The devastating price of ending the Universal Credit uplift

Removing the £20 Universal Credit uplift could be the biggest overnight cut in benefits ever, according to new research by the Resolution Foundation.

The foundation warned that over a fifth of families in some areas of the UK stood to lose more than £1,000 a year in benefits. For those earning the least, cutting the uplift will look like an income drop of a scale usually only seen in recessions.

This comes after 100 charity and campaigning organisations wrote to the government on 2 September. They urged the government not to cut the uplift to Universal Credit and Working Tax Credit in the October Spending Review.

Huge losses

Rishi Sunak reiterated in July that the uplift was always intended to be temporary. It’s currently scheduled to end on 6 October.

In Yorkshire, the West Midlands, Northern Ireland, London, and the North East, over 20% of families on Universal Credit could lose over £1,000 with the cut. Moreover, the cut will have a bigger impact on certain professions. And hairdressers, shelf fillers, and pharmacy assistants are set to lose the most.

Alongside them, wait staff, nursery and teaching assistants, and retail cashiers could lose more than £1,800 in annual benefits according to new research by Action for Children.

Important new analysis from @actnforchildren on the impact of the Universal Credit cut on a range of jobs.

So many of the people we all stood and applauded last year are among those being hardest hit.

It's not right. #CancelTheCut pic.twitter.com/AbK9W4NRHW

— Steve Rotheram (@MetroMayorSteve) September 6, 2021

“Avoidable hardship”

Increasing pressure has been placed on the government to keep the uplift since it was first introduced in spring 2020.

Labour has spoken out to say the uplift should be maintained, and some Tories have also asked Sunak not to make the cut, including former work and pensions secretary Iain Duncan-Smith.

The letter to the government said cutting the uplift could risk “immense, immediate, and avoidable hardship”.

It added:

We are at risk of repeating the same mistakes that were made after the last economic crisis, where our country’s recovery was too often not felt by people on the lowest incomes. The erosion of social security support was one of the main drivers of the rise in in-work and child poverty, and contributed to a soaring need for food banks, rising debt and worsening health inequalities.

Thousands at risk of poverty

The chancellor first introduced the £20 uplift to help people on benefits through the financial difficulties caused by the pandemic. Recent analysis by the Joseph Rowntree Foundation estimated removing it could cause 500,000 people to fall into poverty.

A spokesperson for the government told PA:

As announced by the Chancellor at the Budget, the uplift to Universal Credit was always temporary.

It was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so.

Universal Credit will continue to provide vital support for those both in and out of work, and it’s right that the Government should focus on our Plan for Jobs, supporting people back into work and supporting those already employed to progress and earn more.

Among the 500,000 at risk of poverty are 200,000 children. According to the JRF, in real terms the cut could take out-of-work support down to its lowest since the 90s.

Labour MP Zarah Sultana said this morning:

This is what class conflict looks like: The Conservative Party – led by an Oxford Bullingdon boy, its Chancellor the richest MP, its Cabinet 65% privately educated, & funded by the super-rich – plan to cut Universal Credit & push 500,000 working class people into poverty.

Featured image via YouTube/Telegraph & Flickr/Paisley Scotland