Urgent call for rise in Universal Credit to be permanent

The Government urgently needs to make the £20 per week uplift to Universal Credit brought in since the pandemic permanent to help stem rising levels of poverty, according to a new report.

The report from the Joseph Rowntree Foundation relates mainly to the pre-Covid period. It says inadequate benefit levels and debt deductions, particularly the repayable advance many people are forced to borrow to cover the minimum five-week wait for Universal Credit, have been key drivers of destitution and interviews with 70 people conducted in Spring 2020 suggest Covid will worsen the situation.

The  report says the number of children experiencing destitution in 2019 rose by 52%, or by an additional 185,000 children compared to 2017 and that one in seven (14%) people experiencing destitution are in paid, often precarious work.

The report says destitution has been rising across the UK, but the biggest rise has been in northern cities and towns. The highest average rates of destitution are in the North East, followed by London and the North West.

The Spring 2020 interviews suggest the added pressures brought about by the pandemic have pushed people closer to the brink. The report notes that many are expecting to be evicted when the moratorium on evictions ends and that some are paying rent arrears with credit cards. People reported not being able to access support through food banks during lockdown because they could not access referral agencies such as Job Centres in the normal way. The closure of libraries had a negative impact on some people as it cut them off from their main source of internet access.

In addition to the call for the £20 per week uplift to Universal Credit and Working Tax Credits – due to end in April – to be made permanent, the report recommends that legacy benefits also see a similar uplift, an end to unaffordable debt repayments from benefits, the removal of the five-week wait for a first Universal Credit payment and investment in local welfare assistance so that every local authority in England has a scheme that provides direct support, including cash, to people in crisis.

Professor Suzanne Fitzpatrick, from the Institute for Social Policy, Housing, Equalities Research (I-SPHERE) at Heriot-Watt University which undertook the research for the report, said: “Our findings clearly show that levels of destitution in the UK were already rising sharply prior to the pandemic and the impact of Covid-19 has intensified the difficulties many people face accessing the help they need to meet their most fundamental needs.

“The sheer scale of the issue is unacceptable in one of the world’s richest countries and starkly reveals the devastating impact of the gaps, flaws and deductions in Universal Credit and other aspects of the social security system that lead to destitution by design.”

Low pay

The report comes as the Low Pay Commission’s annual report recommends that the National Living Wage should continue to rise, but at a lower rate than anticipated last year due to the impact of the Covid-19 pandemic.

The report recommends a 2.2% increase in the NLW to £8.91. This is 15p lower than the rate of increase anticipated in previous reports in order to meet the Government’s target of reaching two-thirds of median earnings by 2024. That means that it reflects the ongoing economic turmoil caused by the pandemic, while also being ahead of price rises, says the Commission. It says: “This increase is chosen to be modestly higher than that for prices in the year the rate applies, meaning low-paid workers’ living standards should be protected as they will continue to receive a real-terms pay rise. Most importantly, we do not believe this increase presents a significant additional risk to employment prospects, beyond the already challenging outlook.”

The Commission says there is no need for a change to the Government 2024 target. It adds that it remains committed to reducing the eligibility age for NLW from 25 to 23 and recommends a rate of £8.36, a 2% increase, for 21 and 22 year olds with this age group eventually becoming eligible for the full NLW. For 18-20 year olds, it recommends an increase to £6.56 (11 pence or 1.7%), which it says is broadly in line with inflation expectations. And for 16-17 year olds, the group most vulnerable to unemployment, it recommends an increase to £4.62 (7 pence or 1.5%).

Meanwhile, the Government has today published a list of nearly 400 free courses to be offered to adults without A-levels as part of a plan to reskill the workforce after Covid. The courses are available to adults without a full qualification at Level 3 or A-level equivalent from April 2021 cover everything from child and social care, engineering and agriculture to construction.

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