Joint open letter to The Chancellor - Keep the lifeline

30th Sep 2020

Dear Chancellor,

Following your statement last week, we are writing to you, to collectively urge you to make the temporary £20/week increase to the standard allowance of Universal Credit and Working Tax Credit permanent from April, as well as extend the same uplift to ESA, Income Support and JSA.

We welcomed the swift action you took at the start of the pandemic to implement this much needed investment. Falling incomes and rising costs throughout the pandemic have put families under immense financial pressure, but the £20 uplift has been a lifeline that has enabled many of them to keep their heads above water and has stopped us seeing a marked surge in poverty levels.

However, if the uplift ends in April 2021, this good work risks being undermined. Modelling by the Joseph Rowntree Foundation indicates 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. At a stroke, 700,000 more people will be pulled into poverty, including 300,000 children, and 500,000 more of those already in poverty will be plunged into deep poverty (more than 50% below the poverty line). We are therefore urging you to make the uplift permanent and stop families being cut adrift whilst they need help to stay afloat.

Your statement last week made clear that many families will see job losses over the months to come, and even those whose jobs are protected through the Job Support Scheme will see income cuts. Along with measures to protect jobs, we hoped to see reassurance and commitment to those who have already, or will be faced with, job and income loss. Even the most optimistic forecasts expect unemployment to surge and remain high for some time to come. We warmly welcome the government’s commitment to invest in jobs, skills and infrastructure; these will be vital to boosting opportunity across the country. However, these investments will take time and it is crucial that our social security system offers the certainty and security people need to help them stay afloat so that they are equipped to grasp every new opportunity and are protected from the damaging long term consequences of financial hardship.

Further, it is simply not right that those on legacy benefits, who are mostly sick or disabled people and carers, and so have been most at risk during this pandemic, have not been thrown an equivalent lifeline. We urge you to follow the advice of the Social Security Advisory Committee and support 1.5 million more people by applying an equivalent uplift to those on legacy benefits who have so far been excluded from increases.

Our modelling shows that the total cost of making the lifeline permanent (in addition to normal annual CPI uprating) and extending to legacy benefits would be around £9 billion a year. A significant investment but crucial for our nation’s recovery. We urge the Government to keep doing the right thing, keep families afloat and keep the lifeline.

Yours sincerely,

Action for Children

The Association of Charitable Organisations

Barnardo’s

Become

Bevan Foundation

Centrepoint

Christians Against Poverty

Church Action on Poverty

Citizens Advice

Child Poverty Action Group

Disability Benefits Consortium (a network of over 100 disability organisations)

End Child Poverty Coalition

The Equality Trust

The Fawcett Society

Feeding Britain

Gingerbread

Greater Manchester Poverty Action

Homeless Link

Independent Food Aid Network

Joseph Rowntree Foundation

Lloyds Bank Foundation for England & Wales

Macmillan Cancer Support

The Mighty Creatives

Mind

Motor Neurone Disease Association

The MS Society

National AIDS Trust

National Children’s Bureau

National Education Union

National Housing Federation

Neighbourly

New Horizons

North East Child Poverty Commission

Nourish Scotland

Oxfam GB

The Poverty Alliance

Rethink Mental Illness

The Rt Revd Christopher Foster, Bishop of Portsmouth

The Rt Revd Paul Butler, Bishop of Durham

The Runnymede Trust

The Salvation Army

Save the Children

Scope

Shelter

StepChange

Transforming Lives for Good

The Trussell Trust

Trust for London

Turn2Us

UK Women’s Budget Group

Voluntary Organisations Disability Group

Wales Council for Voluntary Action / Cyngor Gweithredu Gwirfoddol Cymru

Women’s Regional Consortium Northern Ireland

Z2K