social security – Page 2 – The NEN

Ofgem: Energy price cap to increase by £693 from April

“We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet”

Record increase in global gas prices sees energy price cap rise of 54%
Ofgem knows this rise will be extremely worrying for many people
Customers struggling to pay their energy bill should contact their supplier to access the help available

The energy price cap will increase from 1 April for approximately 22 million customers. Those on default tariffs paying by direct debit will see an increase of £693 from £1,277 to £1,971 per year (difference due to rounding). Prepayment customers will see an increase of £708 from £1,309 to £2,017.

The increase is driven by a record rise in global gas prices over the last 6 months, with wholesale prices quadrupling in the last year.

It will affect default tariff customers who haven’t switched to a fixed deal and those who remain with their new supplier after their previous supplier exited the market.

The price cap is updated twice a year and tracks wholesale energy and other costs.

It stops energy companies from making excessive profits, ensuring customers pay no more than a fair price for their energy.

The price cap allows energy companies to pass on all reasonable costs to customers, including increases in the cost of buying gas.

Since the price cap was last updated in August, the current level does not reflect the unprecedented record rise in gas prices which has since taken place.

Under the price cap mechanism, energy companies will be allowed to pass on these higher costs from April when the new level takes effect.

This is because energy companies cannot afford to supply electricity and gas to their customers for less than they have paid for it.

Over the last year, 29 energy companies have exited the market or been put in special administration in the wake of soaring global gas prices, affecting around 4.3 million domestic customers.

Jonathan Brearley, chief executive of Ofgem, said: “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.

“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.

“Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.”

Ofgem will tomorrow announce further measures to help the energy market weather future volatility by increasing financial resilience and have the flexibility to respond so that risks are not inappropriately passed on to consumers.

This follows measures announced in December.

The further measures include enabling Ofgem to update the price cap more frequently than once every 6 months in exceptional circumstances to ensure that it still reflects the true cost of supplying energy.

Help available for customers:

If customers are struggling to pay for energy bills, they should contact their energy supplier as soon as possible. Depending on their circumstances, customers may be eligible for extra help with their energy bills or services, such as debt repayment plans, payment breaks, emergency credit for prepayment metered customers, priority support and schemes like the Winter Fuel Payment or Warm Home Discount rebate.
Breathing Space Scheme: This is a scheme to give households time to receive debt advice and find a solution to sort out their debt problems. Breathing space will last for 60 days as long as applicants remain eligible during which time all creditors who have been included will be informed and must stop any collection or enforcement activity. Once the breathing space ends, creditors will be able to collect the debt in the usual way. Call the National Debtline on Freephone 0808 808 4000 or visit www.nationaldebtline.org
The Citizens Advice consumer service can provide advice on how customers can resolve problems with their energy provider. You can contact Citizens Advice via webchat, or by calling 0808 223 1133. For complex or urgent cases, or if a person is in a vulnerable situation, they may then be referred onto the Extra Help Unit.

2. Ofgem will announce further measures tomorrow including:

Introducing an uplift in the wholesale cost allowance in the price cap: after reviewing the evidence, Ofgem has decided that the existing price cap methodology did not appropriately account for the additional wholesale energy costs energy companies have incurred during the current price cap period following the unprecedented scale of wholesale energy prices and volatility. This adjustment represents less than 10% of the overall price cap increase.
Changing licence conditions to give Ofgem the more flexibility to change the price cap level if needed in between the regular six-monthly cap updates: Ofgem has set ourselves five tests which mean we will only expect to use the power in exceptional circumstances.
Further reforms to the price cap from October: In December we set out three options to make the price cap more robust to high and volatile wholesale energy costs while preserving as far as possible the benefits of the price cap for consumers. The consultation published tomorrow will include all three options, with quarterly updates as our preferred option

Breakdown of costs in the energy price cap

Dual fuel customer paying by direct debit, typical energy use (GB £)

*Network costs: The main driver of this increase is the recovery of Supplier of Last Resort (SoLR) levy costs (£68). A supplier acting as a SoLR can make a claim for any reasonable additional, otherwise unrecoverable, costs they incur. These levy claims are paid to energy companies by the distribution network companies and recovered from consumers via their charges.

5. The charts below show the wholesale prices that are used to determine the wholesale cost allowance within the price cap from spring 2018 ahead of the introduction of the price cap in January 2019.

Wholesale costs make up the majority of a customer’s bill. An efficient supplier will purchase energy for their customers on the wholesale market in advance of when they need to supply that energy.

This purchasing strategy is reflected in how the wholesale allowance is calculated within the price cap. We observe the forward-looking energy contracts that energy companies typically purchase over time and combine these to determine the wholesale cost allowance within the price cap.

We do this twice a year when we update the price cap in August for the winter period (October – March) and in February for the summer period (April – September) based on the price of these forward-looking energy contracts over the previous six months.

The fixed horizontal line shows the average wholesale cost allowance for each 6 month price cap period based on the price of the relevant forward looking energy contracts (the jagged line).

The recent spike in the prices of relevant forward looking energy contracts over the last 6 months can be clearly seen. The scale and pace of wholesale price increases has resulted in a big increase in the wholesale cost allowance for the price cap level for summer 2022.

Wholesale gas price costs in the energy price cap

Pence per therm

Wholesale electricity price costs in the energy price cap

Pounds per megawatt hour

Data sets behind these graphs are proprietary and can be sourced from ICIS.

Chancellor’s statement – Energy Price Cap

Statement, as delivered by Chancellor Rishi Sunak, on 3 February 2022:

Mr Speaker,

The UK’s economic recovery has been quicker and stronger than forecast.

In the depths of the pandemic, our economy was expected to return to its pre-crisis level at the end of 2022.

Instead, it got there in November 2021 – a full year earlier.

Unemployment was expected to peak at nearly 12%.

Instead, it peaked at 5.2% and has now fallen to just over 4% – saving more than 2 million jobs.

And with the fastest growing economy in the G7 this year…

Over 400,000 more people on payrolls than before the pandemic…

And business investment rising…it’s no wonder Mr Speaker, that borrowing is set to fall from £320bn last year …

… the highest ever peacetime level …

… to £46bn by the end of this Parliament.

As we emerge from the depths of the worst recession in 300 years, we should be proud of our economic record.

The economy is stronger because of the plan we put in place; because of the actions we took to protect families and businesses.

And that plan is working.

But for all the progress we are making – the job is not yet done.

Right now, I know the number one issue on people’s minds is the rising cost of living.

It is the independent Bank of England’s role to deliver low and stable inflation – and the Governor will set out their latest judgements at midday today.

And just as the government stood behind the British people through the pandemic…

… so we will help people deal with one of the biggest costs they now face – energy.

The energy regulator, OFGEM, announced this morning that the energy price cap will rise in April to £1,971 – an increase of £693 for the average household. Without government action, this would be incredibly tough for millions of hardworking families. So the government is going to step in to directly help people manage those extra costs.

Mr Speaker,

Before I set out the steps we are taking, let me explain what’s happening to energy prices, and why.

People’s energy bills are rising because it is more expensive for the companies who supply our energy to buy oil, coal, and gas.

Of the £693 increase in the April price cap, around 80% comes from wholesale energy prices.

Over the last year, the price of gas alone has quadrupled.

And because over 85% of homes in Britain are heated with a gas boiler, and around 40% of our electricity comes from gas, this is hitting households hard.

The reasons gas prices are soaring are global.

Across Europe and Asia, a long, cold winter last year depleted gas stores.

Disruption to other energy sources like nuclear and wind left us relying more than usual on gas during the summer months.

Surging demand in the world’s manufacturing centres in Asia…

… at the same time as countries like China are moving away from coal…

… is further increasing demand for gas.

And concerns about a possible Russian incursion into Ukraine are putting further pressure on wholesale gas markets.

And so prices are rising.

Mr Speaker,

The price cap has meant that the impact of soaring gas prices has so far fallen mainly on energy companies.

So much so, that some suppliers who couldn’t afford to meet those extra costs have gone out of business as a result.

It is not sustainable to keep holding the price of energy artificially low.

For me to stand here and pretend we don’t have to adjust to paying higher prices would be wrong and dishonest. But what we can do is take the sting out of a significant price shock for millions of families … by making sure the increase in prices is smaller initially and spread over a longer period.

Mr Speaker,

Without government intervention, the increase in the price cap would leave the average household having to find an extra £693.

The actions I’m announcing today will provide, to the vast majority of households, just over half that amount – £350.

In total, the government is going to help around 28 million households this year.

Taken together, this is a plan to help with the cost of living worth around £9bn.

We’re delivering that support in three different ways.

First, we will spread the worst of the extra costs of this year’s energy price shock over time.

This year, all domestic electricity customers will receive an upfront discount on their bills worth £200.

Energy suppliers will apply the discount on people’s bills from October.

With the government meeting the cost in full.

That discount will be automatically repaid from people’s bills in equal £40 instalments over the next five years.

This is the right way to support people while staying on track with our plans to repair the public finances.

And because we are taking a fiscally responsible approach, we can also provide more help, faster, to those who need it most – the second part of our plan.

We’re going to give people a £150 Council Tax rebate to help with the cost of energy, in April – and this discount won’t need to be repaid.

And I do want to be clear with the House that we are deliberately not just giving support to people on benefits.

Lots of people on middle incomes are struggling right now, too – so I’ve decided to provide the council tax rebate to households in Bands A to D.

This means around 80% of all homes in England will benefit.

And the third part of our plan will provide local authorities with a discretionary fund of nearly £150m…

… to help those lower income households who happen to live in higher Council Tax properties…

… and households in bands A-D who are exempt from Council Tax.

We’re also confirming today that we’ll go ahead with existing plans to expand eligibility for the Warm Home Discount by almost a third…

… so that 3m vulnerable households will now benefit from that scheme.

And that’s not all we’re doing to help vulnerable households.

We’re providing £3bn over this Parliament to help more than half a million lower income homes become more energy efficient, saving them on average £290 per year.

Increasing the National Living Wage to £9.50 an hour in April, a pay rise of over £1,000 for 2 million low paid workers.

And providing an effective tax cut for those on Universal Credit, allowing almost 2 million households to keep an average of £1,000 per year.

The payment through energy suppliers will apply across England, Wales and Scotland.

Energy policy is devolved in Northern Ireland, with a different regulator, and the government does not have the legal powers to intervene.

So we will make sure the Executive is funded to do something similar, with around £150m for Northern Ireland through the Barnett formula next year.

And because the Council Tax system is England only, total Barnett consequentials of around £565m will be provided to the devolved administrations in the usual way.

Mr Speaker,

I know that some in this House have argued for a VAT cut on energy.

However, that policy would disproportionately benefit wealthier households.

There would also be no guarantee that suppliers would pass on the discounts to all customers.

And we should be honest with ourselves: this would become a permanent Government subsidy on everyone’s bills.

A permanent subsidy worth £2.5 billion every year – at a time when we are trying to rebuild the public finances.

Instead, our plan allows us to provide more generous support, faster, to those who need it most, providing 28m households with at least £200, and the vast majority receiving £350.

It is fair, it is targeted, it is proportionate – it is the right way to help people with the spike in energy costs.

Mr Speaker,

Today’s announcements are just one part of the government’s plan to tackle this country’s most pressing economic challenges.

A plan for growth – with record investments in infrastructure, innovation and skills.

A plan to restore the public finances – with debt falling by the end of this Parliament.

A plan to cut waiting lists and back the NHS with £29bn over three years and a permanent new source of funding.

And, with the measures I’ve announced today – a plan to help with the rising cost of energy with £350 more in the pockets of tens of millions of hard working families.

That’s our plan to build a stronger economy – not just today but for the long term.

And I commend it to this House.

Commenting on the energy cap rise, interest rate rise and the Chancellor’s measures to address the cost of living crisis, TUC General Secretary Frances O’Grady said: “The Chancellor’s announcement is hopelessly inadequate. For most families it’s just £7 a week and more than half must be paid back.

“It’s too little, it’s poorly targeted, and it’s stop gap measures instead of fixing the big problems.

“Britain needs a pay rise. The best way to help families is to get wages growing again. But this government has no plan to end pay misery.

“Ministers should be getting urgent help to families that need it most through raising universal credit. And we need a windfall tax on the excessive profits from North Sea gas to cut bills and boost investment in affordable energy.”

Responding to today’s announcements on energy costs and the cost of living, Katie Schmuecker, Deputy Director of Policy and Partnerships for the independent Joseph Rowntree Foundation said: “The Chancellor has offered cold comfort to families in poverty, who are already rationing what they can spend on essentials such as heating and food.

“These families are now expected to find at least half of the eye watering increases in energy bills, when many are already getting into debt to keep their houses warm and food on the table.

“Three quarters of those who can claim the enhanced support are not in poverty. Meanwhile inflation is set to rise at more than double the rate of benefits. This support will not get people through the next few months and it will not protect those most at risk of hardship.

“People in poverty are hit hardest by all these pressures because our social security system is simply not offering adequate support, and until that changes they will continue to be exposed to every economic shock.

“The Chancellor has made his choice, the harder choices will now be coming for those who still can’t afford essentials for themselves and their families.”

University of Birmingham’s Harriet Thomson on the rise of energy price caps: “This news comes at a time when families across Great Britain have already been facing years of rapidly increasing energy prices, as well as chaotic energy market conditions with the collapse of around 20 energy supplies since January 2021 alone.

“Just last month, ONS data found that 2 in 3 adults said their costs of living had gone up in the past month, with 79% of those attributing blame to gas and electricity prices.

“We know from the extensive body of existing evidence on this topic that lower income households will be disproportionately hit by the price cap increase, risking pushing millions more into a situation fuel poverty.

“This will have serious consequences for physical and mental health, social isolation, and educational attainment, with households forced to make difficult everyday decisions over whether to ‘heat or eat’.

“Moreover, these price increases are likely to push more people into using risky and/or polluting alternative energy sources, such as DIY candle heaters that have been linked to house fires, burning scrap wood and other flammable materials, and digging up peat. As well as the obvious risks to human life, these approaches will also exacerbate climate change.

“It’s clear that energy companies are reeling from the potent combination of cash flow reductions due to pandemic-related economic pressures on families who are building up more energy debt, and the global gas crisis.

“But the answer is not to burden households with yet more costs. The energy market is broken and needs radical reform – now is the time for the UK government to show ambition and commitment to the nation by investing in deep retrofits of our old and leaky housing stock, and to rollout decentralised renewable energy systems at scale.”

New independent advocacy service for disabled people opens

Disabled people are now able to access a new advocacy service to get help applying for Scottish social security benefits.

The support is available to disabled people applying for any of Social Security Scotland’s current and future benefits including Child Disability Payment and Adult Disability Payment.

It also covers advocacy support for disabled people to access payments for families with children, people who need help to pay for a funeral, carers and young people entering the workplace.

This service will be delivered by the charity VoiceAbility and is entirely independent of the Scottish Government and Social Security Scotland.

The Scottish Government has committed up to £20.4 million over the next four years to the provision of the new Independent Advocacy Service.

To enable them to deliver this service, VoiceAbility will create up to 100 new advocacy jobs across the country over the next four years, with a head office and dedicated training centre in Glasgow.

Minister for Social Security Ben Macpherson said: “Accessing social security is a human right and we have an obligation to do what we can to make sure disabled people are able to get the help they need to access financial support they are entitled to.

“This is why we are investing in an independent and free advocacy service for disabled people who need support to engage with us. This new service will help disabled people be aware of their rights, express themselves and feel understood when applying for Scottish social security benefits.

“The service, which is unique to Scotland, is just one of the ways that we’ve responded to what people have told us they want from our new social security system. It is all part of our work to make sure people applying for benefits have a positive experience and find it straightforward and simple no matter what their individual circumstances are.

“Our system is designed to adapt to an individual’s needs rather than expecting them to adapt to access it and we start from a position of trust. I am delighted this new independent service is available to disabled people, it highlights how we are ensuring our social security system is based on dignity, fairness and respect.”

Chief Executive of VoiceAbility Jonathan Senker said: “We are proud to have established a new base in Scotland to provide this Independent Advocacy Service. Our team of skilled advocates will cover the length and breadth of Scotland to provide bespoke support to disabled people to apply for benefits from Social Security Scotland.

“The advocacy we provide will support disabled people to make sure their voices are heard when it matters most and will mean that more people know and understand their rights when applying for Social Security Scotland benefits. We are excited about the difference this service will make to disabled people.”

VoiceAbility is a charity with 40 years’ experience in delivering independent advocacy services
the service will provide free and independent advocacy to anyone who identifies as disabled and requires support to communicate. This may include people with a sensory disability, mental health condition or learning disability
people can access this support by contacting VoiceAbility directly for free on 0300 303 1660 or by visiting voiceability.org
people can also access this support by calling Social Security Scotland for free on 0800 182 2222 and asking to be referred to the Independent Advocacy Service.

Inflation: At least 100,000 more people at risk of being pulled deeper into poverty

Families on low incomes are facing a worrying winter ahead as today’s figures show inflation has hit 5.1%. The rising cost of utilities are especially challenging given they take up such a large share of low-income families’ budgets.

The Government recently announced that benefits will be uprated by 3.1% in April which will close some of the growing gap between people’s incomes and their costs. However, this does not address the immediate hardship families are experiencing this winter.

In October, the Office for Budget Responsibility projected inflation to peak at 4.4% by April but today’s 5.1% exceeds that level.

New JRF analysis based on OBR forecasts shows that should inflation be 4.4% by next April:

Around 100,000 individuals are at risk of falling into deep poverty (below 50% of median income after housing costs) due to benefit uprating being less than inflation in April
Around 7 in 10 of whom live in households that contain children
Around half live in working households

Given today’s high inflation figures, this could be an underestimate and even more individuals may be at risk of deep poverty.

The outlook is especially stark for people who are out of work and reliant on social security to make ends meet. These families have already experienced a £20-a-week cut to Universal Credit. This also comes after a decade of cuts and freezes to social security which has left the system wholly unable to provide the support millions of people need.

Katie Schmuecker, Deputy Director of Policy & Partnerships at the Joseph Rowntree Foundation, said: “It is deeply concerning that families on low incomes, who are already struggling to make their budgets stretch, are at risk of being pulled deeper into poverty. Prices are rising sharply and support available to people is inadequate.

“Everyone in our country should be able to afford the basics yet there is no sign of any respite on the horizon for families struggling to keep their heads above water. Too many people who are being hit by rising energy bills and increasing food prices are forced to ask themselves what essentials they will go without this winter.

“In a country like ours, social security should, at a bare minimum, enable people to meet their needs with dignity. Unless the Government urgently strengthens support, we will see more and more people being pulled deeper into poverty and debt in the months ahead. This is not only harmful but also completely avoidable.”

Maximising incomes and increasing access to benefits

Ensuring social security benefits are accessible to all who are eligible will be vital in helping people on low incomes deal with the aftermath of the pandemic, Social Justice Secretary Shona Robison has said.

Scotland’s new benefit take-up strategy outlines plans to make sure that nobody misses out on financial support due to a lack of awareness or barriers to applying.

Actions from the strategy, which builds on learning from the first in 2019, include:

working with partners to improve targeting of information and advice
challenging myths and stigma around claiming benefits
continuing to remove barriers to accessing social security in Scotland

The Scottish Government will also explore the introduction of automatic payment for certain devolved social security benefits to make it as easy as possible for people to maximise their incomes.

Ms Robison said: “Social security is a collective investment in building a better and fairer society and part of that is ensuring people are aware of, and can access, the financial support to which they are entitled.

“The pandemic has made us even more aware of the importance of a strong social security safety net – alongside skills, employment and childcare support – and our new benefit take-up strategy sets out how we will ensure we reach those in need.

“We have seen good levels of take up of the Scottish Child Payment and Best Start Payments, which support families on low incomes, with initial estimates ranging between 77% and 84%. As part of our national mission to tackle poverty we are determined that everybody should be able to access payments they are due.

“We will invest £10 million over this Parliament to increase advice services with a focus on providing these in accessible settings and targeting families.

“This investment will support our ambition to maximise incomes, tackle poverty and improve wellbeing, and this will be more vital than ever as we continue our recovery from COVID-19.”

The 2021 Benefit Take Up Strategy builds on learning from the first strategy, published in 2019.

Biggest ever overnight cut to social security “makes a mockery of levelling up”

This morning, around 5.5 million families across the United Kingdom are waking up £1,040-a-year worse off due to the Prime Minister imposing the biggest ever overnight cut to social security.

Despite fierce opposition from across the political spectrum, his government has pressed ahead with this controversial cut which will cause immense, immediate and avoidable hardship.

As the cut comes into effect today, the Prime Minister must face the five most serious consequences of his cut:

Half a million more people pulled into poverty, including 200,000 children.
Makes social security wholly inadequate by reducing the main rate of out-of-work support to its lowest level in real terms since around 1990 and its lowest ever level as a proportion of average earnings.
Around 20% of all working-age families across the UK have lost £1,040 a year. 6 in 10 single parent families will be affected by this cut.
1.7 million people who will experience this cut to Universal Credit are unable to work – due to caring for others, disability, or illness – a promise of higher wages will do nothing to help them.
The cut takes £6 billion of spending power out of local economies. The cut has the most severe impact in Yorkshire and the Humber, the North East, North West and West Midlands, although no region will be left unscathed.

Helen Barnard, Deputy Director of the Joseph Rowntree Foundation, said: “Today the Prime Minister has imposed the biggest ever overnight cut to social security. It makes a mockery of his mission to level up.

“Despite overwhelming opposition, he is ploughing ahead with a cut which fundamentally undermines the adequacy of our vital social security system as we face a cost-of-living crisis. This is not building back better, it’s repeating the same mistakes made after the last financial crisis.

“The Government says a key test of levelling up is improving living standards, yet they have just made around 5.5 million low-income families £1,040 a year worse off. People’s bills won’t get £87-a-month cheaper from today, in fact they are going up. Ministers’ arguments in recent days beg the question: has the party that created Universal Credit forgotten the purpose of the system?

“The Prime Minister is abandoning millions to hunger and hardship with his eyes wide open. Low-income families urgently need him to reinstate this vital lifeline.”

Participants in the Covid Realities project responding to the Prime Minister’s comments on the eve of the cut:

“My husband has been in his job for 25 years +, he hasn’t received a pay rise in 5 years and has recently been told there’s no way he will get one anytime soon.

So I’m sorry but there’s no fix there for us. Once again the only option is to struggle and I’m tired of it.” – Emma, England, Covid Realities

“He has no idea how tough it is and how hard people are working to make ends meet!

It is sickness inducing that he completely misses the point that families will either be cold or hungry due to this cut.” – Kim, Wales, Covid Realities

“Fuel and food is on the increase and … families on a low income cannot afford to absorb these costs.

“It is short-sighted to not think of the long term costs involved when already impoverished working families cannot sustain themselves.” – Aurora, England, Covid Realities

“So our prime minister has said he knows it is tough for people on low incomes, does he honestly? … How as parents can we support our children when we are going without food, hungry and unable to concentrate and even sleep at night with worry and stress, do you really understand?

… I would invite any MP to come and actually experience the day to day drain of living on low income and the impact that has on our mental and physical wellbeing.” – Caroline, Northern Ireland, Covid Realities

Political consequences:

413 parliamentary constituencies across Great Britain will see over a third of working-age families with children hit by the planned £1,040-a-year cut to Universal Credit and Working Tax Credit.
- Of these 413 constituencies, 191 are Conservative – 53 of which were newly won at the last general election or in a subsequent by-election.
In 35 local authorities across Great Britain, 50% or more of working-age families with children will be impacted by the planned cut.

“THE NASTY PARTY IS WELL AND TRULY BACK”

Edinburgh Pentlands SNP MSP Gordon MacDonald has condemned the £20 a week cut to Universal Credit, which comes into force today. The First Minister of Scotland, the First Minister of Wales and the First Minister of Northern Ireland have also condemned the measure.

The previous week, the Scottish Parliament voted overwhelming to support cancelling the Tory UK Government’s planned £20 a week cut to Universal Credit.

Gordon MacDonald also raised the matter with the Cabinet Secretary for Social Justice, Housing and Local Government, Shona Robison seeking information on what representations the Scottish Government has made to the UK Government.

Ms Robison confirmed that the Scottish Government had written to the UK Government on eight separate occasions since March 2020 to ask it to retain the much-needed £20 uplift. In addition on 30 August, Ms Robison joined colleagues from Wales and Northern Ireland to write to the UK Government to urge it to retain the uplift. They are yet to receive a response.

SNP MSP Gordon Macdonald for Edinburgh Pentlands said: “The Scottish Parliament overwhelmingly spoke and demanded the Tory UK Government halts their plans to scrap the uplift to Universal Credit.

“Sadly, we also witnessed every single Tory MSP failing to stand up to their Westminster bosses in opposing the £20 a week cut – the biggest welfare cut since the 1930s at the worst possible time. Even former Scottish Tory leader, Ruth Davidson and six former Tory DWP Secretary of States, opposed the cut.

“I am standing up for the 32,022 households impacted across Edinburgh, but the Tory Government at Westminster has now implemented their plans that will rip more than £1,000 a year out of the hands of the most vulnerable at a time when they need it most.

“I am quite frankly shocked, but not surprised, that the Scottish Tory MSPs not only voted to back the Universal Credit cut which will condemn thousands of families to poverty, but actively defended it – the Nasty Party is well and truly back.

“History will remember them for this – Scottish Tory MSPs are letting down thousands of families and children with this callous cut in favour of propping up their Tory chums in the UK Government who are imposing these policies on the people of Scotland.

“This demonstrates once again how the people of Scotland cannot afford to continue to suffer under Westminster control. We need to have the option of choosing a different path in a referendum which can give us the full powers of independence where we can build a fairer Scotland.”

JRF: The Chancellor may say he has a plan for jobs – but he has no plan for paying the bills

Chancellor of the Exchequer Rishi Sunak made the keynote speech at the Conservative Party conference in Manchester yesterday. On the week the Tories will cut the £20 Universal Credit lifeline, the Chancellor told the conference:

Whatever it takes.

That phrase, and those press conferences, were my introduction to so many of you as Chancellor.

It was daunting to face such a challenge in my first days in office. And what it also meant is that more than a year has gone by before I had the chance to meet you all properly. And that is why these last few days have been such a joy. Meeting you all face to face and hearing so many of you say to me “Wow, you’re even shorter in real life!”

Nothing can ever prepare you to become Chancellor, especially in recent times. There have been occasions where it really did feel that the world was collapsing. In those moments, there are certain things I fell back on. Yes, my family. Yes, my colleagues. Yes, my tremendous Treasury team.

And yes, the person who made all this possible, the person who delivered a thumping Conservative majority, my friend, our leader, the country’s Prime Minister, Boris Johnson.

But the other thing I fell back on is something we all have in this room. Our values. Our Conservative values.

I believe in some straightforward things.

I believe that mindless ideology is dangerous. I’m a pragmatist. I care about what works, not about the purity of any dogma. I believe in fiscal responsibility. Just borrowing more money and stacking up bills for future generations to pay, is not just economically irresponsible. It’s immoral.

Because it’s not the state’s money. It’s your money.

I believe that the only sustainable route out of poverty comes from having a good job. It’s not just the pounds it puts in your pockets. It’s the sense of worth and self-confidence it gives you. So I will do whatever I can to protect people’s livelihoods, and create new opportunities too.

And when it comes to those new opportunities, I am very much a child of my time. I spent the formative years of my career working around technology companies in California. And I believe the world is at the beginning of a new age of technological progress which can transform jobs, wealth, and transformed lives.

So: pragmatism. Fiscal responsibility. A belief in work. And an unshakeable optimism about the future. This is who I am. This is what I stand for. This is what it will take. And we will do whatever it takes.

‍Our Plan is Working

And there can be no prosperous future unless it is built on the foundation of strong public finances.

And I have to be blunt with you. Our recovery comes with a cost.

Our national debt is almost 100% of GDP – so we need to fix our public finances. Because strong public finances don’t happen by accident. They are a deliberate choice. They are a legacy for future generations. And a safeguard against future threats.

I’m grateful, and we should all be grateful to my predecessors and their 10 years of sound Conservative management of our economy. They believed in fiscal responsibility. I believe in fiscal responsibility. And everyone in this hall does too.

And whilst I know tax rises are unpopular. Some will even say un-Conservative. I’ll tell you what IS un-Conservative.

Unfunded pledges.

Reckless borrowing.

And soaring debt.

Anyone who tells you that you can borrow more today, and tomorrow will simply sort itself out just doesn’t care about the future.

Yes, I want tax cuts. But in order to do that, our public finances must be put back on a sustainable footing.

Labour’s track record on the public finances speaks for itself.

Since 2010, we’ve had 5 Labour Leaders, 7 Shadow Chancellors and innumerable spending pledges. And in all that time they still haven’t got the message. The British people won’t trust a Party that isn’t serious with their money. That’s why they vote Conservative.

We must never forget that the fundamental economic differences between us and Labour run very deep.

Differences not just about debt and borrowing but about how to deal with the real pressures people face in their lives.

And right now, we are facing challenges to supply chains not just here but right around the world and we are determined to tackle them head on.

But tackling the cost of living isn’t just a political sound bite. It’s one of the central missions of this Conservative government.

Picture this: you’re a young family. You work hard, saving a bit each month. But it’s tough.

You have ambitions for your careers for your children.

You want to give them the best more than you had.

Now you tell me: Is the answer to their hopes and dreams, just to increase their benefits?

Is the answer to tell that young family the economic system is rigged against you, and the only way you stand a chance is to lean ever more on the state?

Be in no doubt, that is the essence of the Labour answer.

Not only does Labour’s approach not work in practice. It is a desperately sad vision for our future.

But there is an alternative. An approach focused on good work, better skills, and higher wages.

An approach that says: ‘Yes, we believe in you. We will help you. And you will succeed.”

And better still, it’s more than words. It’s a plan in action. A Conservative plan and Conference it is working.

We’re giving people the means and opportunities to help themselves

Governments rarely get to set the tests by which they will ultimately be judged.

And our test is jobs.

Remember, as economies around the world pulled the shutters down, forecasters were predicting unemployment to reach 12%. Millions of people were on the precipice of losing their jobs, their livelihoods, and their homes.

Well, the forecasts were wrong.

The unemployment rate is at less than 5% and falling. That’s lower than France, America, Canada, Italy, and Spain.

And we now have one of the fastest recoveries of any major economy in the world.

Now it wasn’t that the forecasters had bad models No. It’s just their models did not take account of one thing – and that was this Conservative Government. Our will to act and our plan to deliver.

An increased national living wage. The restart programme. Sector based work academies. Doubling work coaches. Job finding support. Traineeships. Apprenticeship incentives. Skills Bootcamps. And the Prime Minister’s Lifetime Skills Guarantee.

All things we are doing that won’t just help people but will give them the means and opportunities to help themselves. ‍

Our plan for the future

I believe in good work, better skills, and higher wages.

I believe that every person in this country has the potential to become something greater.

And I know that we, and only we, the Conservative party, are the ones who can make that happen.

And our economy cannot be what we need it to be without the courage, creativity and sheer force of will that each new generation brings.

Yet, at its peak just under 1 in 3 workers under 25 were on furlough. One in three.

That’s one million people who didn’t have the fall back of a career history or a network of contacts, and in many cases hadn’t even moved into their first job.

And so what did we do? We created the Kickstart scheme, up running and working in a matter of months. A landmark programme that is helping young people start exciting new careers.

And thanks to our plan, young people, just like John Chihoro who introduced me today, are starting those new jobs in their thousands.

So to give more young people the same chance as John, I can confirm we are expanding our successful Plan for Jobs into next year.

The Kickstart scheme extra support through the Youth Offer, the Job Entry Targeted Support scheme, and our Apprenticeship Incentives. All extended because we believe in the awesome power of opportunity.

And we are going to make sure that no young person in our country is left without it.

But what we do today means little if we don’t also have a plan for tomorrow.

A plan for the future.

A future economy shaped by the forces of science, technology, and imagination.

The years I spent in California left a lasting mark on me, working with some of the most innovative and exciting people in finance and technology. Watching ideas becoming a reality. Seeing entrepreneurs build new teams.

It’s not just about money.

I saw a culture, a mindset which was unafraid to challenge itself, reward hard work, and was open to all those with the talent to achieve.

The future is here

I look across the United Kingdom and that culture is here too in the young people I’ve already spoken about today, unencumbered by timidity and orthodoxy.

And it’s there in our willingness to take risks not just on companies, but on people.

People with the raw potential to create a wave of the most dynamic high growth companies. A wave that will reach the farthest corners of the world.

That optimism, that unshakeable belief that the future, can be different and better was also at the heart of Brexit.

I remember over five years ago being told that if I backed Brexit my political career would be over before it had even begun.

Well, I put my principles first. And I always will.

I was proud to back Brexit. Proud to back Leave.

And that’s because despite the challenges in the long term, I believed the agility flexibility and freedom provided by Brexit would be more valuable in a 21st century global economy than just proximity to a market.

That in the long term a renewed culture of enterprise willingness to take risks and be imaginative would inspire changes in the way we do things at home.

Brexit was never just about the things we couldn’t do. It was also about the things we didn’t do.

That’s why we introduced the super deduction, a UK first in tax policy which is triggering an explosion in capital investment.

That’s why we created the Help to Grow scheme another UK first to help small and medium sized companies digitize skill up and scale up.

That’s why we launched the Future Fund another UK first in government investment backing high potential start-ups.

My point is this: even if you can’t see it yet, I assure you, the future is here.‍

Now is the time to turn to the future

Last year alone the UK attracted more venture capital investment to our startups than France and Germany combined.

And along with enhanced infrastructure and improved skills, we are going to make this country not just a Science Superpower, not just the best place in the world to do business… I believe we’re going to make the United Kingdom the most exciting place on the planet.

Take Artificial Intelligence. Once the stuff of science fiction. Now it’s reality – and we’re a global leader.

The steam engine kicked off the industrial revolution. Computers delivered automation. The internet brought information exchange.

And as the latest general-purpose technology, AI has the potential to transform whole economies and societies.

If Artificial Intelligence were to contribute just the average productivity increase of those three technologies, that would be worth around £200 billion a year to our economy.

And so today, I am announcing that we will create 2,000 elite AI scholarships for disadvantaged young people and double the number of Turing AI World-Leading Research Fellows, helping to ensure that the most exciting industries and opportunities are open to all parts of our society.

New policy, focused on innovative technology, supporting jobs for the next generation, a sign of our ambition for the future.

Because that’s why we are here. All of us. That’s why we became members of the Conservative party.

That’s why you all give up so much of your time sacrificing things that are important to you in order to help build a better future.

You know, the longer I spend in this job, the more I realise that the worst parts of politics are driven by fear. Fear of change. Fear of losing. The fear of being wrong. Even fear of the future.

And when people get scared they create divisions. They say: “you’re either with us or you’re with them.” But you cannot make progress if you’re pitting people against each other.

That’s what you get from a tired, fearful sort of politics. We saw it last week in Brighton.

It’s not just that Labour don’t like us. They don’t even like each other.

Whereas we, the Conservatives, are now and always will be the party of business and the party of the worker.

The party of the private sector and the public sector.

A party for the old and the young.

The British people want a party that can get things done.

So, at just the moment when it feels like we’ve done enough, that we’ve gotten through, that we can take a rest, we must not stop.

Now is the time to show them that our plan will deliver.

And now is the time, at last, at long last, to finally turn to the future.

Thank you.

Responding to the Chancellor’s speech at Conservative Party Conference, Helen Barnard, Deputy Director of the Joseph Rowntree Foundation, said: “The Chancellor may say he has a plan for jobs but he has no plan for paying the bills.

“He spoke of doing whatever it takes to protect people’s livelihoods, yet he is cutting the incomes of around 5.5 million families by £1,040 a year on Wednesday when we are facing a cost of living crisis.

“It is completely wrong to suggest there is a trade-off between good jobs and adequate social security when they are both essential to improving people’s living standards.”

“This cut will impact many working families and inadequate social security makes it harder for people to seize opportunities whilst they struggle to stay afloat. We must ensure people who are sick, disabled or caring for others and therefore unable to work can meet their needs with dignity.

“To impose the biggest ever overnight cut to social security would be economically irresponsible which is why it is so fiercely opposed from across the political spectrum. The Government can’t credibly claim to be levelling up while levelling down people’s incomes. He must abandon this cut.”

JRF issues stark warning on child poverty targets in key state of the nation report

“It is time for the Scottish Government to stop walking and start running”

The Scottish Government must take urgent action to avoid missing its own child poverty targets by a significant margin, leaving families across the country locked in poverty. The cut to Universal Credit by the UK Government in just two days’ time makes the task more urgent.

Kicking off Challenge Poverty Week with its annual state of the nation report, Poverty in Scotland 2021, the Joseph Rowntree Foundation (JRF) paints a picture of poverty levels in Scotland just before the Covid-19 pandemic.

It highlights a failure to make inroads into the significant levels of poverty among the priority groups for action as identified by the Scottish Government, including families from an ethnic minority background, families where someone is disabled, those with a child under the age of one and single parent households.

Key findings for these groups include:

More than 80% of children in poverty are in one of these groups.
100,000 children in poverty in live in a household where someone is disabled – a shocking 40% of all children in poverty
Children from minority ethnic backgrounds make up 7% of the population yet make up 16% of all children in poverty
Children in two or more priority groups have a much higher poverty rate (36%) than those in one priority group (25%) and nearly three times that of those in no priority group (13%).

These figures are pre-Covid 19, and much evidence has highlighted the unequal impact the pandemic has had on many of these groups, meaning their current situations could be much worse. This lays bare scale of the challenge facing the Scottish Government if it is to meet its targets and makes clear the need for targeted action to support these groups.

The report was produced alongside the End Poverty Scotland Group, an advisory group of people from across Scotland with first-hand experience of living on a low income.

Alex, a member of the advisory group said: ‘If over 80% of children in poverty are still in one of the priority groups, how much of a priority are we, really?’

The findings also highlight the importance of full-time work in reducing poverty in Scotland. 54% of people who are in families where no one is working are in poverty. People in families where someone is working part-time have a poverty rate of 30% while the poverty rate for people in families where at least one person is in full-time work is 10%.

The desire and need to work was a strong theme from the advisory group, but the inflexibility of childcare provision was highlighted as a consistent barrier. The group expressed deep frustration that in most cases people were trying to create a better life for them and their families, but success was often despite the system rather than because of it.

The report urges both the Scottish and UK Governments to increase the adequacy of social security in order to drive down poverty levels.

JRF recommends that the Scottish Child Payment is doubled as soon as possible and that the upcoming Tackling Child Poverty Delivery Plan must set out a clear and measurable course towards meeting those targets. It must include a far greater scale and pace of activity to support families in the priority groups who are most at risk of poverty.

The UK Government’s cut to Universal Credit and Working Tax credit in just two days’ time will cut £1,040 per year from the incomes of 450,000 families in Scotland. This cut will increase poverty in Scotland across all groups, not just families with children.

The UK Government is responsible for 85% of social security spending in Scotland and the responsibility for the impact of this cut lies at their door. As well as reversing the cut, the report recommends reform of rules such as the five-week wait for the first payment of Universal Credit, and the two-child limit, which drive destitution and hardship in Scotland as they do in other parts of the UK.

Chris Birt, Associate Director of JRF in Scotland said: “The Scottish Government has rightly set a national mission to end child poverty and has put in place steps to move us in the right direction. But we are on course to miss our targets by some distance. Such a political failure would have a profound human cost – tens of thousands more children will experience childhoods blighted by hardship and anxiety.

“It is time for the Scottish Government to stop walking and start running, by immediately doubling the Scottish Child Payment and by significantly increasing the scale and pace of its programme to support families in priority groups. The forthcoming Budget and Tackling Child Poverty Delivery Plan will be crucial in putting us on a path to meeting our targets.

“All tiers of government must look at the design and cultures that underpin public services. The group of people on low incomes who co-authored the report are clear in the need for a more constructive approach underpinned by kindness and ease of use as well as more accountability to the people who use the systems.

“The responsibility for the cut to Universal Credit falls squarely at the UK Government’s door. It is a failure of both compassion and of policy. Its decision to impose the biggest overnight cut to social security in the history of our welfare state will cause immediate and widespread hardship in Scotland. With reserved powers, comes reserved responsibility.

“Our social security system should protect people from poverty, but the UK Government is instead choosing to condemn them to it.”

poverty_in_scotland_2021 Download

“Prime Minister is abandoning millions to hunger and hardship with his eyes wide open”

Joseph Rowntree Foundation issues a stark warning ahead of the cut to Universal Credit scheduled for 6 October – the same day as the Prime Minister’s speech at Conservative Party Conference.
New analysis looks at the impact of the Universal Credit cut by local authority.

On Wednesday, as the Prime Minister delivers his speech to the Conservative Party Conference, his government will be imposing the biggest ever overnight cut to social security. This will reduce the incomes of around 5.5 million families by £1,040 per year.

In the Greater Manchester Combined Authority area – the host city of this year’s Conservative Party Conference – around 312,000 working-age families (26%) are facing this historic cut to Universal Credit and Working Tax Credit.

If the Government presses ahead with the cut, it would:

Pull half a million people into poverty, including 200,000 children.
Fundamentally undermine the adequacy of our social security system at precisely the moment when families are facing considerable increases in the cost of their energy bills, prices on the shelves are going up and National Insurance is set to rise in April 2022.
Reduce the main rate of out-of-work support down to its lowest level in real terms since around 1990 and its lowest ever level as a proportion of average earnings.

The Government themselves have admitted this week that families may struggle to meet basic costs, like food and heating, by increasing the funding available for local authorities to give grants to families in emergency situations.

The support available through their newly announced Household Support Fund is temporary and discretionary and is typically reserved for one-off emergency situations such as a broken fridge. This scheme does not come close to meeting the scale of the challenge facing families.

Who will be impacted by the cut?

New analysis finds that in 35 local authorities across Great Britain 50% or more of working-age families with children will be impacted by the planned cut.

JRF has consistently warned that:

Working families make up around 60% of families who will be affected by the cut to Universal Credit and Working Tax Credit.
Families with children (particularly single-parent families), those containing someone who is disabled, and Black, Asian or Minority Ethnic (‘BAME’) families, will be disproportionately impacted by the reduction in Universal Credit or Working Tax Credit.
The cut will have the most severe impact in Yorkshire and the Humber, the North East, North West and West Midlands, although no region will be left unscathed by this decision.

Katie Schmuecker, Deputy Director of Policy & Partnerships at the Joseph Rowntree Foundation, said: “The Prime Minister is abandoning millions to hunger and hardship with his eyes wide open. The biggest ever overnight cut to social security flies in the face of the Government’s mission to unite and level up our country.

“When the increase to Universal Credit was introduced, the Chancellor said it was to “strengthen the safety net” – a tacit admission a decade of cuts and freezes had left our social security lifeline to wear thin and threadbare for families in and out of work relying on it. This planned cut would reverse the progress made and leave it wholly inadequate.

“People’s bills won’t get £87-a-month cheaper from Wednesday and families are already anxious about how they will get through a looming cost of living crisis. This decision is set to plunge half a million people into poverty and shows a total disregard for the consequences. The Prime Minister cannot say he has not been warned, he must abandon this cut.”

Table 1: Top 10 Labour and Conservative majority local authorities with the highest percentage of working-age families with children impacted by the cut

Top 10 Labour majority local authorities affected	Top 10 Conservative majority local authorities affected
Local Authority	% of all working-age families with children impacted by the cut	Local Authority	% of all working-age families with children impacted by the cut
Newham	64	Pendle	58
Leicester	62	Walsall	53
Manchester	61	Great Yarmouth	52
Bradford	61	North East Lincolnshire	50
Oldham	60	Southampton	49
Birmingham	60	East Lindsey	48
Blackburn with Darwen	58	Dover	45
Kingston upon Hull – City of	58	North Lincolnshire	44
Sandwell	58	South Holland	44
Tower Hamlets	58	Nuneaton and Bedworth	44

Of local authorities with no majority party, with the highest percentages of working-age families with children impacted by the planned cut, Middlesbrough (60%) and Burnley (58%) are both coalition-led councils. Blackpool (57%) is Labour minority and Thanet (55%), Peterborough (55%) and Stoke-on-Trent (55%) are all Conservative minority.

Table 2: Families impacted by £20-per-week reduction to UC/WTC in October 2021

Family type	Families on UC or WTC losing £20 per week in October 2021
Number of families (millions)	Proportion of families who lose	% of all working-age families of that type who lose
All working-age families	5.5	100%	20%
Families with someone in work	3.5	64%	16%
Families without someone in work	2.0	36%	33%
Single without children	2.3	42%	18%
Couples without children	0.6	10%	8%
Single-parent families	1.1	20%	61%
Couple-parent families	1.5	28%	25%
Families where someone is disabled	2.8	50%	35%
Families where no one is disabled	2.7	50%	14%
BAME families	1.1	20%	25%
Non-BAME families	4.4	80%	19%

Source: Microsimulation by JRF using the IPPR Tax and Benefits Microsimulation Model and the OBR’s March 2021 forecasts. Breakdowns may not sum to totals due to rounding.

Making this decision with his eyes wide open:

The cut is opposed by six former Conservative Work & Pensions Secretaries, the Northern Research Group of Conservative MPs, the One Nation Group of Conservative MPs, all the devolved administrations, numerous cross-party committees in all nations of the UK. Iain Duncan Smith recently said, “the extra £20 has returned to UC some of the investment that was cut from my original design.”
100 organisations are urging the Prime Minister not to cut Universal Credit. Among the signatories of the joint open letter to the Prime Minister are leading voices on health, education, children, housing, poverty, the economy and other aspects of public policy. (published 2 September)

First Minister announces 2,000 jobs at Social Security Scotland

More than 2,000 jobs will be created with Social Security Scotland over the next 12 months, First Minister Nicola Sturgeon has announced.

Recruitment will start in October for staff to support the delivery of benefits due to be introduced next year, including the Adult Disability Payment – the Scottish Government’s replacement for the Personal Independence Payment.

The majority of the new roles will be based in Social Security Scotland’s Dundee head office and Glasgow, to take calls from clients and process applications for Scottish benefits.

The remainder will be based across the country to provide face-to-face advice for people applying in the way that would suit them best, whether that is online, by phone, by post or in person.

The First Minister said: “Social security is a human right and a collective investment in the people of this country now and for future generations.

“These roles come at a critical time in Scotland’s recovery from the COVID-19 pandemic and our investment will go beyond the money that we will pay in benefits. When we have introduced all our new benefits and moved clients from the DWP to Social Security Scotland, our new social security service will employ more than 3,500 people. This will provide secure, long-term employment in Dundee, Glasgow and across the country and deliver a positive economic impact of £280 million for our economy.

“We are committed to creating a diverse workforce to provide this public service. Having people from a wide range of backgrounds will help deliver the best service and ensure that we do things differently and treat people with dignity, fairness and respect.”

Social Security Scotland’s Chief Executive David Wallace said: “Social Security Scotland opened its doors in September 2018, and we are already delivering 11 benefits – seven of which are brand new. We know that our clients value our service as we have a 90% satisfaction rating.

“As we welcome more than 2,000 additional staff to deliver new benefits and a high-quality service, we are committed to increasing diversity in the organisation so we reflect the clients we are here to serve and their lived experience.

“We are delighted to be able to create more jobs in Glasgow and to our head office in Dundee and I look forward to welcoming colleagues into Agnes Husband House in 2022.

“We are a Living Wage, Disability Confident and Carer Positive employer. We proudly support the Fair Start Scotland programme and have committed to offering 100 roles as part of Young Persons Guarantee in 2021/22.”

People can find the latest vacancies and sign up for job alerts at:

socialsecurity.gov.scot/jobs