Universal credit cut shows ‘the poorest are penalised every time’

Food prices are soaring, fuel bills are being hiked up and wages aren’t keeping up with the cost of living. But the government will cut universal credit – for nearly six million people – by more than £1,000 per year on October 6, despite nationwide warnings that it will push thousands into poverty and chaos.

“Why is it the poorest and the hardest up who are penalised every time?” Karen Isaac, a 63-year-old universal credit claimant in Kent, asked The Big Issue.

“No one wants to be on universal credit, and £20 is such a lot of money when you’re scrimping and saving to stay out of debt. Losing it is going to have such a profound effect and I have spent a lot of time worrying about it.”

Karen, who does part-time paid and voluntary work for anti-poverty charity Turn2us, was forced to quit her job in a supermarket after being injured in a car crash nearly four years ago. She signed up for universal credit but still struggled to cover rent and bills, meaning she had to sell a number of possessions including her late mother’s jewellery which was supposed to be passed onto her children.

The £20-per-week increase, introduced to help people on universal credit and working tax credits through the pandemic, made the difference between keeping the house warm or living in the cold for Karen, who has long-term health issues. 

“But now I’m once again rooting around, trying to find anything else I’ve got that’s worth anything to sell,” she said, in desperate need of a cash buffer to see her over the financial cliff-edge at the end of this month.

The universal credit cut will put 200,000 children at risk of homelessness, Labour said ahead of forcing a vote on the cut in parliament. Reducing the payments will mean “repeating the mistakes of the last economic crisis,” more than 100 organisations warned the government earlier this month. It will be the biggest overnight cut to social security since the second world war, the Joseph Rowntree Foundation said. Charities, Commons opposition and Conservative MPs, former Tory welfare ministers, teachers, doctors and lawyers have all told the government the cut is the wrong move.  

A government spokesperson said: “Universal credit has provided a vital safety net for six million people during the pandemic.

“The temporary uplift is part of a £400 billion support package and has been extended beyond the ending of restrictions.”

The ever-increasing cost of living has forced Karen to cut back on essentials during the pandemic, even with the £20-per-week increase. She had to fight her fuel company to reduce her electricity payments to avoid accruing huge debts and has been relying on credit to afford food. 

She worries about how the universal credit cut, combined with the increase in energy bills and the start of the winter months, will impact her health. Ministers recently announced proposals to end free prescriptions for 60 to 66-year-olds in England, which doctors and nurses said would force older people in poverty to make dangerous choices between medications they need.

“When that £80 a month goes, I don’t know what I’m going to do,” she said. “All my direct debits for the things I really need will bounce, I’m going to end up in arrears with the bank. And I won’t have the income to get out of it, I will just keep getting deeper into debt.”

Karen said she understands the UK government might feel the need to find savings somewhere after the Covid-19 crisis crashed the economy, but feels angry that ministers will sooner take from the incomes of people already struggling to get by before raising funds from the wealthy.

“It’s all just unfair,” she said. “It’s them versus us. There’s no real interest in helping anyone who needs help.”

The government’s spokesperson added: “Our focus now is on our multi-billion pound Plan for Jobs, which will support people in the long-term by helping them learn new skills and increase their hours or find new work.”

Karen, just a few years short of being able to retire, has been searching for a job during the pandemic. Despite working from the age of 11 until her accident, she has struggled to find work which suits her health conditions. Job vacancies in the UK are at a record high, but many are physical roles such as in the massively short-staffed hospitality sector.

She attends the job centre every three weeks. “When I go in there and am interviewed, I feel like I’m 20,” she said. “I’m made to feel guilty even though I haven’t done anything. There’s no respect in the system.

“I was told that as long as I can hold a pen, I can work, it doesn’t matter what my health issues are, you’ve got to get on with it. In a way, I was brought up like that. But there comes a time when you just can’t do it.

“You try your best but all the jobs which are available just now are ones I can’t do because I can’t stand for long. Otherwise you’ve got to have a lot of qualifications, which I don’t have.”

Even if Karen secured work for 16 hours per week – the maximum her job centre advisors agreed she should work for due to her health problems – she would likely still need to rely on universal credit to cover her bills.

The government has repeatedly said it will focus on helping people earn money by working rather than relying on social security, though 40 per cent of claimants are already in work while another 20 per cent are exempt from work through illness or caring responsibilities. 

Speaking to BBC Breakfast this week, Work and Pensions Secretary Therese Coffey said she was “entirely happy” with the decision to make the universal credit cut.

The payment decrease is “about two hours’ extra work per week,” she said. “We will be seeing what we can do to help people secure those extra hours, but ideally also to make sure they’re also in a place to get better paid jobs as well.

“It’s a temporary uplift recognising the reason that it was introduced is coming to an end,” Coffey added.

But the way the system works means it is not that simple, Karen said.

“They say you’re always better off working. But you end up working for hardly anything, and they take 63p from your universal credit for every £1 you earn. 

“The whole system needs to be changed, really. So many people have to turn to universal credit and they all have different problems and lives. If you’re my age and you’ve got health issues, maybe you should be on a slightly higher rate. For all sorts of other people too.

“The blinkered approach to the reality of life for so many means the system just doesn’t work,” she said. “The whole thing is wrong. But they just won’t admit it.”

For information on the support available when Covid support schemes end this month, or to back the campaign to keep the universal credit increase, visit Turn2us.