Steve McCabe MP, Birmingham-Selly Oak, is a member of the Work and Pensions Select Committee who in a report released today, recommend that 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.
The report 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 in April, as is the current intention, while the effects of the pandemic are still so widespread will ‘plunge hundreds of thousands of households, including children into poverty’ while dragging those already in poverty ‘down into destitution’.
The Committee recognises that continuing with the increase will come at a ‘substantial cost’ but argues 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 could cost around £6.4bn in the next financial year.
The Committee’s report also calls on the Government to abandon any plans for one-off payment. The Secretary of State for Work and Pensions confirmed to the Committee last week that 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’.
There are fears that such one off payments might deter people from taking up job offers while hanging on for the payment and even worse, plunge those with addiction issues into even further difficulties.
The report has been published after evidence sessions with frontline support organisations and policy experts and the Secretary of State and Permanent Secretary last week.
Steve McCabe MP said:
“The £20 uplift in Universal Credit is currently a lifeline for families facing severe financial hardship. I’ve heard from constituents and charities about the impact of removing the uplift, particularly when unemployment is approaching a 5-year high. This uplift helps the most vulnerable pay for bills, food and other essentials and removing it would cause destitution and hardship for many in Birmingham and across the UK. The cost should be seen as around 2% of what the Government claims to have spent on supporting other people during the pandemic and against the background of cuts of around £37billion in social security spending since 2010.
“The committee’s report today is clear, the £20 week increase in Universal Credit and Working Tax Credit needs urgently to be extended in order to support those who need it most”