Millions of Britons will face the biggest overnight cut to the basic rate of social security since the Second World War, if the government pushes through with slashing Universal Credit payments as planned at the end of September.
The Joseph Rowntree Foundation (JRF) has warned that half a million people will be pulled into poverty with the stroke of a pen come September 30, the date Universal Credit will be cut, including 200,000 children. More than 6m people will be affected by the planned cut of £20 a week to Universal Credit.
The government has justified the cut by arguing that the extra £20 a week to Universal Credit payments was introduced as an emergency measure last April and was only ever meant to be temporary.
But unions including Unite, anti-poverty campaigners and many others have warned that the basic rate of Universal Credit was already far too low to begin with after years of cuts and freezes.
A new analysis by the JRF has found that a typical family with three children, living in a medium-cost area, with one parent working full-time and the other part-time, will be plunged further into poverty if the planned Universal Credit cut goes through.
In 2013/14, this illustrative family would have been £271 a month above the poverty line, but thanks to cuts and freezes over the years, by 2020, even with the extra £20 a month, they were pulled below the official poverty line. If the cut goes through in October, the family will be plunged £150 a month below the poverty line.
And while prime minister Boris Johnson has insisted that the planned cut is part of a new “emphasis” on “getting people into work”, the JRF report found that those who will be hardest hit by the cut are in fact working families.
The JRF analysis also found that families with children will be disproportionately impacted, with 6 and 10 of all single-parent households seeing their yearly income plummet by more than £1000 a year directly because of cuts to Universal Credit or similar cuts to Working Tax Credit.
Commenting, JRF deputy director of policy and partnerships Katie Schmuecker said, “Universal Credit has been a lifeline that has helped keep millions of heads above water, but the new analysis should act as a stark warning of the immense, immediate and avoidable consequences of what amounts to the biggest overnight cut to the basic rate of social security since the Second World War.
“We all accept governing is about priorities but cutting the incomes of millions of the poorest families and sucking money out of the places in which they live flies in the face of the Government’s mission to level up our country,” she added.
“This is not about generosity, it’s a matter of investing in families so they have the dignity of being able to meet their needs and supporting everyone in and out of work to escape poverty.”
Unite Community has spearheaded a long-running campaign to stop the cut to Universal Credit, and helped lead a successful push to delay the cut earlier this year. Unite Community plans to ramp up its campaign in the coming weeks and months.
Commenting, Unite assistant general secretary with responsibility for Unite Community Steve Turner said, “The determination to rob the poorest workers and families of £20 a week from October is heartless and economically irresponsible.
“The majority of those on Universal Credit are in work but earning too little to get by because poverty pay has exploded under a decade of Conservative rule,” he added.
“Food and living costs are rising and the chaotic bungling of the re-opening of the economy means we cannot be assured of a return to any so-called normal,” Turner continued. “That £20 is a lifeline during this continuing uncertainty and removing it will cause certain despair.
“September 30 this year is set to be a bleak day for workers and our communities with the cut and the end of furlough,” he went on to say. “It will go down as the day that this Tory government threw hundreds of thousands of working and vulnerable people and children under the bus.”
By Hajera Blagg