Almost £7bn promised for welfare system amid coronavirus outbreak

By Jemma Crew, PA Social Affairs Correspondent

The Government is pumping almost £7 billion into the welfare system to protect people’s incomes during the coronavirus pandemic, the Chancellor has announced.

The Universal Credit standard allowance will be increased by £1,000 a year for the next 12 months, Rishi Sunak said, while the working tax credit basic element will be boosted by the same amount.

The measures to strengthen the welfare system will benefit more than four million of the most vulnerable households, he said on Friday.

But he warned: “I cannot promise you that no-one will face hardship in the weeks ahead.”

Self-employed workers will be able to access Universal Credit payments in full, at a rate equivalent to statutory sick pay eligible to employees.

And the minimum income floor will be suspended for everyone affected, Mr Sunak added.

The Chancellor said the next self-assessment payments will be deferred to January 2021 to further support the self-employed.

The safety net will be further strengthened by extra help for renters who may struggle with payments over the coming months.

The Government is pledging nearly £1 billion for renters through increasing housing benefit and Universal Credit so the local housing allowance covers at least 30% of market rents.

It is also stepping in to pick up “most of” the wages of employed workers.

Mr Sunak told the press conference: “The actions I have taken today represent an unprecedented economic intervention to support the jobs and incomes of the British people.

“A new comprehensive job retention scheme and a significantly strengthened safety net.

“Unprecedented measures for unprecedented times.”

He added: “Now more than at any time in our history, we will be judged by our capacity for compassion.”

Polly Neate, chief executive of Shelter, said: “For the many thousands of people worrying about how they will pay rent, keep the lights on, and keep food in the fridge, today’s announcement will be a great relief.

“These are vital measures to strengthen the safety net and to keep people in work and they will significantly reduce the numbers of people at risk of losing their home.

“We are already hearing from people who are rapidly losing work and we think the Government may need to further increase Housing Benefit to cover average rents as well as introduce other measures to provide crucial security to these workers during this crisis.”