The increase to Universal Credit and Working tax credits at the beginning of the pandemic was an acknowledgement of the need for more support and the fact that these benefits simply aren’t enough to live on. The £20-a-week increase, along with the suspension of conditionality and the minimum income floor, were absolutely necessary to support people through this incredibly difficult time. Levels of support for people in this country when they lose their jobs or cannot work, are significantly lower than in comparable European countries. The Government’s own estimate is that 4.2 million children live in poverty in the UK.
As I am sure you will know, in the Government’s 2021 Budget, delivered on 3 March, the Chancellor announced that UC will be reduced by £20 a week from the end of September. The Secretary of State for Work and Pensions recently confirmed that this remains the Government’s intention.
I believe reducing Universal Credit this April is a terrible mistake for families, for the economy and for our ability to effectively tackle and recover from the pandemic. This £20 a week is not saved by families, but spent in shops and businesses across the country, stimulating the economy. It is very disappointing that the Conservative Government refused to vote with Labour to provide families with certainty and secure our economy.
If the reduction does go ahead, as the Government plans, it will cost six million families an estimated £1,000 a year and support for those out of work will be left at its lowest level in decades. For these reasons, I support maintaining UC at its current levels until it can be replaced with a new social security system which provides a proper social security safety net and has dignity and respect at its heart.
In the meantime, I want to see urgent reforms to UC and the current social security system. These include an end to the five-week wait for a first UC payment and for UC advances to be converted into grants instead of loans. In addition, I believe the UC savings limit, the benefit cap and the two-child limit for UC and tax credits should be abolished.
More widely, I support uprating all six legacy benefits by £20 a week in line with UC. Taking all of these steps would provide immediate support those affected by coronavirus including many people who, as you say, have kept our country running during the pandemic.
I will continue to do all I can to support the continued uplift to Universal Credit, the extension to include legacy benefits and struggling families.