Universal credit uplift must continue for at least a year or see thousands ‘plunged into poverty’, MPs warn

The universal credit uplift introduced at the start of the pandemic must be extended by a year “at the very least” to prevent hundreds of thousands of households being “plunged into poverty”, MPs have warned.

The £20 weekly increase, brought in last April to mitigate the impact of coronavirus on household finances, is set to end on 31 March.

A new report by the Work and Pensions Committee finds that removing the extra payment as planned would represent a “failure” by government to recognise the reality of people struggling as a result of the pandemic.

Chancellor Rishi Sunak is reported to be pushing against the extra payments, which cost £6bn annually, being maintained despite intense opposition from some Conservative MPs, opposition parties and anti-poverty campaigners.

Since March, the number of people claiming universal credit has doubled to about 6 million, while job vacancies remain far below pre-pandemic levels.

Government advisers have warned that social-distancing rules could remain in force until 2022 unless vaccination significantly reduces the spread of coronavirus, with a “best-case scenario” lockdown being kept in place until the end of May.

Labour MP Stephen Timms, chair of the Work and Pensions Committee, said ministers should extend the benefit uplift for a year at “the bare minimum”.

“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,” he said.

The committee's report states that while it recognises that continuing with the increase would come at a “substantial cost”, this should be seen in the context of the Treasury’s own £280bn figure for total spending on coronavirus support measures this year.

Analysis by the Joseph Rowntree Foundation (JRF) last year concluded that withdrawing the temporary increase risked sweeping 700,000 more people, including 300,000 more children, into poverty.

In January, the Resolution Foundation think tank warned that millions face the sharpest drop in living standards in a generation and the decision on whether to keep the benefit boost would “help define whether this is to be a parliament of ‘levelling up’ living standards, or pushing up poverty”.

In research published by food bank charity the Trussell Trust last week, a fifth of people receiving the benefit said it is “very likely” they would need to rely on emergency food if the cut goes ahead.

Responding to the report, Alison Garnham – chief executive of Child Poverty Action Group – warned that 300,000 more children would be pushed into poverty if the uplift is scrapped as planned.

“Keeping the uplift is a small price to pay to protect households who have lost the most in the pandemic and to aid our national recovery,” she added.

The government has floated plans to replace the weekly £20 uplift with one-off payments, but the committee said ministers should abandon these proposals, noting there was “broad agreement that a steady income is necessary to support people”.

There is also mounting concern about the 2.2 million people on legacy benefits – most of whom are sick or have a disability– who did not receive an uplift at all and who are reported to have been struggling to afford basic essentials during the pandemic.

Iain Porter, policy and partnerships manager at the JRF, said an extension to the uplift of “anything less than 12 months” was “not the answer” because it would cut support for the poorest in society at a time when unemployment is expected to peak later this year and remain high for “some time”.

He added: “This financial lifeline must also be extended to people claiming legacy benefits. It is unacceptable that currently many sick or disabled people and carers are wrongly excluded from the support they need to weather this economic storm.”

It comes after the Department for Work and Pensions refused to release the findings of its analysis into the impact of removing the £20-per-week uplift on low-income families.

In response to a freedom of information request from The Independent, the department said it was exempted from disclosing the document because ministers were still formulating the universal credit policy.

A government spokesperson said: “We are committed to supporting the lowest-paid families through the pandemic, which is why we’re spending hundreds of billions to safeguard jobs, boosting welfare support by billions and have introduced the £170m Covid Winter Grant Scheme to help children and families stay warm and well-fed during the coldest months.”