‘£20 cut would repeat past mistakes' universal credit campaigners tell PM

Cutting the £20 increase to universal credit would “repeat the mistakes of the last economic crisis”, 100 organisations including The Big Issue have told the prime minister.

The open letter, co-ordinated by the Joseph Rowntree Foundation (JRF) with the backing of charities working on housing, poverty and more, was sent to Boris Johnson on September 1 – a month before the controversial benefit is due to be slashed on October 6.

Johnson has resisted calls from campaigners to keep the £20 increase to universal credit after it was introduced during the pandemic. Around six million people turned to the benefit as Covid-19 continued to hit the jobs market. 

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The prime minister told broadcasters last week: “My strong preference is for people to see their wages rise through their efforts rather than through taxation of other people put into their pay packets, rather than welfare.”

However, the cut could mean families lose more than £1,000 a year, a deduction that would force many further into poverty, according to JRF.

In their letter, the poverty battling charity warned cutting the £20 increase would “fundamentally undermine the government’s mission to level up” and “risk repeating the same mistakes that were made after the last economic crisis”.

A decade of austerity followed the 2008 financial crisis and hit people on low incomes the hardest. Sir Michael Marmot’s healthy inequity report, published last year, found a seven per cent cut to government spending over the last decade was “likely to have contributed to widening health inequalities” that saw life expectancy fall in some areas of England.

Now with the impact of the pandemic still being felt, JRF insisted losing the extra amount currently paid through universal credit could have a similar impact on the country’s poorest people.

The Big Issue has also called on the UK government to make the £20 increase permanent as part of the Stop Mass Homelessness campaign to prevent thousands of people losing their home in the months ahead.

That’s why The Big Issue has signed the open letter alongside 99 other organisations. Read the full letter below.

Dear Prime Minister,

We are writing to collectively urge you not to go ahead with the planned £20-a-week cut to universal credit and working tax credit at the beginning of October. 

Many of us provide frontline support in communities up and down our country and see first-hand the importance of our social security system. Life is full of crises that we cannot plan for, such as job loss or illness, and periods of lower earnings or caring responsibilities.

We all need the security and stability of a strong lifeline, not just during a national crisis, but every day.

Imposing what is effectively the biggest overnight cut to the basic rate of social security since World War II will pile unnecessary financial pressure on around 5.5 million families, both in and out of work.

At the start of the pandemic, the Chancellor rightly said that he was introducing the £20 increase to “strengthen the safety net” – a tacit admission that a decade of cuts and freezes had left it unfit to provide the support families need. We all strongly supported this crucial improvement in support.

We are at risk of repeating the same mistakes that were made after the last economic crisis, where our country’s recovery was too often not felt by people on the lowest incomes. The erosion of social security support was one of the main drivers of the rise in in-work and child poverty, and contributed to a soaring need for food banks, rising debt and worsening health inequalities. 

We deeply regret that the Department for Work & Pensions has not published its assessment on the impact of cutting universal credit and working tax credit. However, the latest independent analysis from the Joseph Rowntree Foundation (JRF) shows it risks plunging 500,000 people into poverty, including 200,000 children. It will take the main rate of out of work support down to its lowest levels in real terms since around 1990.

This is not a question of having to choose between a recovery based on getting people into jobs or investing in social security, in fact most families impacted by this cut to universal credit and working tax credit are already in work. The reality of the UK labour market means that to improve living standards, we need to both improve job quality and strengthen the social security system. We also must never lose sight of the need to provide adequate support to families who are not able to work so they can meet their needs with dignity.

Have you signed up to help us #StopMassHomelessness?https://t.co/8tTjaWDwvV

— Big Issue (@BigIssue) August 30, 2021

Six former Conservative Work & Pensions Secretaries believe previous cuts to social security spending went too far and oppose this cut, and your own Conservative MPs are warning that it will have deep and far-reaching effects in their constituencies. 

Recent analysis from JRF shows that 413 parliamentary constituencies across Great Britain will see over a third of working-age families with children hit by the planned cut to universal credit and working tax credit on 6 October 2021. Of these 413 constituencies, 191 are Conservative – 53 of which were newly won at the last general election or in a subsequent by-election.

This looming cut would fundamentally undermine the government’s mission to level up. Citizens Advice has identified that people are one and a half times more likely to claim universal credit in places the government has prioritised for levelling up investment. They also found for every £1 that could be invested from the Levelling Up Fund in England, £1.80 would be taken from these local economies if the government presses ahead.

Furthermore, it is unacceptable that legacy benefits, such as Employment and Support Allowance, Jobseeker’s Allowance and Income Support, continue to be excluded from this crucial improvement in support, mostly impacting people who are sick, disabled or carers.

We are rapidly approaching a national crossroads which will reveal the true depth of the government’s commitment to improving the lives of families on the lowest incomes.

We all want a social security system that supports families to escape poverty rather than pulling them deeper into it. However, this cut risks causing immense, immediate, and avoidable hardship. A strong social security system is a crucial first step to building back better. We strongly urge you to make the right decision.

Yours sincerely,

Action For Children

Advice NI

APLE Collective

The Association of Charitable Organisations

Become

Bevan Foundation

The Big Issue 

Bright Blue

The British Association of Social Workers 

British Psychological Society

Business in the Community

Carers UK

Caritas Social Action Network 

Centre for Cities

Centrepoint

Child Poverty Action Group

Children England

Christians Against Poverty

Church Action on Poverty

Citizens Advice

Citizens Advice Scotland

Citizens UK

Communities that Work 

Crisis

Disability Benefits Consortium (a network of over 100 disability organisations) 

Employment Related Services Association (ERSA)

End Child Poverty Coalition

End Furniture Poverty

The Equality Trust

The Faculty of Public Health

Family Fund

Feeding Britain

The Food Foundation

Generation Rent

Gingerbread, the charity for single parent families

Greater Manchester Poverty Action

The Health Foundation

Homeless Link

The Hygiene Bank

Independent Food Aid Network

Institute for Public Policy Research (IPPR)

Joseph Rowntree Foundation

Jubilee Debt Campaign

Learning and Work Institute 

Little Village

Lloyds Bank Foundation for England & Wales

Macmillan Cancer Support

Mental Health Foundation

Mind

Money Advice Trust

The MS Society

National AIDS Trust 

National Association of Head Teachers (NAHT)

National Children’s Bureau

National Education Union

National Housing Federation

National Residential Landlords Association

National Survivor User Network

Neighbourly

New Economics Foundation

North East Child Poverty Commission 

Northern Housing Consortium

Octavia

One Parent Families Scotland

Oxfam GB

PlaceShapers

Policy in Practice

The Poverty Alliance

The Poverty Truth Community

Rethink Mental Illness 

RNIB (Royal National Institute of Blind People)

RNID

The Robertson Trust 

Royal College of Paediatrics and Child Health

Royal College of Psychiatrists

Royal Society for Public Health

The Runnymede Trust

The Salvation Army

Save the Children

Scope

Scottish Out of School Care Network 

Shelter

St Mungo’s

Standard Life Foundation 

StepChange

Sustain: the alliance for better food and farming

SVP Northern Ireland

Transforming Lives for Good (TLG)

The Trussell Trust

Trust for London

TUC (Trades Union Congress)

Turn2us

UCL Institute of Health Equity 

UK Women’s Budget Group

Women’s Regional Consortium Northern Ireland

Working Families

Young Lives vs Cancer

Young Women’s Trust

Z2K

4in10 London’s Child Poverty Network

Hundreds of thousands of people are at risk of losing their homes right now. One UK household is being made homeless every three-and-a-half hours.

You can help stop a potential avalanche of homelessness by joining The Big Issue’s Stop Mass Homelessness campaign. Here’s how:

• Read our nine-point plan to Stop Mass Homelessness
• Sign the petition to add your voice to our campaign to Stop Mass Homelessness
• Join the conversation and share your support using the hashtag #StopMassHomelessness