Labour are calling on the government to continue with the £20 per week uplift in UC for the long-term future (no end date is provided).
This extra support was announced by the Chancellor as a temporary measure in March 2020 to support those facing the most financial disruption as a result of the public health emergency.
The government’s approach throughout this pandemic has been to support all families, particularly those vulnerable and on low incomes, through a range of measures worth over £280 billion, including the Furlough Scheme, £1 billion in catch up funding for schools and vulnerable children, a £500 million Hardship Fund, £170 million to support food poverty this winter, and over £6 billion in increases to welfare.
While many jobs have been protected in East Devon, the UC uplift has provided a vital additional safety net. That’s why I voted for the amendment below – which passed through the House – rather than the Labour Party’s narrow motion. It’s important to note that whichever way I voted, it wouldn’t have changed whether the uplift continues or not, as it was an opposition day motion and not legally-binding. You can find out more about opposition day debates here: https://commonslibrary.parliament.uk/research-briefings/sn06315/#fullreport
The evidence shows that our measures so far throughout the pandemic have supported the poorest working households the most, been worth around a fifth of incomes for working households (on average), and reduced the scale of losses for working households by up to two-thirds.
With regards to the next financial year (from the 1st April 2021) there have been several announcements to support vulnerable and low-income families:
- Increasing the National Living Wage (worth £345)
- £670 million in Council Tax support funds (worth £150 each for 3.5 million families)
- Maintaining the £1 billion increase in Local Housing Allowance (benefits over 1 million families by over £600 each)
- A new £220 million Holiday Activities and Food Programme
The statutory annual review of benefits does not include the need for a decision on the £20 per week uplift to Universal Credit and Working Tax Credits. Under the existing arrangements, the uplifts remain in place until the end of March. The government will continue to assess how best to support low-income families in the economic and health context, and that decisions on the future of the uplift will be made later in 2021.
It’s also important to consider the cost of continuing the uplift in Universal Credit. A permanent increase to Universal Credit could cost approximately £6 billion per year. This would need to be funded by taxpayers. For example, it could mean an increase in Income Tax by 1% for 30 million taxpayers (e.g. £175 extra tax every year for somebody earning £30,000) and a 5p increase in fuel duty. Or alternatively, increasing VAT to at least 21% (adding over £200 to average household bills).
We must continue to support low income families and help those who’ve lost their jobs back into work. However, it is right to assess all the options as the national economic and social picture emerges from the pandemic. I’m confident the right steps will be taken by the Chancellor.