By Holly Barrow.
When the UK government announced in April that it would be providing an additional £20-per-week in universal credit and tax credit as a result of the Coronavirus, many voiced their appreciation for Chancellor Rishi Sunak, hailing his ‘prime ministerial’ qualities. Others, however, deemed this the bare minimum, cautioning the British public to take note of the smallprint: this weekly boost would only be in place for one year, meaning it would serve only as a temporary aid.
Despite widespread glorification of Sunak’s furlough scheme and boosts to welfare across the media, many warned that this minor increase would not go far enough in providing support and protection to those who need it most amid rising unemployment and sharp pay cuts, doing little to counteract the previous decade of welfare cuts that have seen thousands of British families plunged into poverty.
After over a decade of austerity, poverty in the UK has risen exponentially. A 2019 report by Human Rights Watch highlighted that deep poverty in Britain has emerged alongside a ‘draconian restructuring’ of the country’s welfare system since 2010. Increasing reductions in welfare support each year has seen tens of thousands of families going hungry, with this number rising at an alarming rate. The Trussell Trust – the UK’s largest national food bank charity – noted a 5,146 percent increase in emergency food parcels distributed between 2008 and 2018. When viewed in context of the current Covid-19 crisis we now face, the government’s modest £20-per-week boost to welfare seems not only long overdue but also drastically insufficient.
At a time of such unprecedented economic downturn, campaigners and MPs alike have voiced their concerns regarding the temporary nature of this increase to welfare assistance, arguing that this must be made permanent and increased further if we are to protect the most vulnerable. Independent think tank the Resolution Foundation echoed such sentiments in a recently published report on the proposal to reduce universal credit and tax credit back to its former amount in April 2021, emphasising why the government must U-turn on this decision if it is to protect the least well-off families in Britain.
The Resolution Foundation’s analysis predicts catastrophic consequences next April when welfare payments are set to be scaled back by £1,040 per year. It finds that those in former Red Wall constituencies which switched from Labour to Conservative at last year’s general election will be hit the hardest by the proposed cuts. To emphasise just how detrimental these welfare cuts will be, the report compares the current situation to 2015 – when former chancellor George Osborne was forced to u-turn on his proposal to introduce sweeping welfare reductions. In 2015, Osborne’s plans to cut tax credits by over £1,000 a year, 3.3 million working families were on track to be hit by these reductions.
Now, five years later and with Rishi Sunak as chancellor in the midst of a global pandemic, the government’s plan to cut welfare by £1,040 – taking it back to its amount prior to April – is set to serve a blow to roughly twice as many families as Osborne’s 2015 cuts would have. 6 million families are due to have their income reduced by £20-per-week from April 2021, despite this occurring against a backdrop of sky-high unemployment and deep recession. Geographically, those living in Northern Ireland and former ‘Red Wall’ constituency regions – such as the North of England, West Midlands and Wales – are 50% more likely to be hit by the welfare cuts than those living in the South East.
The Resolution Foundation warned that the cuts would take unemployment support to its lowest real-terms level since 1990-91, and its lowest ever relative to average earnings. If Sunak recognised that the welfare allowance prior to the government’s £20-per-week boost was inadequate to protect those relying on them throughout this crisis, why would he insist on returning to this? The importance of a robust safety net must not be understated and is vital if we are to get through this pandemic.
Even with the addition of the £1,040 annual increase in universal credit and tax credit currently being offered to families across Britain, many are still struggling to make ends meet. Helen Barnard, acting director of the Joseph Rowntree Foundation, made clear that families have fallen into debt throughout the pandemic and are having to cut back on essentials. A JRF report predicted that scrapping this welfare increase – a lifeline for so many – will see a further 700,000 plunged into poverty, and half a million into deep poverty.
With one in three of all working-age households in Red Wall constituencies set to suffer, the government must do more. As we continue to navigate Covid-19, further strengthening of the social safety net is crucial – those already struggling to stay afloat even with the current welfare boost will face severe hardship otherwise. In an open letter to the Chancellor, a coalition of charities and organisations have called on Rishi Sunak to ensure the uplift in welfare assistance is made permanent, otherwise this lifeline risks being undermined.
In the world’s fifth largest economy, it is not enough to introduce temporary measures of support. During such an unstable time, people need reassurance that the government will continue to protect them on a long-term basis – not promises of time-limited assistance which will expire in six months. If the government can afford extortionate contracts with unqualified companies, it can support the public.