Government does not have ‘head in the sand’ over ending Universal Credit uplift

The Work and Pensions Secretary has told MPs that the Government does not have its “head in the sand” as she confirmed the Universal Credit (UC) uplift will be removed in autumn.

Therese Coffey said the temporary uplift, introduced to help protect people during the coronavirus pandemic, would start to be “phased out” from late September.

She said the Department for Work and Pensions (DWP) will be contacting claimants so they are aware that their payments will change and they will be directed to support for things like budgeting.

When the decision to extend the £20-a-week increase for six months was announced in March, charities warned that it made “no sense” and would damage the mental health of people living in poverty.

They had been calling for the increase to be kept in place for at least a year, or to be made permanent.

And just days ago, six former Conservative work and pension secretaries urged the Chancellor to make the uplift permanent, warning that failing to do so would “damage living standards, health and opportunities” .

Ms Coffey said a collective decision was made to “shift the focus strongly into getting people into work” as the economy opens up.

This will be helped when the country moves to Step 4 of the coronavirus road map and more opportunities are created, she told the Work and Pensions Committee.

Conservative MP Nigel Mills said: “It sounds like this is a ‘dates not data’ decision, that we’ve just chosen to end this at the end of September and not going to review that based on any data at all.

“’We’ll just kind of assume it will all be OK’ – that seems to be a pretty fair summary of what you’re saying: ‘We haven’t got any data yet that you don’t need this uplift, but we’re going to take it away regardless because that’s what we planned in the Budget’.”

Ms Coffey replied: “So it’s not in any way assuming everything’s going to be OK, but it is why… we’ve doubled the number of work coaches, the different programmes we’ve invested in, or are investing in, and we’re also not putting our head in the sand.

“We’ve just started the restart programme which is the long-term unemployed programme. We’re forecasting it’ll last for three years, expecting a million people to take advantage of that.

“You know, we’re not trying to pretend everything is going to work out for every individual, but that’s why we’re investing in people.

“And that in itself I’m thinking is a £3 billion programme. So, we are in it to try and help people get back on their feet.”

The committee was told that the number of claimants in the “intensive work search” UC group has seen a “steady reduction” down from just under 2.5 million in March this year to 2.1 million.

But Ms Coffey acknowledged that there is a difference between this number and the three-quarter of a million job vacancies.

DWP Permanent Secretary Peter Schofield, also giving evidence, added: “The stated reason for the uplift was to support people as they were adjusting to the economic shock caused by the pandemic.

“And as the Secretary of State says, the focus really now is on investing in helping people back into work, and as I travel around the country and I’ve started doing that again now, I’m visiting Jobcentres.

“So the opportunities that are there, not only through the vacancies, but also through opportunities like Kickstart jobs that have been created, mean that it is just absolutely worthwhile all our effort in bringing young people into Jobcentres to link them up to those opportunities, and that’s really where our department’s focus is, and the opportunities are there.”

Alison Garnham, chief executive of the Child Poverty Action Group, said the uplift has made the difference “between coping or not” for millions of families.

She continued: “It makes no sense to cut support just as furlough is wound down and unemployment is expected to rise. Three hundred thousand more children will be pushed into poverty if the cut happens.

“The Government is out of step with public opinion on this, as it was on free school meals.

“Ministers should heed the calls from right across the political spectrum not to make this cut.”

Jonathan Reynolds, Labour’s shadow secretary of state for work and pensions, added:  “There is near universal opposition to this cut, including from prominent Conservatives.

“It is time the Government saw sense, backed struggling families and cancelled their cut to Universal Credit.”

Torsten Bell, chief executive of the Resolution Foundation, said the decision is “bad economics, as well as bad politics”.

He added: “This huge cut will fall not on the families that have amassed large savings during the crisis, but on poorer families who have been more likely to take on additional debt.

“There are difficult trade-offs with all major spending decisions, but taking a gamble with family finances and the strength of the recovery this autumn is the wrong choice.”

Eve Byrne, head of campaigns and public affairs at Macmillan Cancer Support, said the increase is a “vital lifeline” for people with cancer who can struggle to get by because they are too ill to work or encounter higher costs while receiving treatment.