The cut to Universal Credit is not the real problem

This week’s cut to Universal Credit is an eye-catching policy, in all the wrong ways.

It’s the largest overnight cut to the basic rate of benefits since WWII, taking money away from nearly two million people who are already food insecure. To make matters worse, it’s happening at a time when basic costs for low-income families are going up. Claimants’ struggles will come alongside political risks: in nearly 200 Conservative constituencies, this will hit over a third of working-age families with kids. And it’s not even popular among the wider public.

In fact, ending the £20/week UC ‘uplift’ is such an eye-catching policy that it has dominated discussion about benefits for months – indeed, the UC uplift was the focus of attention at the Conservative Conference last year too. Back at the start of this year, there was then fevered speculation about whether Rishi Sunak was going to extend the uplift. When he announced a six-month extension in March, he set us up for a further half-year of the same debates. Until finally, this autumn, the Treasury’s desire to save money won out, barely softened by the new ‘Household Support Fund’.

The real problem

Yet all this endless talk about the UC uplift has distracted us from the deeper problems with the benefits system. As part of the Welfare at (Social) Distance project, we spoke to claimants at the start of the summer: before energy price rises, before National Insurance increases, before UC claimants lost £20/week. Even then, we found that half of UC claimants were food insecure – that is, the quality and variety of their diets were affected by lack of money. Nearly 900,000 had not eaten for a whole day at some point in the last month because of a lack of money.

Even a minimal safety net needs more than another £20/week on UC. It would start by extending the £20/week to the nearly two million disabled people on ESA who never saw an extra penny during Covid, leading to sharp rises in food insecurity. It needs an end to limited entitlements being cut still-further, whether due to the benefits cap, the two-child limit, the bedroom tax, or debt deductions. It needs an end to the five-week wait, because the best way of reducing debt deductions is to stop forcing people to get into debt in the first place.

And benefits simply need to be more generous per se. We found that even in the best case scenario – those receiving the £20 uplift and not subject to the benefits cap et al nor seeing any deductions from their benefit – 29% were food insecure and 16% were severely food insecure. With each passing year, benefits have become less generous because of George’s Osborne’s changes to benefits uprating a decade ago. The shock of a sudden £20/week loss merely compounds the broadly inadequate level of benefits.

The role of public support

But this takes us deeper still, to why we have a situation where the £20/uplift is ending, benefits are inadequate, and there are a slew of further policies undermining the safety net. (As I have argued recently, this is the elephant in the room of current debates).

My answer there was that it flows from the benefits system’s design: “We need to create a system that isn’t just for the most disadvantaged, but is for everybody. A system that everyone has a stake in. A system that doesn’t by its nature raise questions about whether claimants are truly ‘deserving’, but instead starts different conversations – about how the world of work is letting some people down; about people getting the payments that that their contributions (in a broad sense) entitle them to; and so on.”

This is food for thought for policy wonks planning for the long-term, but not much help to people trying to change things in the here-and-now.

There is an alternative story, though, with more hope. The public’s attitudes to welfare are more positive than they have been for 25-30 years – not because of Covid, but because even by 2019, people were starting to see the effects of the last decade of cuts and think they’d gone too unfair. There is widespread unease in the Conservative Party about the extent of the UC cuts, including from six recent Conservative Secretaries of State for Work and Pensions.

Only a fool would predict the future after the last six years. Still: it wouldn’t surprise me if this winter we see the realities of our benefits system laid bare, magnifying existing public concerns into pressure for a more dramatic change than simply £20/week.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: