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Universal Credit Uplift Extended In The Budget Amid Reports Chancellor "Took Some Convincing"

Universal Credit Uplift Extended In The Budget Amid Reports Chancellor 'Took Some Convincing'
4 min read

Tory backbenchers claimed victory after Chancellor Rishi Sunak confirmed he will maintain the £20 a week uplift to Universal Credit in the Budget for six months.

But Sunak faced warnings the issue of welfare payment levels is not going to disappear.

Tory backbenchers made the case to the Treasury before Christmas that the enhanced welfare payment announced last year should be maintained while the pandemic continues and the poorest families continue to struggle financially. 

At the time the Chancellor was said to be firmly against maintaining the £20 a week increase but in the last few weeks he had changed his mind after the case was made by MPs with "greater clarity and force", said one Tory MP with knowledge of the talks. 

"It was clear No 10 were in the zone that they needed to extend it, but the Treasury needed a lot of convincing - he's required a lot of convincing," they said, reflecting on Sunak's natural preference to look at job creation over welfare payments. 

They said Tories who don't usually have a great knowledge of the welfare system were coming across more and more cases that showed them that it was right to maintain the extra level of support.

Labour leader Keir Starmer said in his response to the Chancellor's Budget that he had been dragged "kicking and screaming, to extend the £20 uplift in Universal Credit – but only for a few months."

"Once again deferring the problem. As a result, insecurity and the threat of losing £1,000 a year still hang over six million families," he said.

"They ask what would we do, we would keep the uplift until a new, fairer system can be put in place."

Tory backbench MP Stephen Crabb, who is a former secretary of state for work and pensions said he welcomed the uplift being maintained but worried that problems could arise in six months time, where another "cliff edge" appears for families when the additional £20 is due to be removed. 

"I suspect this debate isn't going away," he said, suggesting the Joseph Rowntree Foundation, which has campaigned on this issue would not stop their long-term fight to increase welfare payment levels.

"It's positive the Chancellor has listened to the argument that I and lots of MPs made about keeping the uplift. Withdrawing it at this point would have been the right course of action at all.

"I'm pleased it's in place for another six months but there's a much bigger debate about the structure and adequacy of working age benefits in this country, but the decision today is the right one." 

Crabb broke the party whip earlier this year to vote with a Labour amendment to maintain the uplift. 

Sunak said in his Budget speech that he wanted to support low-income households, and by the Universal Credit uplift continuing until September, it is going well beyond the end of this latest national lockdown.

Those on Working Tax Credits will be given equivalent support for the next six month through a one off payment of £500.

Former leader of the Conservative party, Iain Duncan Smith, who oversaw the roll-out of Universal Credit when he was Work and Pensions Secretary between 2010 and 2016, also welcomed the extension of the increased benefit. 

"It would have been premature to change it," he said.

Throughout the pandemic he said Universal Credit had demonstated itself as the "silent ship of the fleet", withstanding the enormous pressures of new demands on welfare payments as some people's incomes nosedived. 

"It's the single government programme that has been proved beyond all government expectations. Under any other structure you would have queues [of claimants] round the block."

He said the government should see retaining the £20 as a valuable investment as when furlough ends, as it will be Universal Credit that "carries the load". They should invest in the tapering element of the benefit inparticular, he said. This is the part where welfare payments reduce inline with people's increased income from work.

"As the Chancellor goes forward to September he should look at investing in Univeral Credit because it's a positive and dynamic system. Investment in it in the right way gets more people back into work, and paying tax," he said.

Duncan Smith believed the faster people get back into work after the pandemic, the lower the cost on the system overall – potentially halving the £6 billion bill of the uplift. 

A statement from the Joseph Rowntree Foundation said people were still going to face a cut to their income in six months time. 

"This means support will be whipped away at the same time as furlough ends and will lead to hundreds of thousands more people being pulled into poverty."

Other Tory MPs who have at certain points in the past few months been campaigning to keep the £20 payment were Theresa May's former first secretary of state Damian Green, Blackpool North and Cleveleys MP, Paul Maynard, and Peter Aldous, MP for Waveney in Suffolk. 

Maynard's seat is one of the most deprived in the country. 

 

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