Why it’s time to cancel the cut to Universal Credit

Poverty Family
Photo by Victoria Borodinova from Pexels
ViewsSeptember 2nd, 2021

With a month until the biggest cut to benefits since World War 2, Victoria Winckler sets out why the UK Government must cancel the cut. 

At the start of the pandemic, the UK Government increased the rate of Universal Credit (UC) by £20 a week, stating that this increase was needed to ‘strengthen the safety net’.  The UC rate is set to be cut by that £20 a week on 6th October, with few signs so far – despite some unease amongst Conservative MPs – of a change of mind. 

The cut is potentially devastating for thousands of families in Wales. That is why the Bevan Foundation has joined 99 other signatories of an open letter to the Prime Minister, urging him to cancel the cut.

The cut to UC will hurt 1 in 5 households in Wales

The cut to UC will bring widespread hardship to a large number of families in all parts of Wales. Around one in five households – a total of 275,000 – claim UC and face being plunged into poverty when the cut takes effect.

We already know that the combination of pay cuts and the rising cost of living mean that 10 per cent of Welsh households have fallen behind on a bill whilst 17 per cent have borrowed money to pay a bill. Unprecedented numbers of families are relying on foodbanks. 

Children will be especially hard hit

The cut will hit children especially hard.  More than half the families hit by the cut include children – a total of 149,000 families.  Families with children have already borne a great deal in the pandemic, with schools closed, loss of contact with friends and relatives, and pressure on household budgets. The cut will inevitably increase child poverty and cause lasting harm to children from low income families.

The cut could not come at a worse time. 

The furlough scheme ends just a week before the UC cut takes effect, meaning workers let go by their employers will have to rely on some of the lowest rates of unemployment support in developed countries.  The UK Government says that the best solution is for people to get work – but this overlooks the fact that the majority of households receiving UC are already in work.  They rely on UC because their work simply does not pay enough.

And we should not overlook the need for adequate support for people who are unable to work, for example because of long-term illness or because they are carers. They too should be able to meet their needs with dignity. 

The cut will harm the recovery

The cut will take £286 million from Wales’ local economies – money that has been spent on food, clothing and occasional treats like an ice-cream. The cut comes just as many businesses are struggling to recover.  We saw how recovery from the financial crash was slowed by the rapid imposition of austerity – so too could recovery be stalled by cutting Universal Credit. 

The areas with the weakest economies will be hardest hit

The cut does not fall evenly across Wales. The constituencies with the highest proportion of families receiving UC are in many of Wales’ struggling areas: Merthyr Tydfil and Rhymney, Rhondda and Cynon Valley.  These areas need action to recover not more cuts. 

But areas elsewhere will be affected too:  Vale of Clwyd, Torfaen and Newport East are all in the top five most affected areas.

The Bevan Foundation will be publishing a briefing on the cuts to UC shortly – watch this space!

Victoria Winckler is Director of the Bevan Foundation


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