The Government must think again about its decision to cut Universal Credit

The Covid pandemic has taken a devastating toll on our country, leading to the one of the highest death rates in the world, as well as the deepest recession in more than 300 years, which has forced tens of thousands of businesses to the wall and led to record levels of unemployment.

One of the lesser-reported fallouts has been the increased demand in Universal Credit claimants, as millions struggle to make ends meet, both in work and out. This led to the Government increasing the payment by £20 per week at the start of the pandemic – a welcome change which made a big difference to those who are reliant on the support to help put food on their table.

Worryingly, there are around five million Universal Credit claimants, twice as many as before the pandemic, and more than a third are in work. So now is completely the wrong time to cut the support, given the demand is higher than ever before. A permanent uplift would cost about £6 billion a year, a fraction of the £37bn this Government wasted on its failed Test and Trace system.

Despite all this, the Government intends to plough ahead with its plans to end the uplift at the end of September, despite millions continuing to rely on it for support and the economy and jobs market still in a precarious position.

The Government has faced fierce criticism from its own backbenchers on this issue, including six former work and pensions secretaries, who last month wrote to the Chancellor to demand an extension to the uplift, with many also calling for an overhaul of the Universal Credit system to reduce waiting times.

The rebellion isn’t because the Tories have suddenly found some compassion. In January, academics at the University of Sheffield mapped the local authorities where rates of hunger were highest. Of the 100 councils with the highest levels, 122 constituencies within them were shown to be represented by Conservative MPs, compared with 76 Labour MPs, while even House of Commons Leader Jacob Rees-Mogg was shown to represent an area with the highest rates of food poverty in Britain.

It is this that has finally forced them to act.

Stockport, like elsewhere, has faced equally challenging times. Just last month it was revealed that the number of people on Universal Credit has once again increased in all 10 Greater Manchester boroughs, with Stockport now having  more than 22,000 claimants – almost 10% of all those that live in the borough.

Ahead of the Spending Review last December I spoke in support of Unite the Union’s ‘Universal Credit Day of Action’ and called on the Government to retain the additional £20. Sadly, the Chancellor chose not to make the uplift permanent when he appeared at the Despatch Box.

This was a kick in the teeth for all those claiming Universal Credit who are already in work, including many frontline staff who have been at the coalface of this crisis but are reliant on state aid as a result of poverty wages. A cut now clearly shows that this Government is not, as it repeatedly claims, on the side of working people.

Last month a report by the Institute for Fiscal Studies revealed just how important the Universal Credit uplift is. While Lord Kerslake, who is heading up the Kerslake Commission – which includes the Mayor of Greater Manchester and will be publishing its findings later this year – has published his initial findings and called for the uplift to be retained to prevent an increase in homelessness and rough sleeping, and to stave off a mental health crisis.

What’s clear is that, at a time of continual uncertainty and the threat of a return later this year to Covid restrictions, we cannot cut crucial aid such as Universal Credit. Not least when the Government itself doesn’t know what the impact would be. Shockingly, in the past week, Work and Pensions Minister Will Quince was forced to admit that it was “not possible to produce a robust estimate of  removing the £20 uplift on levels of in-work poverty or on child poverty”.

Even more worryingly, when he was asked repeatedly about the cut’s effect on regional inequality, material deprivation, women, ethnic minorities, and the levels of debt claimants would have to take on to survive, Mr Quince admitted that “No assessment has been made.”

Until those impact assessments are carried out, and until our economy is on an even keel again and this Government is able to address long term issues such as in-work poverty, it must think again about its decision to remove the £20 Universal Credit uplift.