In March 2020, as the economic impacts of the pandemic took hold, the Government was forced to recognise that our social security rates were too low to protect families when they need it. They subsequently increased Universal Credit and Working Tax Credit by £20 a week.
However, this £20 a week is scheduled to be cut, coming into effect for families on Universal Credit from 6 October. This cut will impose the biggest overnight cut to the basic rate of social security since the foundation of the modern welfare state.
New analysis by the Joseph Rowntree Foundation has shown that this cut will mean that 6 million low-income families lose £1,040 from their annual income, creating serious financial hardship and leaving 500,000 people to be swept into poverty – including 200,000 children. Families with children will be disproportionately impacted and worryingly, 6 in 10 of all single-parent families in the UK will be impacted.
In Manchester Withington, 19% of working-age families will be impacted by the cut, meaning 8850 families. 38% of working-age families with children will be impacted by the cut, meaning 3960 families.
Jonathan Reynolds, Labour’s Shadow Secretary of State for Work and Pensions, said:
“Over the last year we have fought very hard to retain the uplift to Universal Credit that was introduced at the beginning of the crisis. This proposed cut this Autumn will increase poverty and hold back our recovery.
“Cutting the budgets of the very families who need it most is unforgivable but add to that the fact that it will weaken our economy and the Government’s decision simply makes no sense at all.”
Jeff Smith, Labour MP for Manchester Withington, said:
“These new statistics show what a devastating impact the Government’s plans to universal credit would have on families in Manchester Withington and across the country.
“Proceeding with the cut would push 500,000 people – including 200,000 children – into poverty. It would also damage our economic recovery by reducing consumer spending, and would disproportionately hit people in the North and the Midlands.
“In the short and medium term, Labour would retain the £20 universal credit uplift. In the longer term, Labour would replace Universal Credit with a fairer and more generous system that works properly, and helps deliver a New Deal for Working people.”