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Leader comment: Sunak loses benefit of universal uplift

01 October 2021

THE £20 increase in Universal Credit, introduced by the Chancellor, Rishi Sunak, in April 2020, was an act of extraordinary compassion in a time of crisis. There was no science to it, and certainly no time to research what sum might be needed — just an appreciation that families who relied on benefit either to supplement or to provide their income were going to be least able to withstand the economic shocks that the developing pandemic was causing. Together with the employees’ furlough scheme, it brought relief to millions of families in the UK, and cemented Mr Sunak’s reputation as a bold and enlightened leader.

Away from those first febrile weeks of the Covid-19 outbreak, it is natural and proper for the Government to be more calculating with the income that it derives from taxation or borrows for a future generation to repay. We would, therefore, have expected to see, months ago, the research that justified the removal of the £20 uplift at this time. It is remarkable that the former Prime Minister Gordon Brown could write, without serious challenge: “Ministers have published no study to explain their cut; offered no justification in, say, falling poverty figures (they are in fact rising); and offered only one pretext, a throwaway claim by the work and pensions secretary, Thérèse Coffey, that people on benefits could simply work more.” The necessary response is that the Universal Credit levels are high enough without the £20 to enable those eligible to receive it to maintain a basic lifestyle: enough to eat, heat, house, and clothe their families. No minister has come forward with this defence, and the Prime Minister, asked by reporters whether he and his family could live on £118 a week, had no comeback. Instead, official mumblings about “supporting jobs” have been drowned out by increasingly desperate pleas by those who work with the poorest — among them more than 1100 local church leaders — for the uplift to be kept because so clearly needed.

Perhaps one reason that the Government does not show its working is that the economy, like the climate, appears to be subject to crisis after crisis. But, while Mr Sunak tries to protect government income to ride out whatever crisis comes next, he shows no awareness that he is sabotaging the efforts of the poorest households to do exactly the same. For them, the national instability over energy prices and availability is added the myriad little shocks that regularly overturn domestic housekeeping. Research by the Office for National Statistics suggests that high-income households have an average of £62,885 in savings; for low-income families — the “precariat” — the average is £95. With no cushion, the only option in an emergency is to borrow, and the Church is well aware of the rocks down that road. Before the pandemic, the Government made more than £26 billion in cuts to the benefit system between 2013 and 2020. Keeping the £20 uplift would be simply paying some of that back.

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