Government under pressure to extend £20 per week Universal Credit uplift

17 January 2021, 22:37

Boris Johnson will come under intense pressure to extend the £20-a-week uplift to Universal Credit when Labour forces a Commons vote on the planned cut on Monday.

The Prime Minister has been warned by his opposite number Sir Keir Starmer that millions of families will be £1,000 a year worse off if the Government scraps the increase.

He will also face calls to extend the uplift from Tory MPs as the Northern Research Group (NRG) said endling it now would be "devastating".

In a statement issued on behalf of the 65 MPs in the group, Carlisle MP John Stevenson said it had been a "life-saver" for people through the pandemic.

The statement added: "That is why the NRG are once again calling on the Chancellor to extend the Universal Credit uplift until restrictions are lifted, to ensure that individuals and families who have been worst affected by this pandemic are supported through our recovery with the security they need."

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Labour leader Sir Keir said that failing to give families a "helping hand" through the coronavirus pandemic would "slow our economic recovery as we come out of it".

The Government temporarily increased the benefit to help families through the Covid crisis, but the uplift is due to expire in April, potentially hitting the incomes of six million families.

Labour will use its opposition day debate in the Commons on Monday afternoon to force a vote on the plans. Conservative MPs are expected to abstain.

The motion states: "This House believes that the Government should stop the planned cut in Universal Credit and Working Tax Credit in April and give certainty today to the six million families for whom it is worth an extra £1,000 a year."

Sir Keir said: "Families across the UK have spent the past year worried for their loved ones, their jobs and their family's security.

"Millions of people have had to juggle childcare with working from home, have seen jobs or incomes cut or been excluded from self-employed support.

"If we don't give a helping hand to families through this pandemic, then we are going to slow our economic recovery as we come out of it.

"We began 2021 with one of the worst death tolls in Europe and the deepest recession of any major economy.

"Without action from Government, millions of families face a £1,000 per year shortfall in the midst of a historic crisis.

"We urge Boris Johnson to change course and give families certainty today that their incomes will be protected."

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The Government is also facing pressure from charities to keep the uplift, with Action For Children saying the case against cutting it "couldn't be clearer" with unemployment set to peak in the summer.

Barnardo's chief executive Javed Khan said the Government must make the £20-a-week increase permanent to "help stop hundreds of thousands of people falling into poverty".

Shadow work and pensions secretary Jonathan Reynolds, meanwhile, said the cut would leave "unemployment support at a 30-year low in the midst of a jobs crisis and threaten our economic recovery".

In a letter to his opposite number Therese Coffey, he said: "For the Government to abstain on whether people can afford to pay their bills would force unnecessary uncertainty on already struggling families.

"On behalf of the Labour Party I offer you our support if you chose to put aside party politics and work with us to support families through the pandemic."

In a statement released by the Conservatives, Ms Coffey said Labour would "scrap Universal Credit" and "leave millions of people with an uncertain future".

"This Conservative Government has consistently stepped up to support low income families and the most vulnerable in society throughout this pandemic and will continue to do so," she added.

The debate comes amid a warning from the Resolution Foundation that scrapping the £20 a week uplift will lead to a particularly tough 2021 for low-income households, whose incomes could fall by 4%.

The think tank estimated that the withdrawal of the benefit increase would drive up relative poverty from 21% to 23% by 2024-25, pushing a further 730,000 children into poverty.

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Karl Handscomb, senior economist at the Resolution Foundation, said: "The living standards outlook for 2021 looks bleak at present - but the Government can directly improve it.

"Deciding if the £20 a week uplift to Universal Credit should be extended will determine whether millions of households are able to enjoy any sort of living standards recovery next year.

"And looking further ahead, the decision on whether to keep the UC boost will help define whether this is to be a parliament of 'levelling up' living standards, or pushing up poverty."