- Work and Pensions Committee calls for year-long extension of
increase ‘at the very least’
- Removal in April while pandemic still being felt would plunge
hundreds of thousands of families into poverty
- Any plans to replace rise with one-off payments must be
abandoned amid concerns over fraud and impact on vulnerable
The Chancellor must maintain for another year ‘at the very least’
the £20 per week increase in Universal Credit (UC) and Working
Tax Credit introduced to support families during the coronavirus
pandemic, MPs say today.
The report from the Work and Pensions Committee
notes that since March the number of people claiming UC has
doubled to around six million, while job vacancies remain far
below pre-pandemic levels. It warns that removing the payment as
planned in April, while the effects of the pandemic are still
being felt, would ‘plunge hundreds of thousands of households,
including children into poverty’ while dragging those already in
poverty ‘down into destitution’.
While the Committee recognises that continuing with the increase
would come at a ‘substantial cost’, the Committee argues that
this should be seen in the context of the Treasury’s own £280bn
figure for total spending on coronavirus support measures this
year. The Joseph Rowntree Foundation has estimated that keeping
the £20 rise would cost around £6.4bn in the next financial year.
The report also calls on the Government to abandon any plans for
one-off payments to replace the weekly rise. The Secretary of
State confirmed to the Committee last week that the DWP had been
asked to investigate such an option but said it was not ‘one of
the Department’s preferred approaches to providing that financial
support’.
The report has been published after evidence sessions with
frontline support
organisations and policy experts and the Secretary
of State and Permanent Secretary last week.
Rt Hon MP, Chair of the Work and Pensions Committee,
said:
“Removing the extra payment in March would represent a
failure by Government – failure to recognise the reality of
people struggling. Without regular support, hundreds of thousands
of families will be swept into poverty or even destitution.
Government must end the uncertainty and commit to extending this
lifeline.
The Chancellor faces difficult decisions about the public
finances. He may find it hard at present to make the increase
permanent. But the pandemic’s impact on the economy and
livelihoods will, sadly, be with us for some time. An extension
for a year should be the bare minimum.
We must also hope that will listen to the groundswell of arguments against
one-off payments as an alternative, including from his cabinet
colleague at our Committee last week. There is broad agreement
that a steady income is necessary to support people.”
Report findings and recommendations
Impact of removing the £20 per week increase (Chapter
2)
- Analysis by the Joseph Rowntree Foundation (JRF) has
concluded that withdrawing the temporary increase ‘will risk
sweeping 700,000 more people, including 300,000 more children,
into poverty’
One-off payments (Chapter 3)
- The Committee shares the Secretary of State’s view that a
steady income is the best way to support people and is concerned
that one-off payments could increase the risk of fraud and about
the risks to vulnerable people.
The proposed way forward (Chapter 4)
- The Committee has
previously called on the Government to make the £20 per
week increase permanent with annual inflation-based increases.
The report acknowledges however that ‘in the short term, the
Chancellor faces some very difficult decisions about the public
finances amid a great deal of uncertainty about the future.’
- If the Chancellor cannot yet commit to making the increase
permanent, he should at the very least extend it for a further 12
months. The Government should then announce its future plans for
the rate of Universal Credit no later than the Autumn Statement
2021, to give claimants enough time to plan and budget.
