£20 cut in benefit will push 730k kids into poverty
Tory MPs ordered to abstain in vote to stop struggling families losing £600 a year
STRUGGLING families could suffer a £600 hit to their incomes in 2021-22 if ministers press ahead with plans to cut Universal Credit by £20 per week.
Labour leader Sir Keir Starmer demanded certainty for millions of families fearing a cut to their benefits in April, as a report by the Resolution Foundation warned that removing support could plunge a further 730,000 kids into poverty over this parliament.
Analysis by the think-tank shows withdrawal of the Universal Credit uplift would mean poor families could see their real incomes fall by more than four per cent – or by £600 – in 2021-22.
This would push relative poverty from its current level of 21 per cent to 23 per cent by 2024-25, it added.
Karl Handscomb, senior economist at the Resolution Foundation, said the decision over the £20 weekly boost would “help define whether this is to be a parliament of ‘levelling up’ living standards, or pushing up poverty”.
Labour will force a Commons vote on making the uplift permanent today – but Tory MPs have been ordered to abstain.
Conservative MPs in Red Wall seats broke ranks last week to urge Chancellor Rishi Sunak not to cut Universal Credit in lockdown.
Liberal Tory think-tank Bright Blue also warned that the poorest areas would be the hardest hit.
It found the most deprived 10 per cent of English local authorities saw an average 8.5 per cent increase in Universal Credit claims in the first eight months of the pandemic, compared to a 4.8 per cent increase for the least deprived 10 per cent of areas.
Starmer said: “Millions of people have had to juggle childcare with working from home, have seen jobs or incomes cut or been excluded from self-employed support.
“If we don’t give a helping hand to families through this pandemic, then we are going to slow our economic recovery as we come out of it.”
Foreign Secretary Dominic Raab hinted that the uplift – amounting to £1040 a year – would be axed this spring, saying it was always a “temporary” measure.
The Government currently plans to cut the basic monthly allowance from £409.89 to £324.84 on April 12, with a final decision in the March Budget.
Shadow Work and Pensions Secretary Jonathan Reynolds slammed reports that the Chancellor was planning to replace the cut with a £500 one-off payment.
He told Sky’s Sophy Ridge on Sunday: “The reason that a one-off payment is a bad policy is because while we’re talking about six million families being affected, those families will change throughout the year – some will go back into work, some will come out – we’ve had, at times in the pandemic, 200,000 new claimants coming on to the system in a single month.
“So, a one-off payment, a snapshot, completely fails to support those people. There is simply no reason that this cut should take place in April.”
SNP work and pensions spokesman Neil Gray MP said: “Tory plans to cut Universal Credit for millions of families are utterly cruel and would push people into poverty at the worst possible time – in the middle of a recession and growing Tory unemployment crisis.
“The fact that the Chancellor is even considering cutting the incomes of six million people further exposes the broken Tory promises of ‘levelling up’ as nothing but empty lies – and follows Tory plans to impose a public sector pay freeze on millions of workers.
“Rishi Sunak must perform a U-turn, make the £20 uplift permanent and extend it to legacy benefits – as part of a wider package of measures to boost incomes after a decade of Tory austerity cuts, which have increased poverty.”
Labour will also urge MPs not to extend the “catalogue of chaos” on free school meals by forcing a Commons vote to guarantee needy children get the full value of the meals in the holidays.