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  • Writer's pictureIan Gallagher

What the Tories Universal Credit Cut Actually Means | Ian Gallagher

Next month Boris Johnson’s Government will preside over the biggest cut in Social Security since the establishment of the welfare state when they scrap the £20 a week uplift to universal credit. According to the Resolution Foundation this cut will cause 4.4 million families to lose over £1000 per year. £20 may not seem like a huge amount of money but with CPI inflation pushing up the cost of food and other essentials the cost of living is going up and with food shortages on shelves in supermarkets it is not going to get any easier for working families.

Withdrawal of this lifeline will be devastating. Here’s some facts from the Joseph Rowntree Foundation on what this callous Tory cut will do:

  • It will push 500,000 people into poverty including 200,000 children.

  • Around 6 in 10 single parent families will see their income slashed by £1,040 overnight.

  • Working families will be the hardest hit.

The numbers do not lie - if Boris Johnson and Rishi Sunak decide to scrap the £20 uplift they will have directly plunged 200,000 children into poverty. Think about that for a second. As winter approaches families will be forced to choose between heating their homes or feeding their children. When children have had their education disrupted due to COVID along with many other rights of passage there is no justification on a moral level to implement this change.

Yesterday at Westminster the opposition forced the government to think again and all our SNP MP’s voted to keep the uplift and to make it permanent. The government’s main justification for the cut is that that the £20 uplift was a temporary measure because of the pandemic and due to the uplift costing £5 billion they can no longer afford it.

Upon examination of their claim it’s evident that they’re choosing not to afford it given that they are spending, even during a pandemic, £200bn on weapons of mass destruction and so they can increase the UK's stockpile of nuclear weapons. If you didn’t think that was bad enough, evidence shows that out of work support like Universal Credit was at its lowest level in real terms since 1990 when the pandemic started. As a proportion of wages this support is at its lowest levels ever.

For comparison purposes had the Government ended the £20 uplift in April 2021 the cut would have been double the size of the social security cuts delivered by George Osborne in his 2016-2017 budget in terms of number of people impacted and in financial terms based on analysis by the Resolution Foundation. It is abundantly clear that October’s universal credit cut will devastate families and it is huge in terms of its financial impact.

The case put forward by the government simply doesn’t stand up. Ministers will no doubt rely on their mantra “work is the best way out of poverty.” Perniciously their mantra appears to be true given that they are deliberately forcing people into poverty out of ideological choice.

The Resolution Foundation fact checked the Government on their claim that if you worked for two hours you could make up the shortfall. They found this wasn’t accurate because if someone was on the National Minimum wage of £8.91 per hour and claiming UC they would take home £6.60 before tax with this number falling to £4.48 after deducting for tax and national insurance. This falls even further to £2.24 when you add in pension contribution and travel costs. So in effect to make up the shortfall a universal credit claimant would now need to work an extra NINE hours a week to make up the difference.

However, while the Tories plunge people into poverty the SNP want to take a different path because you can’t justify this cut financially or morally. At SNP Conference this weekend Nicola Sturgeon urged Boris to see sense and to scrap this cut and keep it. Conference also made clear that if it were up to the SNP we’d keep the universal credit uplift permanently. And in an independent Scotland we’ll have a minimum income guarantee or a universal basic income so that child poverty is consigned to history.

In summary, Universal Credit was meant to “help make work pay” and the uplift restored some small decency to an awful system. The truth is that for all the rhetoric and wishful thinking it says a lot when Iain Duncan Smith has said opposes Boris and Rishi’s plans to scrap the uplift- and given that we in this tiny instance agree with IDS that this is a terrible idea it just shows you how callous and cold this cut truly is.

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