Big Issue Vendor

Chancellor has just ‘postponed the pain’ for poorest with benefits extension

Charities have accused the Chancellor of planning to 'snatch' back £20 a week in six months time with the Budget Universal Credit extension
Image credit: Alaur Rahman/Pexels

The Chancellor’s decision to keep the £20-a-week uplift to Universal Credit until the autumn has been criticised by anti-poverty charities, who say it leaves the poorest families facing months of uncertainty.

The £20 benefit raise was introduced as a temporary emergency measure at the start of the pandemic to help struggling families, and was due to end in April. The extra money, which is worth £1,040 a year, supported six million households . 

Rishi Sunak failed to “meet the moment” said campaigners who appealed to extend the top-up for at least another year.

Alison Garnham, chief executive of Child Poverty Action Group, warned the six-month extension would only “postpone the pain” of families saying that “poverty levels were already too high pre-pandemic yet children and parents were noticeable by their absence from this Budget. “Extending the £20 uplift is vital because struggling families cannot keep afloat without it, but that will be as true in six months as it is now. This decision only postpones the pain. The chancellor promised certainty to business – children and their families deserve no less,” she added.

Helen Barnard, director of the Joseph Rowntree Foundation, said it was “unacceptable to cut the incomes of millions of families by £1040-a-year in six months’ time”. 

She said: “He [Sunak] said this Budget would “meet the moment” but this decision creates a perfect storm for the end of this year, with the main rate of unemployment support cut to its lowest level in real terms since 1990 just as furlough ends and job losses are expected to peak. This makes no sense and will pull hundreds of thousands more people into poverty as we head into winter. extension comes to an end this winter.”

Morgan, who has been supported by the youth homelessness charity Centrepoint, has been on Universal Credit for two years. He told The Big Issue that the benefit remains too low to live on even with the £20 increase.

The 22-year-old from Cullingworth near Bradford, West Yorks, said he’d gone more than a week and a half without food at times in the pandemic, relying on a few tins of beans or soups to survive.

He said: “It should have been more towards £40 or £50 added instead because that would have been more beneficial but I don’t think the government have realised the cost of living. To get through a week on a decent amount of food you are talking about £30 to £40.

“I don’t personally see a future right now for myself due to the cycle I find myself stuck in with not having enough money, not having a place to move on to, not being able to get a job. I can’t really think of what I want for the future, it’s a case of survival.”

The benefit has not kept pace with inflation, analysis has shown. If it returns to pre-pandemic levels once the increase ends, it will be worth 11.5 per cent less in real terms than when it was introduced, according to Citizens Advice Scotland.

Six million people claim Universal Credit, official Government figures show, which is double the number who received the benefit before Covid-19 hit the UK. 

The number of people claiming Universal Credit grew by 270,000 in just the last three months, demonstrating that “the economic consequences of this pandemic are still in full swing,” according to James Grier, director of external affairs at anti-poverty charity Turn2us.

446 people made a new claim for Universal Credit every hour in the first week of 2021.

Labour leader Sir Keir Starmer responded saying the Chancellor had been “dragged, kicking and screaming to extend the £20 up lift in the Universal Credit but only for a few months. Once again deferring the problem as a result insert and the the threat of of losing £1,000 a year still hangs over 6 million families.”

While Sunak refused to make the £20-a-week uplift permanent, he also failed to include those on legacy benefits, including Employment and Support Allowance, Jobseeker’s Allowance and Income Support—and people who are sick or have a disability.

Ella Abraham, policy and campaigns officer at Z2K and co-chair of the Disability Benefit Consortium said that “the Chancellor’s silence on the issue of increasing legacy benefits by the same £20 per week increase that those on Universal Credit have seen at the Budget today was indefensible.”

She said: “It leaves the 1.9 million disabled people and others on very low incomes still facing impossible decisions like whether to pay for medicine or food.”

James Taylor, from Scope added that “this creates the very real risk of plunging many disabled people into poverty. Scope want to see this uplift made permanent, and extended to legacy benefits.”

People with cancer also miss out on the extra money, which would be a lifeline, said Macmillan Cancer Support.

Head of campaigns and public affairs Eve Byrne, said that “many people with cancer were already struggling with the financial impact of their condition before Covid-19. From affecting their ability to work to increased costs like transport to medical appointments, cancer often comes with a hefty price tag.”

As the Covid pandemic continues to cause long-term financial difficulty, there was hope there would be more to alleviate the pressures on families with less money coming in. With unemployment already at its highest rate since 2016, the Office for Budget Responsibility forecast it would continue, and reach 6.5 per cent this year.

Action for Children’s director of policy and campaigns, Imran Hussain, said “there’s no faster way to push more children into poverty than by snatching £20 a week out of the pockets of the poorest families in the country. He said: “It makes no sense to cut this lifeline in six months when the furlough scheme will have ended and unemployment is expected to be near its highest – exactly when families will need it most. Families need help and certainty, not a stay of execution.”

Emma Revie, chief executive of the Trussell Trust, said “in September, we know removing the uplift could drive more than one million people to food banks and many more people are expected to need Universal Credit as unemployment rises.”

Alistair Cromwell, acting chief executive of citizens advice, said families faced a challenging recovery ahead of us, this is a stopgap. “A six-month extension kicks the can down the road, only to leave millions facing a financial cliff edge in the autumn,” said.