The Mayor of Tower Hamlets John Biggs has hit out at the Chancellor for ploughing on with plans to cut Universal Credit (UC) in April next year, despite the enormous hardship facing many families across the country as the economic impact of Covid-19 bites.
The government raised the standard UC allowance for 12 months earlier in the year as part of the response to the coronavirus crisis, increasing the rate for a single claimant over the age of 25 from £317.82 to £409.89 per month, however this increase is due to end in April 2021 leaving many UC claimants around £20p/w worse off.
As of October 2020, there were 41,417 recipients of Universal Credit in Tower Hamlets.
Recent analysis by the Joseph Rowntree Foundation (JRF) found that the withdrawal of the increase will risk bringing 700,000 more people, including 300,000 more children into poverty. It could also bring 500,000 more people into deep poverty (classified as being more than 50% below the poverty line). It will impact 16 million people overall, including 6 million children.
New research from the Trussell Trust released this week (1st December) shows that 47% of households surveyed at food banks during the summer owed money to the Department for Work and Pensions (DWP) due to loans and overpayments of benefits – this is compared to 37% at the start of the year before the pandemic hit.
The Chancellor turned down the opportunity to maintain the Universal Credit increase as part of his Spending Review last week. The Chancellor has also announced plans to freeze pay for police officers, firefighters and many other key workers, despite their vital contributions throughout the pandemic.
John Biggs, Mayor of Tower Hamlets, said: “Universal Credit is a real lifeline to so many people in Tower Hamlets, and it is astonishing that the Chancellor is ploughing on with plans to cut Universal Credit right at a time when unemployment is soaring.
“It is unthinkable to take £20 a week, or £1000 a year, from the poorest households in Tower Hamlets as unemployment continues to rise. I urge the Chancellor to give these families some certainty and stop the cut to Universal Credit.”
Councillor Mufeedah Bustin, Cabinet Member leading on Social Inclusion, said: “This winter, food banks are expecting to give out an emergency parcel every 9 seconds, and the Trussell Trust have said cutting Universal Credit could increase already skyrocketing food bank use by a further 10%.
“It’s completely wrong for the Chancellor to ask struggling families to shoulder the cut in Universal Credit. He must rethink his plans.”
Tower Hamlets Council funds a range of tackling poverty measures, including providing a Council Tax Reduction Scheme with council tax reductions of up to and including 100% depending on circumstances (meaning the most disadvantaged don’t have to pay a single penny of council tax), of which nearly 32,000 households in the borough receive some level of council tax discount. The council also funds holiday hunger programmes and provides universal free school meals (FSM) to all primary school pupils, going significantly beyond the Government-funded FSM programme which only funds FSM for some children.