Tag: benefit cuts

Cancel the Cut: ONE HUNDRED organisations urge Prime Minister not to cut Universal Credit

The largest coalition of organisations to date on this issue has signed a joint open letter to the Prime Minster calling on him not to go ahead with the planned £20-a-week cut to Universal Credit and Working Tax Credit, due to come into effect on 6 October.

The joint letter, coordinated by the Joseph Rowntree Foundation, is signed by a wide range of 100 organisations that operate at a national level as well as in communities across the UK. Among the signatories are leading voices on health, education, children, housing, poverty, the economy and other aspects of public policy.

OPEN LETTER

Dear Prime Minister,

We are writing to collectively urge you not to go ahead with the planned £20-a-week cut to Universal Credit and Working Tax Credit at the beginning of October.

Many of us provide frontline support in communities up and down our country and see first-hand the importance of our social security system. Life is full of crises that we cannot plan for, such as job loss or illness, and periods of lower earnings or caring responsibilities. We all need the security and stability of a strong lifeline, not just during a national crisis, but every day.

Imposing what is effectively the biggest overnight cut to the basic rate of social security since World War II will pile unnecessary financial pressure on around 5.5 million families, both in and out of work.

At the start of the pandemic, the Chancellor rightly said that he was introducing the £20 increase to “strengthen the safety net” – a tacit admission that a decade of cuts and freezes had left it unfit to provide the support families need. We all strongly supported this crucial improvement in support.

We are at risk of repeating the same mistakes that were made after the last economic crisis, where our country’s recovery was too often not felt by people on the lowest incomes. The erosion of social security support was one of the main drivers of the rise in in-work and child poverty, and contributed to a soaring need for food banks, rising debt and worsening health inequalities.

We deeply regret that the Department for Work & Pensions has not published its assessment on the impact of cutting Universal Credit and Working Tax Credit. However, the latest independent analysis from the Joseph Rowntree Foundation (JRF) shows it risks plunging 500,000 people into poverty, including 200,000 children. It will take the main rate of out of work support down to its lowest levels in real terms since around 1990.

This is not a question of having to choose between a recovery based on getting people into jobs or investing in social security, in fact most families impacted by this cut to Universal Credit and Working Tax Credit are already in work. The reality of the UK labour market means that to improve living standards, we need to both improve job quality and strengthen the social security system. We also must never lose sight of the need to provide adequate support to families who are not able to work so they can meet their needs with dignity.

Six former Conservative Work & Pensions Secretaries believe previous cuts to social security spending went too far and oppose this cut, and your own Conservative MPs are warning that it will have deep and far-reaching effects in their constituencies.

Recent analysis from JRF shows that 413 parliamentary constituencies across Great Britain will see over a third of working-age families with children hit by the planned cut to Universal Credit and Working Tax Credit on 6 October 2021. Of these 413 constituencies, 191 are Conservative – 53 of which were newly won at the last general election or in a subsequent by-election.

This looming cut would fundamentally undermine the Government’s mission to level up. Citizens Advice has identified that people are one and a half times more likely to claim Universal Credit in places the Government has prioritised for levelling up investment. They also found for every £1 that could be invested from the Levelling Up Fund in England, £1.80 would be taken from these local economies if the Government presses ahead.

Furthermore, it is unacceptable that legacy benefits, such as Employment and Support Allowance, Jobseeker’s Allowance and Income Support, continue to be excluded from this crucial improvement in support, mostly impacting people who are sick, disabled or carers. 

We are rapidly approaching a national crossroads which will reveal the true depth of the Government’s commitment to improving the lives of families on the lowest incomes.

We all want a social security system that supports families to escape poverty rather than pulling them deeper into it. However, this cut risks causing immense, immediate, and avoidable hardship. A strong social security system is a crucial first step to building back better. We strongly urge you to make the right decision.

Yours sincerely,

Action For Children

Advice NI

APLE Collective

The Association of Charitable Organisations

Become

Bevan Foundation

The Big Issue

Bright Blue

The British Association of Social Workers

British Psychological Society

Business in the Community

Carers UK

Caritas Social Action Network

Centre for Cities

Centrepoint

Child Poverty Action Group

Children England

Christians Against Poverty

Church Action on Poverty

Citizens Advice

Citizens Advice Scotland

Citizens UK

Communities that Work

Crisis

Disability Benefits Consortium (a network of over 100 disability organisations)

Employment Related Services Association (ERSA)

End Child Poverty Coalition

End Furniture Poverty

The Equality Trust

The Faculty of Public Health

Family Fund

Feeding Britain

The Food Foundation

Generation Rent

Gingerbread, the charity for single parent families

Greater Manchester Poverty Action

The Health Foundation

Homeless Link

The Hygiene Bank

Independent Food Aid Network

Institute for Public Policy Research (IPPR)

Joseph Rowntree Foundation

Jubilee Debt Campaign

Learning and Work Institute

Little Village

Lloyds Bank Foundation for England & Wales

Macmillan Cancer Support

Mental Health Foundation

Mind

Money Advice Trust

The MS Society

National AIDS Trust

National Association of Head Teachers (NAHT)

National Children’s Bureau

National Education Union

National Housing Federation

National Residential Landlords Association

National Survivor User Network

Neighbourly

New Economics Foundation

North East Child Poverty Commission

Northern Housing Consortium

Octavia

One Parent Families Scotland

Oxfam GB

PlaceShapers

Policy in Practice

The Poverty Alliance

The Poverty Truth Community

Rethink Mental Illness

RNIB (Royal National Institute of Blind People)

RNID

The Robertson Trust

Royal College of Paediatrics and Child Health

Royal College of Psychiatrists

Royal Society for Public Health

The Runnymede Trust

The Salvation Army

Save the Children

Scope

Scottish Out of School Care Network

Shelter

St Mungo’s

Standard Life Foundation

StepChange

Sustain: the alliance for better food and farming

SVP Northern Ireland

Transforming Lives for Good (TLG)

The Trussell Trust

Trust for London

TUC (Trades Union Congress)

Turn2us

UCL Institute of Health Equity

UK Women’s Budget Group

Women’s Regional Consortium Northern Ireland

Working Families

Young Lives vs Cancer

Young Women’s Trust

Z2K

4in10 London’s Child Poverty Network

TUC: Universal  credit cut will hit millions of working families  and key workers

The UK Government has now confirmed that £20 a week will be cut from Universal Credit in October. By removing this lifeline, poverty will increase among the 6 million claimants of Universal Credit, says the TUC. 

40 percent of these claimants – over two million people – are in work. 

Number of people on Universal Credit 2020/21 (including in work and out of work breakdown):

1

Source – TUC analysis of stat explore data using May 2021 data 

Our new analysis reveals the regional and local impact cutting Universal Credit will have on low-paid workers.  

Numbers on Universal Credit in work by region/nation (May 2021):

Region/nation Number in work receiving UC Total number receiving UC  % Of UC recipients in work 
North East 100,437 281,759 35.6% 
North West 282,131 755,400 37.3% 
Yorkshire & Humber 194,344 518,269 37.5% 
East Midlands 166,265 403,272 41.2% 
West Midlands 214,730 585,069 36.7% 
East of England 199,459 494,271 40.4% 
London 375,426 1,015,321 37.0% 
South East 274,235 677,609 40.5% 
South West 184,983 439,612 42.1% 
Wales 103,609 279,068 37.1% 
Scotland 176,935 481,263 36.8% 
Total 2,274,976 5,938,914 38.3% 

Source – TUC analysis of stat explore data using May 2021 data – for constituency level data see press release  

The impact on poverty 

The government justifies the £20 cut by saying its focus is to move people into jobs, but this misses the point. Many of those on Universal Credit (40 percent of claimants) are already in work.  

2.3 million workers, many of which are key worker households, will be worse off as a result of the government’s plans to cut universal credit.  

The working tax credit is also being cut, having also been raised by £20 per week in early 2020. This cut to crucial in-work support will push more families below the breadline.  

Analysis by the Joseph Rowntree Foundation shows the majority of families that lose out will be working families.  

These cuts are likely to worsen already record-high levels of poverty.  

Just before the pandemic hit, poverty was at a record high, with 14.5 million people in poverty. The majority of these (57 per cent, or 8.3 million people) were in working households. The idea that work is a guaranteed route out of poverty is now simply not true.  

Low standard rate 

Even with the increase in the rate by £20 a week – the basic rate of universal credit is worth around a sixth of average weekly pay.  

The UK system is strikingly less generous than in most other European countries, where unemployment benefits are related (at least in the initial period of unemployment) to previous wages to cushion income shocks, ranging from 60 per cent of previous wages in Germany to 90 per cent in Denmark.  

The TUC believes that rather than being cut, Universal Credit should be increased to at least 80 per cent of the level of the living wage, around £260. 

And the temporary £20 top-up excluded those on legacy benefits all together, many of whom are disabled or carers, and cannot work. This should be extended to these claimants too.  

Change is needed 

The UK safety net is failing as a result of years of deliberate attacks on the social security system, with around £34 billion of cuts made to social security since 2010. 

The reason for increasing Universal Credit and Working tax credits was that previous rates were too low. Removing this increase makes no sense. The pandemic might – hopefully – be going away, but the need for social security isn’t. 

The £20 increase in universal credit has been a “vital lifeline” for low-paid workers: having £20 a week less to spend will mean going without the essentials in life. 

An ambitious agenda to tackle in-work poverty would include decent pay, secure work, progression opportunities for those on low incomes, and affordable childcare and housing costs. 

It would not include a cut to the lifeline support that working families across the country are relying on.  

Committees unite to call for UC uplift to be made permanent

The UK Government should make the £20 per week uplift to Universal Credit and Working Tax Credit permanent, according to a joint letter issued by cross-party committees from Westminster, the Northern Irish Assembly, the Welsh Senedd and the Scottish Parliament.

The Chancellor of the Exchequer, Rishi Sunak and Work Pensions Secretary, Thérèse Coffey, have confirmed that the uplift will come to an end in October.

However, if the uplift is removed, the 6 million people claiming Universal Credit will lose £1,040 in annual income overnight. According to the Joseph Rowntree Foundation this could force 500,000 people, including 200,000 children, into poverty.

The letter also raises concerns that the benefit will be removed from families at the same time unemployment is due to peak as the Coronavirus Job Retention Scheme comes to an end.

The Committees call on the uplift to be extended to legacy benefits, to make sure those in need do not miss out.

The 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.

Neil Gray MSP, Convener of the Social Justice and Social Security Committee, said: “The UK Government did the right thing at the start of the pandemic to increase Universal Credit and Working Tax Credit to give better support to people during these incredibly challenging times.

“But removing the uplift in October would have devastating consequences for our most vulnerable in society, who have been hit hardest by this pandemic.

“This risks sending many more people into poverty at a time when we should be doing all we can to support them.

Mr Gray added: “All four of our Committees agree that by spending this money now on social security, we can avoid putting more people into poverty, helping save more money in the longer term on health, education, justice and other social services.”

Rt Hon Stephen Timms MP, Chair of the House of Commons Work and Pensions Committee, said: “To sweep away such a vital lifeline from people who have felt the very worst effects of the pandemic risks plunging hundreds of thousands of people into poverty at a time when they will have had little or no chance to get back on their feet.

“Six Conservative former welfare secretaries have warned the Chancellor of the grave consequences of his proposed course of action. The strength of feeling on all sides of the political divide, and across the UK, could not be clearer. The Government must change course.

“At the same time, the Government must also increase support for the people who, through no fault of their own, are still claiming older benefits and have received no pandemic-related increases at all – despite their living costs rising during the pandemic.”

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

“Whilst, in Wales, policy relating to Universal Credit and other social security benefits is reserved to Westminster, we are deeply concerned about the impact removing the uplift might have on widening social inequality in Wales; growing indebtedness as a result of the economic impact of Covid; and the ability of low income families to eat as well as pay their rent.”

Homes for Everyone: Solidarity protest with homeless people

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Scrap the Cap, Stop the Evictions: exhibition launch at North Edinburgh Arts

Friday was a frantic afternoon for the women of the All About Me group – the women presented their new film at the Central Halls in Tollcross before getting back across town to screen the film again and launch an exhibition of photographs and memorabilia at North Edinburgh Arts. The events were the latest efforts to publicise the dreadful impact changes to the benefits system are having on families.

The exhibition highlights the actions taken by the group to support friends faced with losing their homes

None of the young women had any experience of political campaigning but over the last six months the women have:

  • Met with politicians and community activists to highlight their plight
  • Protested at council meetings
  • Staged peaceful protests at the North Local Office
  • ‘Occupied’ Scottish Tory leader Ruth Davidson MSP’s constituency office
  • Made a film with filmmaker George Williamson which eloquenty tells their story and the journey so far.

While the group has won some small victories, another local family lost their home last week. The women are determined: the fight goes on.

See the exhibition at North Edinburgh Arts.