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Executive Leader Cllr Brenda Warrington

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Councillor Brenda Warrington, Executive Leader of Tameside Council

A Cruel and Unjust Cut

Tuesday, 28 September 2021

Universal Credit doesn’t work.

Not only does it fail to protect people from severe financial difficulty, in many cases its complex bureaucracy and punitive sanctions regime actually forces them away from the job market altogether. Over the years a number of other local authorities and organisations such as the Economic and Social Research Council and Parliament’s own Work and Pensions Subcommittee have backed that conclusion up.

 

However, the impact of the coronavirus pandemic meant that more people than ever have relied on Universal Credit as a financial lifeline. The government’s own figures showed that the number of claimants doubled from 3 million in February 2020 to 6 million in May 2021. Despite this the government has all but confirmed that it will be cutting weekly Universal Credit payments by £20 at the beginning of October.

£20 a week might not sound like a lot to some people. But if it goes through, it will literally be the single biggest overnight cut to the benefits system in history. You have to go back to the reduction in housing benefit in 1988, or the 1931 cut to unemployment support during the Great Depression to find anything else that even comes close.

The consequences for some of our most financially vulnerable families will be nothing short of devastating. For those people, £20 a week has literally been the difference between eating and going hungry. The Child Poverty Action Group estimates that more than 300,000 children will be forced into poverty, taking the total child poverty rate in the fifth-richest country in the world to a staggering 1 out of every 3. Neither will these grave repercussions be felt the same way across Britain. The impact of the cut will almost certainly be worse in more deprived areas, making a mockery of the government’s claims of “levelling up”.

The government would have you believe that anybody affected by the cut can just find a new job or work more hours, but this myth does not reflect the reality of poverty in Britain today. Almost 40% of those currently in receipt of Universal Credit are in work, meaning that they are relying on the benefit to supplement a wage that is not enough for them or their family to live on. Furthermore the “taper rate” of Universal Credit, or the amount of benefit that you lose the more you work, means that the financial gain for working an extra hour can sometimes be as low as £2.24. For many people, especially those looking after children, there will simply not be enough hours in the day to make up the difference.

 

But the fallout will spread far beyond the effects of the cut itself. It is becoming increasingly clear that this winter is likely to see an extraordinary squeeze in cost of living. As well as the reduction to Universal Credit, the government is also ploughing ahead with an increase in National Insurance Contributions that will hit young people and those on low incomes the hardest. Rising inflation and disruption to supply chains mean that the prices of basic necessities such as food and gas are going up as 2021 draws to a close. Many families are also likely to still be struggling with debt or other financial pressure as a result of the coronavirus pandemic. As households up and down the country face a perfect storm of higher costs and lower incomes, the government’s only response seems to be to throw more fuel onto the fire.

From the very beginning of the coronavirus pandemic, I have said that our national mission must be to build back not only better, but fairer as well. If the government continues with an unprecedented and unjustifiable cut to Universal Credit, it will only confirm that they have learnt nothing from the past eighteen months. Where there should be more investment, more equality and more kindness, we are instead being given more austerity, more injustice, and more cruelty. The time has come, for the sake of our country’s future, to say that enough is enough.  
 

 

Posted by: Executive Leader


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