AA dispute around the cabinet table in the spring ended in a compromise: The £ 20 per week added to universal credit at the start of the pandemic would neither be withdrawn nor made permanent. It would be extended until September. With just two weeks to go until the end of the parliamentary session, time is running out for Chancellor Rishi Sunak to lift the threat to 5.6 million applicants: after the summer they will be poorer by more than £ 80 per month.
Six former secretaries at work and pensions, including Amber Rudd and Sir Iain Duncan Smith wrote to Mr. Sunak on weekends, pleading for the continuation of the increase. It also reflects the perspective of the current incumbent, Therese Coffey, and the conservative peer who helped craft universal credit, Lord Freud. But so far the Treasury seems determined to push back all advances and stick to its ruthless claim that cutting weekly payments to £ 74.59 will help get people back to work.
The reality is much less acceptable than this fiction. Millions of people have been plunged into extreme hardship by the pandemic: To be eligible for Universal Credit in the first place, applicants must have savings of less than £ 16,000. Many have nothing to fall back on at all. Demand for food aid has reached unprecedented highs, with 2.5 million packages distributed by the Trussell Trust, the UK’s largest food bank, in the pandemic’s first year. Families with children who depend on allowances to pay their rent, energy and supermarket bills are also hardest hit by school closures. Students with fewer resources of all kinds outside of school are known to be among the biggest losers of the past year, with an education gap that may never be made up, especially given the government’s refusal to fund an adequate remedial program.
The instincts of the chancellor, and those of his department, are wrong. After spending £ 22bn on a test and traceability program that fell short of its targets, it is irrational and petty to refuse to shell out the £ 6bn a year that the £ 20 increase would cost sterling. Poverty is bad for people, making them sick and unhappy. A growing gap in obesity rates between the poorest and the richest, revealed by King’s Fund research, is just the latest example of a growing gap in experiences and opportunities that is hallmarked. of an unjust society. A new poll for the Center for Policy Studies shows people think politicians don’t understand the economic pressures they face.
The prospect of a decline in universal credit is not the only danger. A £ 40million cut in the discretionary housing payments budget, given to troubled tenants by city councils but funded by central government, is expected to lead to an increase in evictions and homelessness. The benefit cap, including the two-child limit, leaves large families with no way to close the gap between income and costs. Last year the number of households affected by the ceiling jumped 100,000.
The £ 20 increase was not a panacea and still is not. About two million people who have yet to switch to the new system did not take advantage of it. But even right-wing think tanks believe cutting payments is now the wrong decision. Mr. Sunak should listen to the welfare experts and ignore the hardliners at the Treasury and at the cabinet table. If he doesn’t, the prime minister must ignore it.