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Thu, 21 January 2021

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Cutting Universal Credit will plunge families further into poverty and gut-wrenching hardship

Cutting Universal Credit will plunge families further into poverty and gut-wrenching hardship

The withdrawal of the uplift will risk bringing 700,000 more people, including 300,000 more children into poverty, writes Jonathan Reynolds MP | PA Images

4 min read

Cutting the £20 Universal Credit uplift while unemployment is growing and many families are struggling to make ends meet is unbelievable. This money is what enables some families to put food on the table at the end of the week.

This week Labour have launched our cancel the cut campaign, aimed at stopping the planned cut to Universal Credit which would hit Britain’s poorest families the hardest while taking money out of Britain’s economy at the worst possible time.

Labour are calling on the Government not to cut Universal Credit as it makes a decision on the levels of social security for the next financial year.

As this crisis goes on, more and more families across Britain are struggling to make ends meet. Today, millions are relying on Universal Credit to get by. But now the Conservatives plan to cut that lifeline – taking £20 per week or £1000 per year away for those who need it most. That the government is even considering a cut to Universal Credit while unemployment is growing and many families are struggling to make ends meet is unbelievable.

Make no mistake, this cut will plunge families into poverty. In September, analysis by the Joseph Rowntree Foundation found that the withdrawal of the uplift will risk bringing 700,000 more people, including 300,000 more children into poverty. As the jobs crisis looms it simply cannot be right that children and families will be the ones to shoulder the burden.

Even more worrying is the fact that this cut will entrench poverty further pushing 500,000 more people 50% below the poverty line. Surely we can all agree that level of poverty in Britain is unacceptable? We should all be deeply ashamed of the pictures of queues outside foodbanks. It is clear this cut would only lengthen those queues.

It seems impossible to me to justify over £1 billion in contracts to Conservative donors while denying support to millions of families already in hardship

Labour will not allow millions more families to be put at risk of gut-wrenching hardship.

The Government has its priorities all wrong. They can afford to shell out £2.1 billion on dodgy procurement and outsourced contracts, yet when it comes to money for Britain’s struggling families, they claim the sums don’t add up. It seems impossible to me to justify over £1 billion in contracts to Conservative donors while denying support to millions of families already in hardship.

 

This cut also makes little economic sense. Research from the Resolution Foundation shows that this cut would take £8 billion out of the economy by reducing the income of the same households who spend more of their marginal pound than average. Removing over £1000 a year from Britain’s lowest income households would see almost a fifth of the population lose 7 per cent of their disposable incomes, a cut which will eventually hit Britain’s high streets as well.

As the Resolution Foundation put it, “Just as everyone agrees now is not the time for tax rises, it is certainly not the time for benefit cuts.”

The reality is that this £20 is what enables some families to put food on the table at the end of the week. And even with this, there are still millions of people falling through the gap who don’t qualify for any support, who are pushed further to the brink with each month of the crisis that passes.

This is why Labour has called for the uplift to be extended to legacy benefits, like Jobseeker’s Allowance and Employment Support Allowance, from the start of this crisis.

This is a time to support each other more than ever, not cut one of very few lifelines at the height of an unprecedented crisis. I urge the Government to see sense – support Britain’s struggling families - and cancel the cut to Universal Credit.

 

Jonathan Reynolds is the Labour MP for Stalybridge and Hyde and shadow secretary for work and pensions.

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