Universal Credit UK: Rishi Sunak urged to ‘think again’ during debate on £20 uplift vote
Universal Credit: Reynolds warns against removing uplift
Universal Credit payments received a boost from Rishi Sunak in early 2020, as the Chancellor raised payments by around £20 a week in response to coronavirus. This uplift was only meant to last for a year and Boris Johnson recently detailed it would not be extended but today, the Labour party forced a vote on this and the motion was debated in parliament.
Jonathan Reynolds, the Shadow Secretary of State for Work and Pensions, opened the debate and took questions from the opposition.
He was then asked for Labour’s position on the Universal Credit uplift, whether it should be made permanent and if so how would the cost be covered.
In his response, Jonathan noted focusing on public debts in the current environment would be the wrong thing to do: “So, we believe this uplift should stay in place during the crisis and I don’t think anyone believes the crisis will end in April.”
Jonathan moved on to how the cost should be addressed: “This is a significant cost, it’s around £6billion that would vary depending on the levels of unemployment that we would see throughout the year.
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“But I would say to all Honourable Members, any measure right now that cuts public spending or raises taxes in the middle of what is the biggest economic downturn for 300 years, would be the wrong policy.”
Jonathan detailed the public debt would have to be addressed in the coming years but he argued, somewhat paradoxically, that if the uplift was removed it could actually damage the economy.
He continued: “Cutting Universal Credit is like pulling the rug from under the economy’s feet. This 20 pounds a week it’s not saved by families.
“It’s spent in shops and businesses across the country stimulating the economy.
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“Now, we all agree that this pandemic and the unemployment crisis will not be over by April this year and whatever protestations we’ve heard on social media and the press and frankly, however people vote today, I know there are many people on the benches opposite, who agree with this case.
“The former Secretary of State for Work and Pensions the member for Preseli Pembrokeshire recently said this: ‘Withdrawing the uplift would reduce the spending power of people on the lowest incomes.
”This will likely reduce consumption meaning families going without essentials and household debts rising, it would also see a reduction in spending just when the economy needs it most.’ I couldn’t agree more with that assessment.”
Jonathan went on to highlight research from Citizens Advice which highlighted three quaters of people they help with debt who currently receive Universal Credit and working tax credit would move into a negative budget if the £20 uplift was removed.
In recent weeks, reports of a one-off payment being made to claimants who will be damaged by the uplift removal.
In coming to the end of his opening speech, Jonathan addressed this: “Finally, there has been a proposal for a one off payment to compensate people affected by this cut. This is an awful idea.
“It doesn’t address the real terms reduction in support, just as unemployment is expected to peak.
“But more than that, whilst six million families are affected by this now, that cohort will change in composition throughout the year.
“A one off payment based on who is eligible now will fail to support some of the people who need that help the most so please minister, ask the Chancellor to think that one through again.”
It remains to be seen how the vote will turn out and if any changes to Universal Credit plans will emerge in the coming weeks.
As it stands, anyone who is on a low income or is out of work can apply for Universal Credit.
Additionally, they need to be aged between 18 and state pension age, have less than £16,000 in savings and be living in the UK to qualify.
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