Universal Credit £20 weekly increase must be extended

The Commons Work and Pensions Committee has said that Chancellor Rishi Sunak must maintain the £20 per week increase in Universal Credit for another year ‘at the very least’.

MPs report that, since March, the number of people claiming Universal Credit has doubled to around six million, while job vacancies remain far below pre-pandemic levels. It warns that removing the payment as planned in April, while the effects of the pandemic are still being felt, would ‘plunge hundreds of thousands of households, including children into poverty’ while dragging those already in poverty ‘down into destitution’.

Acknowledging that continuing with the increase would come at a ‘substantial cost’, the committee argues that this should be seen in the context of the Treasury’s own £280 billion figure for total spending on coronavirus support measures this year. The Joseph Rowntree Foundation has estimated that keeping the £20 rise would cost around £6.4 billion in the next financial year. The same organisation has claimed that withdrawing the temporary increase ‘will risk sweeping 700,000 more people, including 300,000 more children, into poverty’.

The report also calls on the government to abandon any plans for one-off payments to replace the weekly rise.

Stephen Timms, chair of the Work and Pensions Committee, said: “Removing the extra payment in March would represent a failure by government – failure to recognise the reality of people struggling. Without regular support, hundreds of thousands of families will be swept into poverty or even destitution. Government must end the uncertainty and commit to extending this lifeline.

“The Chancellor faces difficult decisions about the public finances. He may find it hard at present to make the increase permanent. But the pandemic’s impact on the economy and livelihoods will, sadly, be with us for some time. An extension for a year should be the bare minimum. We must also hope that Rishi Sunak will listen to the groundswell of arguments against one-off payments as an alternative, including from his cabinet colleague at our committee last week. There is broad agreement that a steady income is necessary to support people.”