Sunak’s Spending Review a ‘major blow’ for families on Universal Credit

Millions of families on Universal Credit are facing “agonising uncertainty” after the Government’s spending review did not address calls for benefit increases to be extended, charities have warned.

Since April this year, Universal Credit claimants were given a £20-a-week boost in response to the coronavirus pandemic.

The temporary measure is due to come to an end in April 2021, prompting charities to call on the Government to extend and even make permanent the welfare increase beyond the impending deadline.

However, Chancellor Rishi Sunak did not address these calls when he set out his one-year Spending Review at the House of Commons, leading to community figures urging him to reconsider.

Youth homelessness charity Centrepoint said it had argued strongly for the retention of the £20 uplift in Universal Credit, which has made “a huge day-to-day difference for thousands of unemployed young people”.

Paul Noblet, head of public affairs at Centrepoint, said: “The government’s failure to commit to retaining the current uplift in Universal Credit is hugely disappointing and will weigh heavily on the minds of millions of people for whom the £20 a week increase has made a huge difference.

“There is still time for the government to reflect on this issue between now and the end of March and we urge them to think again.”

Director of policy and campaigns at children’s charity Action for Children, Imran Hussain, said: “It’s not right that low-income families face a £1,000 cut to their Universal Credit help from next year – adding even more stress to a second lockdown, the arrival of winter and with Christmas around the corner.

“The Government must put this right – right now – to prevent a generation of children from being scarred by poverty and the pandemic which would carry significant long-term costs to the public finances.”

Charity Turn2us, which helps people in financial hardship, said the Spending Review does not go far enough for low income households.

Thomas Lawson, chief executive at Turn2us, said: “For a society that believes in compassion and fairness, the lack of commitment to maintaining the vital £20 uplift to Universal Credit will make it impossible for so many of us to get back on our feet.

“Our own research into people’s financial resilience shows how one in three of us have had to rely on credit since the pandemic took hold.

“We urge the Government to prevent a rising tide of destitution.”

Their sentiments were shared by the Disability Benefits Consortium (DBC), a network of more than 100 charities and organisations including the MS Society, Z2K, Disability Rights UK and Inclusion London.

(PA Graphics)

Anastasia Berry, policy co-chair of the DBC and policy manager at the MS Society, praised the Government for recognising the extra help Universal Credit claimants needed during the crisis, but added: “Those on legacy benefits, like Employment and Support Allowance and Jobseekers Allowance, were disgracefully refused the same financial lifeline.”

She added: “Instead, for eight months, around two million disabled people have been discriminated against, leaving them struggling to eat a cooked meal a day, pay to heat their homes and get vital medical treatment.

“Despite multiple letters and a 119,000-signature-strong petition sent to the Chancellor to call for a £20 a week increase, today’s spending review was another example of the Government refusing to acknowledge the financial challenges these disabled people are facing as a result of this pandemic.

“Granting them an additional 37p – in line with inflation – has left us lost for words.”

James Taylor, executive director of strategy at disability equality charity Scope, said: “Disabled people have been forgotten time and time again since the pandemic began.

“The stark omission of a longer uplift to Universal Credit, and of the refusal to extend this to legacy benefits, is an example of how disabled people are being forgotten again.”

Stephen Timms
Stephen Timms, Labour MP for East Ham and chairman of the Work and Pensions Committee (Anthony Devlin/PA)

The chancellor was also criticised by Stephen Timms , Labour MP for East Ham and chairman of the Work and Pensions Committee, who described the omission of benefit rates in the Spending Review as a “major blow”.

He said: “Millions of people on Universal Credit are now facing the Christmas period in agonising uncertainty, not knowing whether the Government will cut their income by £20 a week next April.

“Meanwhile, those on older benefits, who have already missed out on the rise because the DWP’s systems are too old-fashioned, will receive an increase of just 0.5% next year.

“The Government must think again. If it doesn’t – some of the most vulnerable people in society will be faced with a tough winter with no additional support.”

In a written ministerial statement on Wednesday, Work and Pensions Secretary Therese Coffey did not say whether the Universal Credit uplift will be extended, but said the Government will “look at the economic and health context in the new year”.

On whether the temporary measure will be reviewed in the new year, a spokesman from the Treasury said it was “not ruling anything out for the future” as it waits for “more clarity on the national economic and social picture”.