Call for emergency Universal Credit uplift

A new policy paper from NIESR calls for an emergency uprate of £25 a week in Universal Credit to deal with rising costs.

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Real incomes are expected to fall by 2.4 per cent in 2022, accompanied by a small rise in unemployment in 2023 to 5.1 per cent, according to a new policy paper from the National Institute of Economic and Social Research.

The paper calls for emergency support to cushion the income shock, including a Universal Credit uplift of £25 per week between May and October 2022 [at a cost of around £1.35bn] and an additional payment of £2.85bn to 11.3m lower income households, amounting to a oneoff cash payment worth £250 per household for 2022-23.

It estimates that 1.5 million households across the UK face food and energy bills greater than their disposable income, with the highest incidence in London and Scotland. However, it also predicts private consumption growth of 4.7 per cent this year, with some families able to use some of the estimated £200 billion of savings they accumulated under Covid-19 to smooth spending patterns and ensure that consumption falls by less than income.

The report comes as the Living Wage Foundation revealed that over 10,000 UK employers are now accredited with it, nearly half (over 4,500) of whom have signed up since March 2020. It says the campaign has put over £1.8 billion in extra wages in the pockets of low paid workers since it started 20 years ago and that one in 13 UK workers now work for a Living Wage Employer. However,  it estimates that one in six workers (4.8 million) are still paid below the real Living Wage.

Living Wage Employers commit to paying all staff – including contracted workers – the independently calculated rate, currently set at £9.90 in the UK and £11.05 in London. The real Living Wage differs from the Government’s National Living Wage [currently £9.50 an hour across the UK] is calculated annually and takes into consideration the cost of food, bills, and rent.

Meanwhile, the Lloyds Bank Foundation has published a report showing the impact of Universal Credit deductions on poverty. Deductions are payments that the Government automatically takes out from benefit payments to pay off debts owed to government from loans such as advance payments or errors and historic benefit overpayments as well as some third party debts (such as utilities bills and rent arrears).

The charities the Foundation supports have raised concerns over welfare deductions and their impact on people facing complex social issues. It is calling for reform of the benefit system. It says: “Deductions are impoverishing individuals and families against a backdrop of low incomes, rising living costs and widening inequalities during Covid.

“Deductions are primarily the explicit result of Government policy, not individual behaviour, and contribute to undermining the Government’s objectives especially on Universal Credit.

“Immediate action on deductions alongside wider reforms are necessary to restore adequacy to social security, particularly important given rising costs, bills and prices.”



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