'The chancellor has to think again'

The government has refused to listen to calls from anti-poverty campaigners, unions and even many of its own ministers after it announced it would plough on with a devastating cut to Universal Credit this autumn.

The government confirmed on Wednesday (July 7) night that it would press on with plans to cut the £20 a week increase to Universal Credit payments, which was first introduced last April as an emergency measure in response to the pandemic and subsequent lockdowns.

Earlier this week, UniteLive reported how six Tory ex-welfare ministers, including former work and pensions secretary and architect of the Universal Credit system Sir Iain Duncan Smith, had called on the government to make permanent the £20 a week increase to Universal Credit.

Duncan Smith was joined by all five of his successors, including Damian Green, Stephen Crabb, David Gauke, Esther McVey, and Amber Rudd in writing a joint letter to chancellor Rishi Sunak urging him to halt plans to cut Universal Credit payments at the end of September.

“As the economy reopens, and the government re-evaluates where it has been spending money, we ask that the current funding for individuals in the universal credit envelope be kept at the current level,” the ex-welfare ministers wrote in their letter to Sunak.

“We ask that you protect the investment in universal credit, to strengthen work incentives for those who can work and support more generously those who cannot work,” the letter continued.

But Sunak and the government have failed to heed their calls, with current work and pensions secretary Therese Coffey telling the work and pensions committee that Universal Credit payments will face “adjustment” in the autumn.

 “Ahead of October we will start communicating with the current claimants… to make them aware that will be being phased out and they will start to see an adjustment in their payments,” she said.

Meanwhile, prime minister Boris Johnson told the liaison committee that the government was justified in cutting Universal Credit as lockdown restrictions eased.

“As we move beyond [Covid restrictions], we have to have a different emphasis, and the emphasis has to be on getting people into work and getting people into jobs. That’s what we’re doing,” he said.

But critics have highlighted that a huge proportion – about 40 per cent – of Universal Credit claimants are already in work. Earlier this week, Unite assistant general secretary Steve Turner noted that the problem is “not the £20 but the epidemic of poverty pay in this country,” as he highlighted the significant number of employed people on Universal Credit.

Critics have also warned that cutting Universal Credit, especially at a time when the economy has far from recovered, will be a devastating blow to millions of struggling families who face losing £1000 a year.

The Joseph Rowntree Foundation estimates that the impending cut would push half a million people, including 200,000 children, into poverty. Separate research from the House of Commons library estimated the number of children plunged into poverty as a result of cutting Universal Credit could top 420,000.

Labour highlighted that if the impending cut were to go through, jobless benefits would be at their lowest level in 30 years. Commenting, shadow work and pensions secretary Johnathan Reynolds said, “There is near-universal opposition to this cut, including from prominent Conservatives. It is time the government saw sense, backed struggling families and cancelled their cut to universal credit.”

Unite Community continues to make the case that Universal Credit payments are already far too low – even with the £20, the basic Universal Credit rate is worth just a sixth of average weekly pay. Unite Community is now ramping up its campaign to keep the £20 a week lifeline – branches across the country will hold a day of action on July 14.

Unite assistant general secretary with responsibility for Unite Community Steve Turner said, “This is the news struggling families have been dreading. This cut will cause so much hardship and despair because that £20 was the difference between heating and eating. 

“It also makes no economic sense to pull cash from the economy at a time when the recovery is fragile,” he added.

“That money is spent locally in our struggling high streets, yet the chancellor is draining support away from them at a time when they, too, need every penny,” he continued.

“The grim reality is that work doesn’t pay in this country. The chancellor should be focusing on halting the march of poverty pay, not taking £20 from those most at need.

“Even before the pandemic, child poverty was a deeply entrenched problem in the UK – for the government to consign a further 420,000 children to hunger and hardship is a scandal.

“Vulnerable children will suffer. The chancellor has to think again.”

Stay tuned on UniteLive for more information about Unite Community’s upcoming day of action on July 14. In the meantime, visit our campaign page to find out more about how you can get involved.

By Hajera Blagg