What next after the £20 cut to Universal Credit?

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ViewsOctober 7th, 2021

With the £20 cut to Universal Credit now a done deed, Victoria Winckler, Director of the Bevan Foundation, asks what’s ahead. 

Despite campaigners coming together, despite winning cross-party support, despite a huge media spotlight, the £20 a week cut to Universal Credit has gone ahead. 275,000 families in Wales are now worse off. 
Significant reversal though this is, we shouldn’t lose sight of the loss of other pandemic premiums. Nor should we forget that important other elements of the social security system remained unchanged during the biggest public health emergency of our generation. 
One of the overlooked benefits that has also been cut is Local Housing Allowance. At the start of the pandemic the Chancellor raised the level of LHA to contemporary rents from its 2016 level, at which it had been frozen for five years. The respite was brief – LHA has been frozen once again for 2021/22. It leaves renters once again facing a shortfall between rents on the open market and the help they can get. 
Another short-lived relief was sanctions for jobseekers who do not comply with requirements to look for work. They  were suspended in March 2020 for three months, but are now back in force. 
Other aspects of the benefits system remained unchanged during the pandemic. People who had not been moved to UC from older benefits didn’t receive the £20 uplift at all, meaning that thousands of disabled people and lone parents didn’t get the £30 increase. Even for those who did, the limit on the total value of income-related benefits that a household can receive – the benefit cap – remained at £385 a week.  The limit on the number of children that can be claimed for and the number of bedrooms a family is entitled to get housing benefit for also remained unchanged.  And let’s not forget sick pay – although there were some concessions for Covid related claims, the rate remained at £96.35.  
Looked at in this wider context, it is clear that the £20 uplift was an essential, but temporary, easing of the social security system.  The fundamental architecture of our 21st century benefits system remained intact throughout the pandemic. 

So what does the future hold?

The public spending review on 27th October could bring some changes. But I am not holding my breath.  A pandemic and vociferous media and civil society concern have not shifted the design of UC, so we should not anticipate anything that smacks of generosity.  It’s not impossible that there may be changes that fit with the UK Government’s focus on work – perhaps an easing of the taper on earnings – but for every headline-grabbing announcement we shouldn’t forget that the rest of the system remains punishingly tough on anyone unlucky enough to need to claim. 
Universal Credit causes hardship by design. For a long time many people have supported the principle of UC, whilst suggesting reforms such as ending the five-week wait and raising the benefit cap. But the list of reforms needed to make Universal Credit a fair way of supporting people who are in low-paid jobs or who cannot work at all is long indeed. It is a moot point whether it is repairable. 
Victoria WInckler is Director of the Bevan Foundation

One Response

  1. To tell the truth, it is so sad that 275,000 families in Wales are now worse off because this situation shouldn’t be in the order of things, but on the contrary it should be adjusted. Also, it is so awful that we can observe so many negative consequences and so many negative changes. Before reading your article, I hadn’t even imagined what turns the situation has taken and how this affected our reality. I really hope that all fears about the future will not be justified and we will see positive changes, like increasing the allowance, not the other way around.

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