Therese Coffey confirms £20 Universal Credit uplift will be scrapped

Therese Coffey confirms £20 Universal Credit uplift will be scrapped

07/07/2021

Work and Pensions Secretary Therese Coffey confirms £20-a-week Covid uplift in value of Universal Credit WILL be scrapped in October despite mounting calls from Tory MPs to make the extra support permanent

  • Ministers increased value of Universal Credit by £20-a-week during pandemic
  • Uplift is due to expire on October 1 but Tory MPs want increase made permanent
  • Cabinet minister Therese Coffey today insisted the increase will come to an end 

Work and Pensions Secretary Therese Coffey today confirmed a £20-a-week Covid uplift to the value of Universal Credit will be scrapped from October despite a mounting Tory rebellion.

Ms Coffey said the Government will soon ‘start communicating with the current claimants who receive the £20 to make them aware that that will be being phased out’.

The Cabinet minister said the extra cash is being removed because it was only ever supposed to be a temporary measure to help families struggling during the pandemic. 

Ms Coffey insisted it had been a ‘collective decision’ across the Government to axe the extra funding as she refused to say whether she had asked the Treasury to find the money to keep the support in place for longer. 

Her comments came after six former Tory work and pensions secretaries, including the architect of Universal Credit Sir Iain Duncan Smith, joined forces to demand the uplift be made permanent.          

Six former Tory work and pensions secretaries, including the architect of Universal Credit Sir Iain Duncan Smith, have joined forces to demand the uplift be made permanent

The extra cash for benefit claimants was brought in as an emergency spending measure during the Covid crisis but it is due to expire on October 1, having already been extended for six months at the March Budget.

Ms Coffey was asked this morning during an appearance in front of the Work and Pensions Select Committee what the plan is for October. 

She replied: ‘Well, ahead of October we will start communicating with the current claimants who receive the £20 to make them aware that that will be being phased out and they will start to see an adjustment in their payments in, I think it really kicks in largely in October, but it will start to kick in I think towards late September for some people.

‘So the current proposal is that we will be recognising that this was brought in in line with the temporary measures to support people during the Covid pandemic.

‘It is being phased out in line with all the other temporary measures that are also being removed.’

Asked if she had petitioned the Treasury to provide funding to keep the uplift in place beyond October, Ms Coffey said: ‘A collective decision was made within government to make sure that that £20 uplift was extended for the six months and that is being honoured.

‘But a collective decision was made that as we see the economy open up we shift the focus strongly into getting people into work, jobs.

‘We will also be helped by considering some of the proposals coming out of the independent commission looking into in work progression because that is an important part of how we help people get up the careers ladder.’

Her comments came amid a growing Tory rebellion over the plan to drop the extra support. 

Sir Iain and five of his successors at the department – Stephen Crabb, Damian Green, David Gauke, Esther McVey and Amber Rudd – wrote a letter to Rishi Sunak calling for the uplift to be retained. 

They urged the Chancellor to find the estimated £6billion a year necessary to ensure the extra payments continue after coronavirus restrictions have been lifted.    

Sir Iain said that scrapping the uplift would ‘damage living standards, health and opportunities for some of the families that need our support most as we emerge from the pandemic’. 

Labour said the cut ‘will hit the lowest paid hardest and hurt our economic recovery’.

Jonathan Reynolds, shadow work and pensions secretary, said: ‘Six million families are set to lose £1,000 a year while out of work support will be left at its lowest level in decades.

‘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.’ 

The decision to scrap the uplift came as the Office for Budget Responsibility told the Government it could face an extra £3billion bill if it sticks with its pensions triple lock promise. 

The OBR said the triple lock, which guarantees that the state pension increases in line with inflation, earnings or 2.5%, whichever is higher, could see payouts rise by as much as eight per cent from April 2022.

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