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.”
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.”
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.”
From 1 December 2021, HM Revenue and Customs (HMRC) will stop making payments of Child Benefit, Guardian’s Allowance and tax credits, into Post Office card accounts.
HMRC is urging customers who receive their payments via this method to act now so they still get their money on time.
Any tax credits, Child Benefit and Guardian’s Allowance customers who receive their benefits or payments via a Post Office card account have until 30 November 2021 to set up a new account and notify HMRC of the details so they can continue to receive their payments. Any suspended payments will be held and then paid to the customer once they notify HMRC of the new details.
If customers already have an alternative bank account, they can contact HMRC now to update their details. If they do not have an alternative, they should set up a new bank, building society or credit union account to receive their money.
Customers can use their Personal Tax Account to provide revised account details. Alternatively, Child Benefit customers can change their bank account details via GOV.UK or by contacting the Child Benefit helpline on 0300 200 3100.
Tax credits customers can change their bank account details by contacting the tax credits helpline on 0345 300 3900. If customers cannot open a bank account, they should contact HMRC.
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.”
“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.”
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)
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:
Disabled people are to benefit from a ground-breaking new advocacy service which will support access to Scotland’s social security services.
The Scottish Government has committed £20.4 million over the next four years to the provision of the new and free programme, unique in the UK.
It will offer advocacy support to disabled people looking to access Scottish social security benefits.
These include current and future disability benefits such as Child Disability Payment, Adult Disability Payment and Pension Age Disability Payment.
The service will be operational in the new year and is entirely independent of the Scottish Government and Social Security Scotland. It will be available in each NHS board area and will create up to 100 new jobs across the country.
Social Security Minister Ben Macpherson said: “The service will provide advocacy to anyone who is disabled and requires support to communicate their needs when accessing Scotland’s social security services.
“This assistance will be person-centred and advocates will provide the most appropriate form of support to each individual based on their circumstances.
“This is a new and independent free service, with no equivalent provided by DWP.
“It builds on our human rights-based approach and makes social security more accessible to disabled people in Scotland, ensuring their voices are heard.”
VoiceAbility, a charity with 40 years’ experience delivering advocacy services, has been awarded the contract to provide the service.
They will establish a new base and training centre in Glasgow and create up to 100 jobs over the four years. There will be at least one advocate in each NHS area at launch, with more jobs to be created as disability benefits are introduced.
VoiceAbility CEO Jonathan Senker said: “We are proud to launch this new independent advocacy service and we look forward to establishing a base in Scotland and taking on the staff to deliver it.
“The advocacy we provide will support disabled people to make sure their voices are heard when it matters most and that more people will get the support they’re entitled to.”
Brian Scott of the Glasgow Disability Alliance added: “Our members have highlighted the barriers that many disabled people face in accessing support to find out about the social security benefits they are entitled to – and to apply for them.
“We welcome this free advocacy service as it will ensure disabled people are more involved in the processes and decisions which affect them.
“In making social security more accessible to disabled people, it shows real evidence of a rights-based approach to providing services.”
Scottish Government’s £5.2 billion for social security support
Social security expenditure in Scotland will total £5.2 billion in 2026-27, according to the Scottish Fiscal Commission’s latest forecast report published today/yesterday.
The amount spent is projected to increase by £1.5 billion over the five years due to a variety of reasons including an increase in benefits provided, inflationary rises to payments, Scotland’s ageing population increasing caseloads for payments to support the pension age group and more children and working-age people receiving disability benefits.
It is expected that more people will access financial support in the coming years as the Scottish Government continues the roll out of devolved benefits. This includes Adult Disability Payment which will replace Personal Independence Payment for disabled people of working age in Scotland in 2022.
The Scottish Child Payment will also be extended to children up to the age of 16 from the end of 2022 if data relating to this benefit is received from the Department for Work and Pensions.
Social Security Minister Ben Macpherson said: “Social security is an investment in the people of Scotland and is a fundamental human right. With the devolved social security powers and limited resources that we have, we are committed to making sure everyone can access the financial support they are entitled to.
“By understanding people’s experiences of accessing UK Government social security support, we have sought to ensure that our new Scottish Government service is easily accessible and that people have a good experience when interacting with the Scottish social security system. If someone is eligible for support then it is our responsibility to make sure that they know about available payments, and help them get the money they need and that they are due.
“As well as the introduction of our new disability benefits in 2021 and 2022, in the coming years, we will also introduce Scottish Carer’s Assistance, which will replace the UK Government’s Carer’s Allowance in Scotland.
“In 2023-24 it is forecast that nearly 300,000 children will benefit from the Scottish Child Payment. This will be the first full year of the planned rollout of Scottish Child Payment to 6 to 15 year olds. We also plan to significantly increase the value of Scottish Child Payment, doubling it to £20 per week within the lifetime of the Parliament and lifting more children out of poverty.
“It is vital that the UK Government matches our efforts. We need UK Ministers to take decisive action in the areas where they have power and responsibility and to reverse their welfare cuts which are hitting households harder than ever.
“I call again on the UK Government to end their benefit cap, bedroom tax and two-child limit, and to maintain the £20 Universal Credit uplift.”
