Boris Johnson is facing appeals from within his own party to delay a £6bn welfare cut by six months to help get the country’s poorest families through a cost-of-living crunch expected this winter.
With energy and food bills soaring, and wage pressures expected to feed through to higher inflation, charities fear that the removal of the £20-a-week “uplift” to universal credit (UC) and working tax credits will force millions into hunger and hardship over the coming months.
Scheduled for Wednesday, the cut – which has been branded “cruel” by one Tory MP – threatens to overshadow the prime minister’s keynote speech to the Conservative Party conference in Manchester on the same day. But Mr Johnson said on Sunday that it would not be “appropriate” to keep the uplift as the Covid-19 pandemic wanes, saying he was not willing to “raise taxes to subsidise low pay”.
The architect of UC, former Tory leader Sir Iain Duncan Smith, said that if the uplift could not stay indefinitely, it should at least be kept until disadvantaged families have weathered the winter.
And Conservative MP Nigel Mills told The Independent: “With the cost of living going up sharply, this is not the time to take that help away.”
Analysis from the anti-poverty charity the Joseph Rowntree Foundation has found that 5.5 million families will lose out by £1,040 a year through the loss of the uplift, pushing half a million people – including 200,000 children – into poverty.
The foundation’s Katie Schmuecker said: “The prime minister is abandoning millions to hunger and hardship with his eyes wide open. The biggest ever overnight cut to social security flies in the face of the government’s mission to unite and level up our country.
“People’s bills won’t get £87 a month cheaper from Wednesday, and families are already anxious about how they will get through a looming cost-of-living crisis. This decision is set to plunge half a million people into poverty, and shows a total disregard for the consequences. The prime minister cannot say he has not been warned; he must abandon this cut.”
A poll for The Independent found that less than one-fifth (19 per cent) of voters supported the plan to slash UC, with 59 per cent saying the level of the benefit should be maintained or increased. Even among Conservative voters, just 34 per cent thought it was right to remove the uplift altogether, against 43 per cent who said it should be maintained or increased, and 13 per cent who said it should be kept at a reduced rate.
“I think most people do want us to be as generous as we can to people in the most need, after they have been through such a difficult time,” said Mr Mills. “Voters get the need to control welfare spending and give people incentives to work, but they also think people should have a decent standard of life.
“Being tough is fine, but being cruel gets you into a very difficult position with voters.”
Chancellor Rishi Sunak has announced a £500m hardship fund to assist struggling families with grants for food, clothing and bills this winter.
And on Monday he will unveil another £500m package to help unemployed people and workers coming off the furlough scheme to find new jobs.
The next phase of the chancellor’s Plan for Jobs will include work coaches for low-paid employees on UC, a support package for over-50s to stay in work, and an extension to the Kickstart scheme, which helps young people into employment.
Mr Sunak said: “At the start of this crisis I made a promise to do whatever it takes, and I’m ready to double down on that promise now as we come out of this crisis.”
But Mr Mills said: “If we have £1bn to spend, then maybe universal credit is a better way to get money into people’s pockets than forcing them to apply for hardship grants or coaching schemes. A six-month extension would only cost £3bn – and maybe less, if the government is right about people getting back into work and working longer hours. That is less than 1 per cent of what we have spent on the pandemic.”
Speaking to the BBC on Sunday, Mr Johnson said that the uplift was one of a number of support measures introduced in response to Covid-19 that were no longer needed. The “fiscal meteorite” of the pandemic had added £407bn to government spending, he said.
“There was a whole package of measures, from furlough to Bounce Back loans to the Covid uplift, that are no longer appropriate,” said the PM.
“What we would rather do is help people into better-paid, better-skilled jobs – which is what is happening. I’d rather see that than raising taxes to subsidise low pay.”
But Sir Iain said: “Of all the things that have gone wrong in the pandemic, universal credit is the one thing that has quietly got on and helped support people without [their] having to queue up at jobcentres.
“Even if the government is determined to do this, I would urge them to think about this over the period of the winter, not do it now. Think about it in February, March, as they approach the Budget, when they know what the cost of living is, when they know what inflation is, when they know what the difficulties are in the marketplace.
“Things are moving in the wrong direction and that is going to hit the poorest in society the most. We need to make sure we keep the support measures in place for them.”
TUC general secretary Frances O’Grady told a meeting on the fringe of the Manchester conference that the cut was “immoral”, adding: “It’s never too late to think again; no shame in changing your mind – I would really hope the government changes its mind on this one.”
And Ryan Shorthouse, CEO of the conservative thinktank Bright Blue, said the government was making a “serious mistake”, saying: “A lot of people who need and deserve universal credit are in left-behind areas, and we’re making a substantial cut to their income.”
Liberal Democrat Treasury spokesperson Christine Jardine said Mr Sunak’s packages “don’t come close to what people needed from the chancellor ahead of the winter”.
“As the cost-of-living crisis begins to hit, people want job security and to know they can pay soaring household bills,” she said.
“Instead, the chancellor wants to end furlough, slash universal credit and raise taxes at the worst possible time. If the government thinks the answer is just to reannounce Kickstart – which is miles off meeting its targets – then they are out of touch and out of ideas.”
And Labour’s shadow work and pensions secretary Jonathan Reynolds said: “The government’s struggling Plan for Jobs has failed to hit its original targets; it is not creating the number of jobs needed and has failed to address the supply chain crisis Britain is experiencing.
“Giving himself an extended deadline will do nothing to compensate for the chancellor’s tax rises, cost-of-living crisis and cuts to universal credit, which are set to hammer millions of working families.”
The row came as TUC research found that one-fifth (20 per cent) of key workers had had to cut back on spending during the pandemic.
Some 6 per cent said they had been forced to take on a second job to make ends meet, and 3 per cent said they had used food banks. More than a quarter (27 per cent) of the key workers said they did not feel they were fairly rewarded for the work they do.
Ms O’Grady said: “Our shop workers, care assistants and school support staff have worked tirelessly to keep this country going through the pandemic.
“The very least they deserve in return for their hard work is a decent standard of living for their families.
“But many are struggling just to pay their basic bills and put food on the table. And one in five are facing the trauma of running out of money before payday. That’s not right.
“Enough is enough. Ministers must use the autumn spending review to give all of our key workers the pay rise they so badly need. We must get the minimum wage up to £10 an hour to stop millions of working people from living in poverty.”
