A Scottish Parliament Committee has called on the UK Government to make permanent the temporary £20 Universal Credit (UC) uplift and has expressed ‘considerable concern’ about the significant number of people unable to access social security support during the pandemic.
With the pandemic having a disproportionately negative impact on the poorest in society, the Committee highlights the urgent need to review what has been learned so far to ensure existing services are reformed and new services designed to provide people with the support they need to come through this major economic shock.
While praising the unprecedented amount of resource that has been passed to public bodies, local authorities and the third sector to help in response to the pandemic, the Committee express deep concerns about the number of people unable to access any support.
They say the newly self-employed and people with savings are two groups who have not been given sufficient support by the current social security system.
The Committee has called on the Scottish and UK Governments to work together to consider the feasibility of a Citizens Basic Income (CBI) as part of the response to any future crisis.
They say this is potentially a fairer way to share available support and could avoid some groups of people receiving no support at all.
Given the main income-replacement benefit (UC) is reserved to UK Ministers and the interlink between Scottish social security benefits and UK Government DWP benefits, the Committee say it is more important than ever that both Governments work constructively together to respond to this crisis.
Speaking as the report was published, Social Security Committee Convener, Bob Doris MSP, said:“This pandemic continues to have a devastating impact on people’s lives, particularly our most vulnerable in society.
“Social security has a critical role to play in supporting people at times of crisis and while we recognise the unprecedented support both the Scottish and UK Governments have provided, it is clear that too many people have fallen through the cracks.
“In order to protect the most vulnerable, the temporary uplift in Universal Credit must be made permanent, and more must be done to help those not currently eligible for support, particularly the newly self-employed and those with savings. A Citizens Basic Income for the duration of any future crisis may be one way to protect those who have missed out on support.
“As we know, responsibility for assistance with housing costs lies mainly with the UK Government and Scottish Ministers have very limited powers in this area. So we are calling on both Governments to work together to look at what assistance can be provided to people struggling, whatever their tenure.”
He added: “The Committee is extremely disappointed that the Secretary of State for Work and Pensions did not accept any of the Committee’s invitations to give evidence, either for this inquiry or previous Committee work. Given the interlinked nature of social security across both Governments: this must change in future.
“We’d like to thank all who contributed to our inquiry. The long-term impact of the pandemic is still unknown but it is vital that social security provides a safety net for all of those who need it during this and any future crises.”
The Committee say the pandemic has exposed some of the shortcomings of the current social security system, including problems with the Scottish Welfare Fund (SWF). They say these problems have been exacerbated by the pandemic and have urged the Scottish Government to work with COSLA to review the SWF to ensure it is fit for purpose.
The Committee’s report also says although locally distributed discretionary payments play an important role when responding to urgent or temporary need, longer-term needs are better met by national entitlements with clear and consistent eligibility criteria to give people certainty when accessing support.
NHS Lothian has announced that, as part of a commitment to the #youngpersonsguarantee, they will be the first Health Board in Scotland to go live with #kickstart opportunities throughout 2021.
The Kickstart Scheme is a 6 month paid job with a local employer, funded by the Government. It provides a fully funded opportunity for young people to gain experience of working in one of Britain’s most exciting companies.
The Kickstart Scheme was announced by the Chancellor in the Summer, and will offer hundreds of thousands of job opportunities over the next two years. A £2 billion pot is available to fully fund exciting positions with businesses across Britain.
Jobs from the Kickstart Scheme are open to 16-24 year olds, who are claiming Universal Credit, and are at risk of long term unemployment. If you have a work coach they will talk to you about the Kickstart Scheme and whether it’s right for you.
We have roles on offer in many different types of businesses, and across England, Scotland and Wales. Plus if you take on a Kickstart placement you might be able to progress to an apprenticeship within the same company.
Over three-in-ten people who have started claiming Universal Credit (UC) during the pandemic have either acquired new debts, or seen their existing debts grow, as the crisis enters its eleventh month, according to new research published by the Resolution Foundation.
The debts that divide us – which includes analysis of a detailed online YouGov survey, supported by the Health Foundation – explores how people who have newly claimed UC during the pandemic have coped financially, as well as their prospects for the coming months.
The Foundation notes that of the almost six million people who are currently claiming UC, around three-in-five made a new claim in 2020, including many of the 1.4 million people who made a new claim at the start of the crisis in April and May of last year.
The research finds that families newly claiming UC have taken a major income hit, even with the vital £20 a week uplift to UC. Almost half (45 per cent) reported seeing their income fall by at least a quarter, while around one-in-three (34 per cent) reported seeing their income fall by at least 40 per cent.
And with the pandemic-induced economic crisis having lasted almost a year, the research shows that the big income losses faced by people moving onto UC are taking their toll on their ability to cope financially.
The research finds that over three-in-ten (31 per cent) new UC families have either acquired new debts or seen their existing debts grow, while around one-in-five (21 per cent) have fallen behind on paying essential (non-housing) bills.
Looking ahead to the next three months, a period in which UC is set to be cut by £20 a week (from 5 April 2021), three-in-five (61 per cent) UC families say they will struggle to keep up or will fall behind on bills, around twice the proportion of families across the economy as a whole (31 per cent).
The Foundation says that the uplift to UC has been essential for protecting family incomes during a pandemic that is lasting far longer than anyone expected when the policy was announced back in March 2020. The uplift is likely to prove just as vital in the coming months too, as more people claim UC off the back of rising unemployment.
It adds that with millions of households claiming UC experiencing real financial hardship, cutting their support in just two months’ time would be a grave error – and extinguish any hopes of a living standards recovery this year.
Karl Handscomb, Senior Economist at the Resolution Foundation, said:“Over three million people have started claiming Universal Credit since the pandemic began, including 1.4 million people who moved onto the benefit right at the start of the crisis.
“As the pandemic reaches its eleventh month – a depressing duration few expected last March – the income shock from with moving onto Universal Credit has evolved into mounting debts and arrears on essential bills.
“The Chancellor was right to raise Universal Credit to support families through tough economic times. And with tough times set to continue as unemployment rises through 2021, this vital boost to family incomes must be maintained.
“Cutting the incomes of six million families in just two months’ time, when public health restrictions are still likely to be widespread, makes no sense politically, economically, or in terms of raising people’s living standards.”
The Chancellor must maintain for another year ‘at the very least’ the £20 per week increase in Universal Credit (UC) and Working Tax Credit introduced to support families during the coronavirus pandemic, MPs say today.
Work and Pensions Committee calls for year-long extension of increase ‘at the very least’
Removal in April while pandemic still being felt would plunge hundreds of thousands of families into poverty
Any plans to replace rise with one-off payments must be abandoned amid concerns over fraud and impact on vulnerable
The report from the Work and Pensions Committee notes that since March the number of people claiming UC has doubled to around six million, while job vacancies remain far below pre-pandemic levels.
It warns that removing the payment as planned in April, while the effects of the pandemic are still being felt, would ‘plunge hundreds of thousands of households, including children into poverty’ while dragging those already in poverty ‘down into destitution’.
While the Committee recognises that continuing with the increase would come at a ‘substantial cost’, the Committee argues that this should be seen in the context of the Treasury’s own £280bn figure for total spending on coronavirus support measures this year. The Joseph Rowntree Foundation has estimated that keeping the £20 rise would cost around £6.4bn in the next financial year.
The report also calls on the Government to abandon any plans for one-off payments to replace the weekly rise. The Secretary of State confirmed to the Committee last week that the DWP had been asked to investigate such an option but said it was not ‘one of the Department’s preferred approaches to providing that financial support’.
Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Removing the extra payment in March would represent a failure by Government – failure to recognise the reality of people struggling.
“Without regular support, hundreds of thousands of families will be swept into poverty or even destitution. Government must end the uncertainty and commit to extending this lifeline.
“The Chancellor faces difficult decisions about the public finances. He may find it hard at present to make the increase permanent. But the pandemic’s impact on the economy and livelihoods will, sadly, be with us for some time. An extension for a year should be the bare minimum.
“We must also hope that Rishi Sunak will listen to the groundswell of arguments against one-off payments as an alternative, including from his cabinet colleague at our Committee last week. There is broad agreement that a steady income is necessary to support people.”
Report findings and recommendations
Impact of removing the £20 per week increase (Chapter 2)
Analysis by the Joseph Rowntree Foundation (JRF) has concluded that withdrawing the temporary increase ‘will risk sweeping 700,000 more people, including 300,000 more children, into poverty’
One-off payments (Chapter 3)
The Committee shares the Secretary of State’s view that a steady income is the best way to support people and is concerned that one-off payments could increase the risk of fraud and about the risks to vulnerable people.
The proposed way forward (Chapter 4)
The Committee has previously called on the Government to make the £20 per week increase permanent with annual inflation-based increases. The report acknowledges however that ‘in the short term, the Chancellor faces some very difficult decisions about the public finances amid a great deal of uncertainty about the future.’
If the Chancellor cannot yet commit to making the increase permanent, he should at the very least extend it for a further 12 months. The Government should then announce its future plans for the rate of Universal Credit no later than the Autumn Statement 2021, to give claimants enough time to plan and budget.
Trussell Trust report says one in five ‘very likely’ to turn to food banks if Universal Credit uplift is removed
Nearly a quarter of a million parents on Universal Credit fear not being able to properly feed their children if cut to benefit goes ahead, according to new report.
The report from the Trussell Trust warns of growing need for food banks from people claiming Universal Credit as one in five people on the benefit say that they are ‘very likely’ to turn to one, if the £20 rise is removed.
The Trussell Trust is urgently calling on the government to keep the £20 weekly uplift to Universal Credit due to end in April, as a survey reveals the alarming consequences of cutting it.
When the pandemic first hit, the government increased Universal Credit payments by £20 each week which the charity says has prevented tens of thousands of people from needing to use a food bank.
But new research conducted by YouGov on behalf of the Trussell Trust finds 41% of people claiming Universal Credit – representing more than 2.4m people across the UK – fear they will be very likely to cut back on food for themselves if the planned cut goes ahead in April.
Worryingly, 13% of parents surveyed – representing more than 220,000 families – think they would be very likely to cut back on food for their children, meaning they simply would not have enough money to cover the basics.
The report forecasts an increase in the need for food banks amongst people claiming Universal Credit with 20% of people on Universal Credit -representing 1.2 million people – saying they would ‘very likely’ turn to a food bank for help with £20 less a week.
This comes on top of record levels of need experienced at food banks throughout the charity’s network during the pandemic, with huge increases in emergency food going to children. Further, it says these figures are just the tip of the iceberg, as many people will have been helped by other community groups.
The charity says this is about more than food with millions of people set to struggle to pay for clothing and to heat their homes and many saying they will be plunged into debt as a result of the cut.
With just weeks to go until the reduction is due, the charity insists this situation can be turned around. The report shows how the uplift provided welcome relief to hard-pressed budgets, with seven in 10 (72%) people claiming Universal Credit since early 2020 saying it has made buying essentials easier.
The charity joins many other organisations in urging the government to make the uplift permanent, or maintain it for one year at the very least, as well as extend it to people on legacy benefits who were denied the uplift last year.
It adds that only by keeping this lifeline in the longer-term will it be possible to work towards creating a hunger free future.
Emma Revie, chief executive at the Trussell Trust, said:“The £20 increase to Universal Credit introduced at the start of the pandemic has been vital in protecting tens of thousands of people from being swept into serious financial hardship.
!This survey reveals the shocking consequences of what lies ahead if this lifeline is cut in April. This isn’t right. No one should have to suffer the indignity of relying on emergency food.
“It’s clear that action is needed to ensure our benefits system provides people with enough money to cover the essentials. That’s why we’re insisting the government turns this situation around. Keeping the £20 Universal Credit uplift, and extending it to legacy benefits, will provide an anchor from poverty for people who need it most.
“The government should continue to do the right thing and keep this lifeline. It is a crucial step in moving towards a hunger free future for the UK.”
Tragic choice two thirds of “forgotten disabled people” have been forced to make during pandemic
· For ten months UK Government has refused emergency funding to over 2.2 million people on legacy benefits to support them through the COVID-19 crisis
· New evidence sent to Chancellor Rishi Sunak shows disabled people now facing immense hardship
· Coalition of over 100 organisations working with disabled people fear ‘terrible consequences’ if Government fails to announce financial support for legacy benefits claimants in March Budget
Denying disabled people on legacy benefits, including Employment and Support Allowance (ESA) and Jobseeker’s Allowance, financial help to survive the COVID-19 crisis has left growing numbers unable to pay for rent, food and heating, new research shows.
The Disability Benefits Consortium (DBC), a network of over 100 organisations including the MS Society, Z2K, Disability Rights UK and Inclusion London, asked 1,126 legacy benefits claimants what difficulties they have been facing since the start of the pandemic.
The findings – which are included in the ‘Pandemic Poverty: Stark choices facing disabled people on legacy benefits’ report – reveal:
· The majority (82%) said they had spent more than they normally would – due to greater food shopping and utility bills, as well as having to pay for taxis to attend essential appointments – since the COVID-19 crisis began.
· Two thirds (66%) said they had to go without essentials like food, heating or medication as a result of increased costs since the pandemic started.
· Nearly half (44%) said they had fallen behind on financial commitments like rent, mortgage payments, or household bills.
The devastating impact shown in the report comes ten months after over 2.2 million people on legacy benefits were originally refused a £20 per week lifeline to support them through the pandemic – something people on Universal Credit have been getting since last March. The Universal Credit uplift will expire in April and no announcement has been made on whether it will be extended.
Excuses as to why legacy benefit claimants have been left behind include ‘technical difficulties’ and ‘they are getting a 37p annual increase from April’. The latest is that people on legacy benefits have the option to switch to Universal Credit, ignoring the fact that wider adjustments could leave people worse off, as well as serious flaws in the assessment and monitoring process of Universal Credit.2
Deborah, 53, from Cleckheaton in West Yorkshire lives with fibromyalgia. She cares for her partner, Steve, who has a congenital heart condition, and has just been diagnosed with diabetes. The couple rely on Deborah’s overdraft to pay for their food deliveries and heating, but now she is £800 overdrawn and having to make the choice between the two.
She says: “Being overdrawn makes me really stressed out because I’m thinking ‘how am I going to get this all back down?’ We’re already having to cut back on things like food, but the worst is not being able to have the heating on.
“We both feel like we’re undervalued…as if we don’t matter to the Government, whereas people on Universal Credit are better looked after. That extra £20 would be a godsend, and would mean we could put the money towards things we desperately need.”
David Allen, 62, was diagnosed with primary progressive multiple sclerosis (MS) in 1996 and lives alone in Luton. He has been receiving legacy benefits for over 10 years. David was bedbound with COVID-19 in March, and, as he is clinically vulnerable, has no choice but to have food delivered.
He says: “My shopping bill usually comes to £20 to 35 per week, but as I don’t feel safe going to the supermarket I’m having to rely on deliveries. The minimum order is £25, but if your order is less than £40 you get hit with by a delivery charge. On top of this, a tremor caused by my MS means it’s dangerous for me to use a knife or carry pans with hot water in, so I have to buy ready meals and prepared vegetables that I can put in the microware. These all come at a premium.
“I’m constantly worrying about other costs – I find myself sitting in the dark more than I should so as not to turn the lights on for too long, as well as only switching the TV on when I’m watching a programme. I live on my own so it’s hard not to think your world is closing in around you. The harsh reality is that the pandemic has meant our bills are going up quicker than our income, and there’s just nowhere to go to make up for that. It’s meant we feel abandoned and left to sink.”
Over 120,000 people have signed the ‘Don’t Leave Disabled People Behind’ petition, and 98% of MPs in the UK have heard from their constituents about the issue.
In addition, The Work and Pensions Select Committee, Social Security Advisory Committee, MPs from all parties, countless other charities and coalitions, the Lords Economic Affairs Committee and, most recently, the APPG on Poverty have all supported the DBC’s call to immediately give all out of work benefits the same COVID-19 emergency £20 increase that Universal Credit has seen.
Anastasia Berry, Policy Manager at the MS Society and Policy Co-Chair of the DBC, says:“An unforgivable number of disabled people have been put in danger of falling into poverty because of the extra costs of the pandemic – and the Government continues to ignore them.
“For nearly a year over 2.2 million people on legacy benefits have been given little more than a promise from the Prime Minister that he would “wrap his arms around the country” – but platitudes don’t keep people warm. Many have been forced to make awful choices to help them survive – from choosing between heating and eating to racking up debt to pay for rent.
“We have heard every excuse for why disabled people are being discriminated against, but the latest – that they can ‘move to Universal Credit’ – is the most misleading yet. The Government’s disregard of the facts could result in people being even worse off financially. The upcoming budget is a chance for the Chancellor to finally show the forgotten disabled people they matter, and they’re as important as those in receipt of Universal Credit. Without the £20 lifeline more people will be pushed into poverty and face terrible consequences.”
Ella Abraham, Z2K’s Policy and Campaigns Officer and Campaigns Co-Chair of the DBC, says:“2.2 million people on legacy benefits, the majority of whom are disabled, have now been excluded from the £20 per week financial lifeline for 10 months. The Chancellor’s inaction on this has created a two-tier discriminatory welfare state which has pushed a huge number of people into poverty.
“Forcing people onto Universal Credit where many will not be better off isn’t a solution, what we need is a social security system that ensures people are not having to survive on the bare minimum but have the income they need to live a stable and dignified life. The Government must increase legacy benefits now.”
Re: Increase Disability Benefits campaign reaches over 119,000 signatures.
You will no doubt remember that we wrote to you back in June. Then, as now, we called on you to give parity to disabled people claiming legacy benefits, such as Employment and Support Allowance, Job Seekers Allowance and Income Support by extending the £20 uplift afforded to those claiming Universal Credit since Spring.
Since we last wrote, thousands more have signed our petition urging you to do justice to those on legacy benefits by extending the uplift. And today, in anticipation of your Spending Review announcement, we deliver these tens of thousands of calls to action to you.
Just as you no doubt do, those who have signed our petition recognise that disability costs. People living with a disability and those with long-term health conditions tend to have lower real incomes and higher costs than the general population. This has been compounded during the pandemic, with many disabled people facing extra costs. Costs such as paying for taxis, to avoid the risk of public transport; paying for supermarket deliveries to avoid the risk of going to shops; paying for higher call and data charges to avoid loneliness and isolation.
Both the Social Security Advisory Committee and the Work and Pensions Select Committee as well as a number of MPs have called for the uplift to be introduced. The Secretary of State cited the inability of the IT systems as a reason not to implement an immediate change. However, with the Spending Review imminent where the benefit rates will be decided, this is your opportunity to do the right thing.
We believe that it cannot be the deliberate intent of Government to abandon some of the most severely and chronically disadvantaged citizens to heightened financial struggle in the midst of the destabilising, frightening and isolating experience of living with disability in the context of a global pandemic. With no immediate end in sight to this pandemic, it is only fair and reasonable to provide the same boost to those on Job Seekers Allowance, Employment and Support Allowance or Income Support as has been provided to those claiming Universal Credit.
Disabled people are likely to feel the impact of this crisis for a long time to come. Please don’t leave them behind!
Should you have any questions please contact me at matthew.harrison@mencap.org.uk.
Yours sincerely,
Matt Harrison
On behalf of the DBC Steering Group (Parliamentary Co-chair, Disability Benefits Consortium)
NEW POLL: 50% of low-paid workers have suffered income loss in the pandemic, compared to 29% of high earners
TUC budget submission calls for a “workers’ budget” and extension of JRS to the end of 2021
New polling, published this week by the TUC, finds that low earners are more likely than middle and higher earners to have been forced to cut spending and take on debt during the pandemic.
The poll findings (conducted for the TUC by BritainThinks) come as the TUC publishes its budget submission, which calls on the Chancellor to improve pandemic support for low- paid workers, and to invest in job protection and creation to prevent an unemployment crisis following the pandemic.
Low paid workers and the pandemic’s impacts
Over a third (37%) of workers said that their household had suffered a reduction in disposable income since the pandemic began.
This rises to half (50%) for workers with annual earnings below £15k, while it is just three in ten (29%) for workers earning more than £50k.
The lowest earners are also the most likely to have had to reduce spending and take on debt.
Percentage of workers saying that since start of pandemic they have….
Annual earnings
(1) Less disposable income
(2) Needed to reduce spending
(3) Taken on more debt
Less than £15k
50%
46%
29%
Between £15k and £29k
35%
30%
18%
Between £29k and £50k
33%
31%
20%
More than £50k
29%
24%
18%
All workers
37%
34%
21%
The TUC says that low-paid workers have been worse affected because:
Insecure work: Low paid workers are often employed on terms such as zero-hours contracts, which give them no protection when their hours of work are cut back.
Household budget flexibility: Workers who are already struggling on low pay have much less flexibility than middle and higher earners to reduce spending and avoid debt.
Hard-hit sectors: Hospitality, leisure and non-essential retail have had by far the highest rates of furlough, and they are both sectors with large numbers of low-paid workers.
Remote working: Middle and high wage earners are more likely to have jobs that can be done form home, meaning they can avoid the need to be furloughed and may also make savings such as their usual commuting costs.
Furlough is protecting incomes but can pay less than minimum wage: The job retention scheme does not have a floor, meaning that some workers receiving 80% of their wages have fallen below the minimum wage. Two million employees were paid below the minimum wage in April 2020 (compared to 409,000 in April 2019) and the majority of these were on furlough at the time.
TUC Budget submission
The TUC’s budget submission calls for a workers’ budget.
The union body encourages the Chancellor to follow the recommendations of the OECD to make greater use of fiscal policy to support the economy.
By increasing support for working people and low-income households, the Chancellor would also be using fiscal policy to protect the economy and stimulate recovery.
TUC budget recommendations include:
Extending the job retention scheme to the end of 2021.
A wage floor within JRS to prevent furlough pay falling below the minimum wage.
Permanent retention of the £20 per week increase in universal credit, and an end to the five-week wait for new universal credit claimants to receive payment.
Increasing child benefit and child tax credit and removing the two-child limit.
Fixing statutory sick pay by raising it to £330 per week (to match the level of the real Living Wage) and by extending eligibility to the two million low-paid workers currently excluded from SSP.
Raising the national minimum wage to at least £10 per hour.
The full submission includes further recommendations to invest in job creation and boost skills – including retaining the £12 million Union Learning Fund, which supports 200,000 workplace learners annually.
TUC General Secretary Frances O’Grady said: “When a crisis hits, the most exposed should get the most protection. But many low-paid workers are struggling through the pandemic on less money and with higher costs. And they are falling into deeper poverty and debt.
“Good government means stepping in to help. The Chancellor should help by extending furlough to the end of the year, with a guarantee that support will never be less than minimum wage. And last year’s boost to universal credit should be kept – permanently.
“Many of these low earners are key workers who have kept our country going. We owe it to them to build a fairer economy after the pandemic. The Chancellor should give Britain a workers’ budget next month. It should be a plan for full employment, with decent pay and job security for every worker.”
Pressure has mounted on the Prime Minister to provide a vital lifeline to millions of families across the UK after a House of Commons debate and vote on Monday evening to extend benefit increases which is worth £20 per week.
Millions of low -income households across the UK could see their incomes fall dramatically in April if the uplift in universe credit ends.
It is estimated that around 16 million people will be in households facing an overnight income loss equivalent to £1,040 a year, with those on the lowest incomes and families with children being hardest hit.
In an instant, 700,000 more people risk being pulled into poverty, including 300,000 children, and 500,000 more of those already in poverty will be plunged deeper into poverty (more than 50% below the poverty line).
Christians Against Poverty along with other charities are urging the Prime Minister to back the ‘Keep the Lifeline’ campaign and support making it permanent for those on Universal and tax credits.
Emma Jackson, National Director of CAP in Scotland said, “The uplift has been a lifeline for people and to remove it would cause devastating effects. We are urging the government to keep the £20 Universal credit uplift in place, and extend it to those on legacy benefits.
“Introducing this was a bold and compassionate measure made by the government and this one action has prevented hundreds of thousands of families across the UK from being pulled further under by the tide of poverty. We know right now that things are incredibly difficult for those on the lowest of incomes and they need financial support.
“We are delighted that significant support has been displayed today in favour of keeping the £20 a week uplift on UC and tax credits. Introducing the £20 a week uplift has been a vital lifeline for so many of our clients at CAP. This one action has prevented hundreds of thousands of families across the UK from being pulled under by the tide of poverty.
“However, we’re extremely disappointed that the government has yet to take the opportunity to extend the uplift. This will put extra pressure and uncertainty on so many families, including pushing families into debt to meet essential costs.
“For those already worried about debt, CAP and other free debt help charities are still here and still working to help those overcome the weight of debt.”
New report shows 60,000 Scots face poverty as result of UK cuts
More than 60,000 people in Scotland, including 20,000 children, will be plunged into poverty if the UK Government continues with plans to withdraw benefits brought in to provide support through the coronavirus (COVID-19) pandemic, a new report has shown.
Scottish Government analysis shows that if the UK Government takes away the £20-a-week increase in Universal Credit and Working Tax Credits, and reinstates the Minimum Income Floor for the self-employed, as planned in April 2021, Scottish households will lose up to £476 million.
Social Security Secretary Shirley-Anne Somerville said: “We are very concerned about the economic impact of the pandemic on people, particularly those on low incomes. This report highlights that if these cuts go ahead, hundreds of thousands of households in Scotland will see their incomes drop by more than £1,000 per year. This could push even more people into poverty.
“Last year the Scottish Government invested nearly £2 billion to support low income households and to tackle poverty. We have also introduced the new Scottish Child Payment to tackle child poverty head on.
“The UK Government must match our ambition and support people in need. They can start by using next week’s spending review to confirm that they will keep the £20 uplift to Universal Credit and Working Tax Credits and give people the certainty they need, not wait until April 2021 when people will face a cliff edge.”
Peter Kelly, Director of the Poverty Alliance, said: “Increasing Universal Credit payments was the right thing to do when the pandemic first struck. It has been a vital lifeline for hundreds of thousands, and it’s right that this support remains in place.
“More people will be swept into even deeper poverty if the £20 uplift is cut. Lone parents will be particularly hard hit, but the impact will be felt by all groups which need this vital support.
“We would urge the UK Government to act on this important evidence, to keep households afloat by retaining this lifeline.”
Scheduling the withdrawal of the £20 uplift and the reinstatement of the Minimum Income Floor to April 2021 will coincide with the Job Support Scheme and the Self-Employment Income Support Scheme coming to an end.
The Job Retention Scheme has played an important role in curbing unemployment since it was introduced in March, with nearly a quarter of a million workers furloughed in Scotland as of 31 August. If the scheme finishes as scheduled in April 2021, it is likely the number of people claiming benefits will rise further.
The Scottish Government report, Impact of withdrawing emergency benefit measures, can be read in full here.
The Minimum Income Floor (MIF) is a base amount used to calculate how much Universal Credit should be awarded to self-employed people. Anyone earning below the MIF is treated as though they earn that amount, while those earning more have their actual earnings taken into account.
When the UK Government removed the MIF, everyone who was self-employed received benefits based on their actual earnings.
Scotland’s Social Security Secretary recently joined Ministers from Wales and Northern Ireland in writing to the Secretary of State for Work and Pensions Therese Coffey, asking that they work together to ensure those who are entitled to financial support are receiving it – and to call for the £20 uplift on Universal Credit to be made permanent and extended to other benefits which will eventually be replaced by UC.
The report, published in June, made a number of recommendations about supporting those claiming Universal Credit, as well as legacy benefits and those with no recourse to public funds due to their immigration status.
It also made recommendations on the HSE and called on the DWP to develop a strategy for dealing with the effects of the economic downturn.
Committee Chair Stephen Timms MP has now written to the Secretary of State Thérèse Coffey MP to press the Department on a number of points not addressed by the Government response.
Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “We don’t necessarily expect the Government immediately to accept every recommendation we make. But we do expect that it will at least explain its position. This response to our report leaves many questions unanswered.
“In the course of our inquiry, we heard concerns that the Government’s very welcome increases to some benefit rates would be undermined by the benefit cap. Ministers assured us in April that only a small number of people would be affected. In fact, DWP’s own statistics show that 84,000 households were newly capped between February and May this year.
“The Secretary of State also assured the House in May that she was looking very carefully at what could be done for people who had mistakenly applied for Universal Credit and left themselves worse off as a result. We recommended that the Government act urgently to put this right. It now seems that nothing is going to be done for these people. If that’s the case, the Government should say so clearly, and explain why.
“Just as importantly, there seems to be little acknowledgement of the role of the Department in planning for future pressure on the social security system. There needs to be a firm commitment to analysing how coronavirus has affected levels of poverty and a clear strategy—available for public scrutiny— for coordinating the employment response to the economic downturn.”
