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Social security

#KeepTheLifeline: urging the Government not to cut Universal Credit

This pandemic has shown us that life is full of things we can't plan for, and we all need a social security system we can rely on.

Written by:
Lucy Bannister
Date published:
Reading time:
5 minutes

A cut of £20 a week to Universal Credit, scheduled for 6 October, will impose the biggest overnight cut to the basic rate of social security since the modern welfare state began, more than 70 years ago.

Social security plays a vital role in our society, whether we’re in a national crisis or in ‘normal’ times. Our social security system should protect families from harm. It should help people keep their head above water if they lose their job, if their income is too low or insecure, if they are sick or if their circumstances change. It should protect people from poverty and bring stability, opening up options and opportunities for them to improve their prospects.

In the years leading up to the COVID-19 pandemic, cuts and freezes to social security had already left many families living with constant insecurity. Unable to meet their everyday needs, they are being pulled deeper into poverty.

In March 2020, as we were faced with the economic fallout from the pandemic, the Government recognised that our social security rates were too low. The lifeline families needed to keep them from being swept into poverty had been allowed to wear thin and threadbare. The Government did the right thing and increased Universal Credit (UC) and Working Tax Credit by £20 a week.

However, this £20 a week is scheduled to be cut in October, and around 6 million low-income families will lose £1,040 from their annual income. It would create serious financial hardship and leave 500,000 people to be swept into poverty - including 200,000 children.

Around 6 in 10 of all single-parent families will be affected by this, and despite the Government’s commitment to ‘levelling up’ the impact of the cut will be the greatest across the North of England, Wales, the West Midlands and Northern Ireland.

This is why JRF and many others are saying it would be wrong to go ahead with this cut.

The Government is rightly saying that it wants to support people back into work as we emerge from the crisis. But working families make up the majority of families who will be affected by the cut to Universal Credit and Working Tax Credit.

Despite the introduction of the National Living Wage and record employment, poverty among workers and children was rising in the years before the pandemic. The cuts and freezes to social security over those years played a significant part in this. When we entered the pandemic, the main rate of out-of-work support was at its lowest level in real terms since around 1990 and its lowest ever as a proportion of average wages.

It is widely accepted (including by those who were in Government at that time) that those cuts went too far, and the incomes of the lowest-income families were squeezed too much. The current Government’s decision to increase UC by £20 a week was a recognition that previous levels were no longer adequate. Cutting the system back to those levels and repeating past mistakes would make no sense.

We all need stability and security in order to thrive. It is important to remember that a central role of our social security system is to support and protect people who are unable to work, due to disability, caring, or looking after young children. In our society we believe in supporting each other when we need help to stay afloat. Plunging these families into poverty cannot be right.

Social security should enable families to seize opportunities, to return to work and to improve their lives. UC has the potential to do that. In contrast, struggling to make ends meet, getting into debt and worrying about putting food on the table all add to the currents that pull options out of reach.

The previous six Work and Pensions Secretaries of State, many think tanks, welfare experts and hundreds of charities have said that going ahead with this cut would be wrong. Select Committees, Lords, MPs, the leaders of the opposition parties, religious leaders, health bodies, community leaders and previous Prime Ministers have all also warned against the cut.

The Government must listen to the experts and recognise the need to invest in a strong social security system we can all depend on. It has a choice: cut support by £20 a week, adding to the insecurity people face, or keep this lifeline and the stability families need.

It is not right that people receiving legacy benefits have been excluded from this vital improvement in support.

We are also urging the Government to fix the injustice of people who are still receiving ‘legacy benefits’, such as Employment Support Allowance (ESA), Jobseeker’s Allowance (JSA) and Income Support, being excluded from this crucial improvement in support.

The standard allowance of UC and the basic rates of the older benefits that UC is set to replace have always been the same as they are both meant to cover the same core living costs. It is not right that families on legacy benefits - the majority of which include someone who is sick, disabled or caring - have not had equivalent support purely because they are in another part of the system.

ESA claimants are now legally challenging this decision from DWP, and the case will be heard by the High Court in September.

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