Opinion

Claire Simpson: Back to Tory austerity as Universal Credit cut threatens to push thousands into poverty

The government aims to scrap extra £20 weekly Universal Credit payments
The government aims to scrap extra £20 weekly Universal Credit payments The government aims to scrap extra £20 weekly Universal Credit payments

We were always going to pay for the Tories’ professed largesse during the pandemic.

The introduction of furlough and a £20 weekly increase in Universal Credit payments were only a stop-gap, the government frequently reminded us, lest anyone would think austerity was over.

As a government spokesman said last week "the uplift to Universal Credit was always temporary".

“It was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so.”

Obviously the pandemic is now over, life is completely back to normal and, economically, everything is fine.

The £20 uplift will start being phased out from the end of this month, although it will hit most of the 118,510 households in the north who are on Universal Credit at the start of October.

Save the Children and the Child Poverty Action Group have already warned that an extra 11,000 children in the north could fall into poverty if the cut goes ahead.

In the UK as a whole, the cut could push 500,000 people into poverty, including 200,000 children, research by the Joseph Rowntree Foundation has suggested.

It is rare that a government proposal manages to unite such a diverse range of opponents but the planned cut has done just that.

The north’s communities minister Deirdre Hargey, Scotland’s social justice secretary Shona Robison, Welsh social justice minister Jane Hutt, MPs across the political spectrum, six former work and pensions secretaries, charities, think tanks, teachers have all called on work and pensions secretary Therese Coffey to axe the plan.

Late last week, a coalition of 100 groups also asked Prime Minister Boris Johnson to abandon the plan, calling it "the biggest overnight cut to the basic rate of social security since World War II”.

The Universal Credit system is itself a mess. The flagship of Tory welfare reforms, it was supposed to streamline the complex benefits system by combining six benefits into one.

Instead, it caused severe financial hardship for claimants, pushing some into rent arrears due to long delays in setting up initial payments.

Benefit assessments are frequently less than transparent and many claimants do not fully understand how their claims are dealt with or feel able to challenge any decisions.

Anyone who has ever looked at a benefits form knows they can be needlessly complex.

The system is not even good value for money.

In 2018, the National Audit Office (NAO), which scrutinises public spending for Westminster, found that Universal Credit cost more to administer than the previous system.

The report also noted that the government's expectation that Universal Credit will bring in an annual net benefit of £8 billion “remains unproven”.

The government’s reasoning for cutting benefits is that it will encourage more people to either find work or increase their hours.

The north and Britain have reported a high number of job vacancies in recent months. But how many of these jobs actually pay enough for people to survive?

Furlough, which will end this month, has undoubtedly affected the job market.

And it will be impossible to get a true picture of unemployment rates until we see the impact of the end of furlough - which may not be known for several months.

Of course cutting benefits is one easy way of attempting to claw back the £66 billion spent on furlough.

In case we thought Covid payments were a sign of a more generous Tory party, the government’s ‘back to work’ line put us firmly back in the 1980s.

In 1981, then secretary of state for employment Norman Tebbit told the public to “get on your bike and look for work” at a time of mass unemployment.

Chancellor Rishi Sunak certainly has a less abrasive style than Tebbit.

But the multi-millionaire, who is married to the daughter of an Indian billionaire, does not like to cycle outside himself, preferring to use an indoor Peloton bike (£2,000 plus a monthly subscription to fitness classes).

Slashing people’s benefits by £20 a week - a huge amount of money for most families - is a false economy.

If half a million families fall into poverty, the knock-on effect will be devastating.

We have already suffered a decade of Tory austerity and with it a widening of the gap between rich and poor. The next ten years cannot be more of the same.