Concerns mount over Universal Credit

Amid furlough ending and rising costs, it is clear that removing the Universal Credit uplift will push many families over the edge.

woman with empty purses

 

It’s been a week of mounting concern about the impact of the axing of the 20 pound a week uplift in Universal Credit at the end of this month. As inflation rises and with and National Insurance contributions set to increase from next April, the extra 20 pounds is being whittled away daily in any event. Numerous organisations have pointed out that losing it entirely could prove disastrous for many people, a large number of whom are in jobs.

The uplift was brought in during Covid due to the huge increase in claimants who had little option of finding a job in the early stages. Many argue that it is too soon to withdraw the uplift, given the pandemic is not over yet and that the cut, scheduled for 6th October, will come just after the furlough scheme ends, which is projected to see an increase in claimants.

Therese Coffey, the Secretary of State for Work and Pensions, who retained her position in the Cabinet reshuffle, said earlier in the week that people could make up the money if they did two hours extra. That has been shown to be false. In fact, due to the way UC works it is calculated you would have to work an extra nine hours a week to make up the 20 pounds. For many reasons that is not possible, one of them being childcare – not just because of the cost of childcare, but its availability, especially at the times you might need to squeeze in an extra nine hours a week.

Childcare

A survey out this week showed that those on UC are particularly struggling with childcare costs, despite UC potentially covering up to 85% of childcare costs. The survey showed that 13% of people on UC have had to use food banks due to high childcare costs compared to 1% who are not on it and that 33% have cut back on essential items like food, heating and clothing compared to 10% who have not received UC.

Coffey’s answer, apart from an inaccurate one, seems to be to tell people to go and find a better paid job – in construction, say. But that is not as easy as it sounds and it depends very much on the jobs available in your area. Plus not everyone can work in construction or tech or drive a lorry. That is not the way to run an economy, surely. We need people to work in jobs such as social care, healthcare or education, among many others, and the likelihood of pay going up significantly in these sectors – enough to address the mounting risk of inflation – is low. We are coming up to winter. We know energy bills are rising. For many that increase will make it impossible to justify turning on the heating, if they have been able to up to now.

We’ve seen this type of response before when it comes to women’s career progression with Liz Truss, for instance, seeming to suggest that the answer to the gender pay gap is for more women to work in higher paid jobs in tech. It would definitely be good for more women to work in tech and the lack of women in the sector is very troubling, but we can’t all work in the tech industry even if more and more jobs have a tech element to them. That individualist approach only gets you so far when the problem is so much broader and deeper than that.

It is the job of government to take a wider, macro approach that means they address all the factors that influence social inequality – not only because it is the right thing to do, but because increasingly divided societies function less effectively, less holistically and less peacefully and store up all sorts of problems for the future.



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