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Universal Credit Cuts: 760,000 Brits ‘Could Fall Into Poverty’

Why Global Citizens Should Care
The UN's Global Goals are 17 objectives that provide a roadmap to ending extreme poverty, defined as living on less than $1.90 a day. But in countries like Britain, poverty manifests in a number of ways: unemployment, hunger, and even working poverty — when families in work still don't make enough to make ends meet. Join our movement and take action to end poverty everywhere here.

Just £20 a week.

It’s a sum that, for many families in the UK, may decide whether or not they fall into poverty. In April 2020, one of the government responses to the coronavirus pandemic was to add £20 a week onto universal credit payments, Britain’s all-in-one welfare system. It was a lifeline for many.

But almost a year on, it’s decision time: will that uplift be kept to maintain support for struggling families — or scrapped, a move that could reportedly push 760,000 people into poverty?

A new study from the Fabian Society, a think tank affiliated with the Labour Party, has found that the households that would be hit hardest by these potential benefits cuts include those with disabled adults, carers, and families with children — meaning a potential increase in child poverty.

While benefits are typically associated with unemployment support, the findings of the study, published on Tuesday, revealed that of the 760,000 people who face poverty if the additional £20 is cut, 94% are living in working or disabled households. 

In total, the cuts could amount to some of the poorest households in the UK losing £1,050 a year, a reduction of £6.4 billion annually from 6 million families across the country. 

The increase to the universal credit standard allowance meant that if you were over 25, your benefits increased from £317.82 to £409.89 a month.

Should the UK government follow through on the cuts, it would happen around the same time that the furlough scheme ends in April 2021 — the jobs retainment programme that has funded 80% of salaries that would have otherwise been lost during the pandemic. The Office for Budget Responsibility has predicted that unemployment could rise to 7.5% by the middle of the year.

That could mean a dual threat to the most vulnerable members of society, left suddenly with less support at a time when unemployment is widely expected to bite.

Zooming in on the detail, the report states that families with children will be hit by half of the cuts; households with a disabled adult will be hit by 57%; and those that include a carer by 12%.

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Resistance to the cuts has come from across the political spectrum — including a variety of Conservative MPs and charities including Save the Children, the Trussell Trust, and more.

Indeed, there were six Conservative MPs who rebelled against the government to join the Labour Party in a non-binding motion calling for the increases to be kept. Although such a motion does not automatically lead to a change in policy, it adds further pressure on UK Prime Minister Boris Johnson, especially as dozens more of his own MPs who, as one described it, feel “deeply, deeply uneasy” about reversing the increases.

“If ministers cut universal credit this April, they will overwhelmingly punish working families and disabled people,” said Andrew Harrop, the Fabian Society’s general secretary. “People in these groups have shown huge resilience during the pandemic and have done nothing to deserve this.”

“Some politicians like to pretend that social security is just for the workshy,” he added. “But the reality is that millions of working households need benefits and tax credits to make ends meet, as do disabled people who are out of work through no fault of their own.”

Harrop continued: “If ministers are considering a few months’ temporary extension to the universal credit uplift, that just isn’t good enough. The 2020 benefit increase must be placed on a permanent footing.”

A spokesperson from the UK government said: “We are committed to supporting the lowest-paid families and those most in need through the pandemic, which is why we’re spending hundreds of billions to safeguard jobs, boosting welfare support by billions, and have introduced the £170 million COVID-19 winter grant scheme to help children and families stay warm and well-fed during the coldest months.”

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