, the Government said it would not increase legacy benefits on the grounds that it would take several months to change the system. However, we are now well beyond the point where that uplift could have come online. As more than 100 charities have highlighted, not increasing legacy benefits discriminates against disabled people in particular.
The UK Government has the wrong priorities. They wasted £22bn of taxpayers’ money on a testing system that doesn’t work and spent billions on contracts to Tory donors – but now they can’t find the money to support families. Dominic Cummings’ £40,000 pay rise alone would have spared 40 families this brutal cut for an entire year.
While UC is a reserved matter for the UK Government, the Scotland Act 2016 devolved significant new welfare powers to the Scottish Parliament, including responsibility for disability and carers’ benefits; benefits for maternity, funeral and heating expenses; and powers to vary the housing cost element of UC and UC payment arrangements. The Scottish Government has regulation-making powers to vary the housing element of UC and powers to vary how it is paid. The Scottish Government has postponed taking on these welfare powers until 2024 despite them passing in 2016.
Labour’s shadow DWP Minister has written more about this, which you can see here
In Scotland, we have the power to make different choices, and my colleagues in the Scottish Parliament have repeatedly called upon the Scottish Government to use those powers for a £10 million cash injection to Discretionary Housing Payments for those most affected by the cost of living crisis brought about by cuts to UC. This would help protect some of the most vulnerable people in our society.
Millions of families are relying on the £20 a week uplift in Universal credit as a lifeline as we come through this crisis, especially as they face increased costs associated with the pandemic. Now is the time for more support, not cuts. By delaying a final decision on whether the cut will go ahead, the government is adding to stress and uncertainty for low-income families at an already extremely difficult time. The Government need to put families first and cancel the cut.
The sacrifices families have made in the past year have been unimaginable. We can’t ask those who are already struggling to shoulder this burden. That is why I will continue to call on the Government to cancel the cut to Universal Credit. I have recently written to the Secretary of State for Work and Pensions on this and will be updating constituents in due course.
The immediate priority is to make sure that people get the support they need during the pandemic. However, there is much more work to do. I and my Labour colleagues do not just want the £20 uplift maintained, but also want to see the end of the five-week wait, the two-child limit, the benefit cap, and conversion of UC loans into grants. In the longer term we want to scrap UC altogether and replace it with a system that actually works for families and supports them when they need it. We need a new social security system which provides a proper safety net and has dignity and respect at its heart.