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Fri, 3 July 2020

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Ministers claim millions have been helped by Universal Credit — but the reality of this crisis is very different

Ministers claim millions have been helped by Universal Credit — but the reality of this crisis is very different

The Covid-19 shutdown will see an even greater demand for Universal Credit and help from food banks.

3 min read

As coronavirus hardship sets in, the ever-rising growth in debt, poverty, and help from food banks will continue

The Government claims to have helped two million people through its Universal Credit system since the coronavirus crisis and associated lockdown.

However, the Department for Work and Pensions (DWP) has been withholding information on the real picture — and their claim is now unravelling under scrutiny. 

In a ministerial answer it has finally been revealed that, of the first 800,000 people to seek help from Universal Credit since the crisis began, a third got nothing. Not a penny.

DWP are still withholding the stats for April and May. If the figures remain consistent, about 660,000 people seeking help will have got nothing under Universal Credit. Despite being in operation for seven years, another 140,000 people did not even get their claim processed in time. That is 40% of all people seeking help being let down. 

800,000 got nothing and 500,000 are now in debt to the DWP

A further 500,000 people were forced to receive their Universal Credit in the form of a loan – the only option available to claimants who can’t afford basics like food, rent or utility bills during the mandatory five week delay for a first payment. DWP has lent over £320 million since the crisis began. 

As people begin to pay these costs back and hardship sets in, the ever-rising growth in debt, poverty, and demand for help from foodbanks will continue as the broken system takes its grim toll. People have even been made desperate enough to enter into sex work as a result of the abysmal, shocking reality of Universal Credit.

When ministers say two million people have been helped, the truth is very different. 800,000 got nothing and 500,000 are now in debt to the DWP. In total, that’s almost two thirds of all people seeking help. 

This will have shocked and appalled the people claiming help, who have been working and contributing through taxes and National Insurance. The new Shadow Secretary of State for Work and Pensions, Jonathan Reynolds, has already suggested that people who have contributed are right to expect support when they need it.

A very significant further rise in unemployment as a result of the pandemic is widely predicted and the Government is already looking to end support, including the furlough scheme. This will lead to greater demand for Universal Credit. 

Working people deserve to know that they can rely on a functioning social security system for support if they need it. Sadly, Universal Credit will only continue to let them down.


Neil Coyle is the Labour MP for Bermondsey and Old Southwark

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