Today, the £20 a week cut to Universal Credit and Working Tax Credit takes effect. For many, the cut means £1040 lost from annual incomes.
As of yet, there has not been a Government U-turn, but efforts to cancel the cut and keep the lifeline are not yet over. We stand as a coalition, calling for a stronger, more pragmatic benefits system.
At the start of the pandemic, the Chancellor rightly said that he was introducing the £20 increase to “strengthen the safety net” – a tacit admission that a decade of cuts and freezes had left the benefits system unfit to provide the support people need. It is a hostile system that is described as a “trap”, causing huge amounts of fear and anxiety.
Social security levels are untenably low, far from Minimum Income Standards, and the only way forward is to ensure that everyone – whether they are able to work or not – is able to sustainably meet their cost of living.
Much of the Government rhetoric around the cut has involved jobs, encouraging people into work, and work being the best safety net. This misconstrues reality: in December 2020 39% of people receiving Universal Credit were also in work.
The recently announced £500million ‘Household Support Fund’ to support households in urgent need over winter reflects the precarious situation our inadequate social security system has left people in.
The new fund pales in comparison to the £6bn that will be taken from incomes as a result of the cut, and presents more dehumanising hoops people struggling to meet their daily needs have to jump through to access support: in this case, a small, one-off payment.
In standing against the cut, we must not forget that 1.9 million Disabled people on legacy benefits did not receive the temporary uplift. This includes many who are unable to work because of mental ill health or distress.
The Mental Health and Income Commission has shown that people who experience mental ill health or distress experience an average annual income gap of £8400 when compared with those who don’t fall into this category. Less than 50% of people who experience mental ill health were in employment in 2018/19.
Today’s cut risks putting 2.3 million people in debt. We have heard from our members about the huge mental health ramifications of being in debt and trapped in the poverty cycle.
Cuts to social security disproportionately impact the most marginalised and further engender inequality. People become trapped. This is why standing by the biggest overnight cut in social security since the modern welfare state began is indefensible.
The Government must now do what is right and, at the very least, reinstate the £20 to Universal Credit and Working Tax Credit at the Autumn Budget and ensure families on legacy benefits, such us Employment Support Allowance, Job Seekers Allowance and Income Support, are included.