Chancellor Rishi Sunak is reportedly considering giving a one-off Universal Credit payment of £1000 in a money-saving attempt to boost the economy.
However, the temporary weekly £20 increase in UC payments, introduced to support claimants during the pandemic, will stop by April 12th.
Some are speculating that Sunak is doing this in an attempt to quell a backbencher rebellion. MPs based in the Labour heartlands have consistently criticised the government’s mishandling of the pandemic and linked it to the failing economy.
The pandemic has resulted in the British economy facing a severe recession which has led to mass unemployment and a 35% increase in people seeking financial support applying for Universal Credit up to October last year.
Offering a one-time payment of £1000 does very little to tackle the real problem of unemployment, more permanent solutions such as a reduction in taxes to boost income would be better fit to help people throughout the pandemic.
The Downpayment of Universal Credit
UC was introduced as a catch-all benefit payment that was supposed to streamline the benefits process. In reality, it led to many claimants experiencing a drastic decrease in payments and financial stability.
Currently if someone on benefits applies for UC, their other benefit payments stop even if their application is unsuccessful.
This means a claimant would have to reapply for their previous benefit, which could be denied, running the risk of having no income.
Offering a one-time payment of £1000 does very little to tackle the real problem of unemployment
Furthermore, applying for benefits is not a quick process. A claimant’s benefits are stopped the moment they send an application for UC, therefore, they have no money coming in while waiting for a response to their UC application. This could take up to five weeks or longer, pushing people into debt or going without food.
Ben Sudder was a single-father before he moved into a house with his girlfriend who now have another child together. Before he moved in with his girlfriend, he was claiming tax credit.
Now that they are claiming UC together, Mr Sudder is financially in a worse position to support his children, he says: “I hate universal credit, since me and my girlfriend got together it makes us worse off each month compared to when I was a single dad on tax credit, it’s a joke.
Some are speculating that Sunak is doing this in an attempt to quell a backbencher rebellion
Kaihmen, a single mother of two, told ImmiNews how the regulations around UC and employment are making her struggle, she says: ‘I’m being forced to live under extreme conditions, no radiators, rising damp and a leaking roof for the second winter.’
‘I have to get sent jobs to apply to daily, otherwise I don’t get paid even though I have a job I’m waiting to go back to as soon as my kids are back in school. I struggle on universal credit but I’m not entitled to furlough.’
Backbench Rebellion Threat
The government is currently in a very difficult parliamentary position as they face a backbench rebellion from the Labour side combined with their own Tory revolt.
Many MPs have called for the extra £20 for UC to be extended far beyond April, despite Mr Sunak warning that it will cost the government £6B a year.
Mr Sunak would do well to remember that throughout the pandemic, the government has wasted £10B on its failed test & trace programme which otherwise could have supported those hit the hardest by the pandemic.
Helping the poorest in Britain shouldn’t be narrowed into cost-cutting tactics and budget handling manoeuvres. By playing to the agenda of his party, Sunak is putting people’s lives at risk. Since the beginning of the pandemic 14.5million people were moving into poverty and studies from JRF show this will increase in 2021 if the government removes support.
Currently, families are stuck in limbo as they wait on the government’s decision to continue the extra support or not. By not making a quick and decisive decision on Universal Credit, Sunak is prolonging the hardship that people are experiencing. Rather than using the support they depend on to appease the Tory backbench, it could be part of a wider conversation about implementing reforms and the future of social security.
[Header Image: Cubankite, Shuttershock]