From education to employment

Biggest ever overnight cut to social security makes a mockery of levelling up

Helen Barnard, Deputy Director of the Joseph Rowntree Foundation

Commenting on the Prime Minister’s speech at Conservative Party conference, in which he claimed previous goverments ‘haven’t had the guts’ to tackle big issues in our economy and society, 

Katie Schmuecker, Deputy Director of Policy & Partnerships at JRF said: 

“The Prime Minister has not had the guts to look the millions of people whose incomes are being cut today in the eye and tell them how they are expected to get through the year ahead.  

“The Prime Minister’s attempt to strike an upbeat tone is completely at odds with the despair people are feeling and the cost-of-living crisis we are now facing. He has chosen to cut £20 a week from the incomes of millions including many who are in work as well as those who cannot work due to sickness, disability or caring responsibilities. Promises of a ‘high wage, high skill economy’ that will take years to reach will offer no comfort to families whose incomes have been cut, and the Government knows this.  

“It is a sign of profound disrespect that he did not even acknowledge the struggle people across the country on low incomes are facing on the very day that the biggest ever cut to social security comes into force.” 

This morning (6 Oct), around 5.5 million families across the United Kingdom are waking up £1,040-a-year worse off due to the Prime Minister imposing the biggest ever overnight cut to social security.

Despite fierce opposition from across the political spectrum, his government has pressed ahead with this controversial cut which will cause immense, immediate and avoidable hardship.

As the cut comes into effect today, the Prime Minister must face the five most serious consequences of his cut:

  1. Half a million more people pulled into poverty, including 200,000 children.
  2. Makes social security wholly inadequate by reducing the main rate of out-of-work support to its lowest level in real terms since around 1990 and its lowest ever level as a proportion of average earnings.
  3. Around 20% of all working-age families across the UK have lost £1,040 a year. 6 in 10 single parent families will be affected by this cut.
  4. 1.7 million people who will experience this cut to Universal Credit are unable to work – due to caring for others, disability, or illness – a promise of higher wages will do nothing to help them.
  5. The cut takes £6 billion of spending power out of local economies. The cut has the most severe impact in Yorkshire and the Humber, the North East, North West and West Midlands, although no region will be left unscathed.

Helen Barnard, Deputy Director of the Joseph Rowntree Foundation, said:

“Today the Prime Minister has imposed the biggest ever overnight cut to social security. It makes a mockery of his mission to level up. Despite overwhelming opposition, he is ploughing ahead with a cut which fundamentally undermines the adequacy of our vital social security system as we face a cost-of-living crisis. This is not building back better, it’s repeating the same mistakes made after the last financial crisis.

“The Government says a key test of levelling up is improving living standards, yet they have just made around 5.5 million low-income families £1,040 a year worse off. People’s bills won’t get £87-a-month cheaper from today, in fact they are going up.  Ministers’ arguments in recent days beg the question: has the party that created Universal Credit forgotten the purpose of the system?

“The Prime Minister is abandoning millions to hunger and hardship with his eyes wide open. Low-income families urgently need him to reinstate this vital lifeline.”

Cuts to Universal Credit contradicts the Government’s promise to level up

mary boustedDr Mary Bousted, Joint General Secretary of the National Education Union, said:

“Today, millions of families will experience the £20-a-week cut to Universal Credit which has come into effect. The Government has ignored the warnings of teachers, charities, doctors, economists and many Conservative MPs.

‘The cut to Universal Credit contradicts the Government’s promise to level up. The help that is now offered to families has been cut down to completely inadequate levels.

‘Even before coronavirus, 4.3 million children and young people were growing up trapped in poverty. The impact that this cut will have on rising rates of child poverty is a concern to staff in education and those who lead schools. Independent analysis from the Joseph Rowntree Foundation shows that it risks plunging 500,000 people into poverty, including 200,000 children.

‘This step shows the Government is out of step with the rising cost of living for low-income families. Poverty creates concrete barriers to learning and we can’t rely on school improvement as the only strategy to address poverty.

‘The Government must ensure that no child is left behind after Covid and listen to families and the economic pressures that they are facing. Most poor children live in a household with a parent in work. Families simply can’t afford to lose the £20 lifeline today.

‘We ask the new Secretary of State to raise this with the Treasury. We ask the Chancellor to do the right thing and reinstate the £20 to Universal Credit and Working Tax Credit at the Autumn Budget and ensure families on legacy benefits are included.”

Participants in the Covid Realities project responding to the Prime Minister’s comments on the eve of the cut

“My husband has been in his job for 25 years +, he hasn’t received a pay rise in 5 years and has recently been told there’s no way he will get one anytime soon. So I’m sorry but there’s no fix there for us. Once again the only option is to struggle and I’m tired of it.”

Emma, England, Covid Realities

“He has no idea how tough it is and how hard people are working to make ends meet! It is sickness inducing that he completely misses the point that families will either be cold or hungry due to this cut.”

Kim, Wales, Covid Realities

“Fuel and food is on the increase and … families on a low income cannot afford to absorb these costs. It is short-sighted to not think of the long term costs involved when already impoverished working families cannot sustain themselves.” 

Aurora, England, Covid Realities

“So our prime minister has said he knows it is tough for people on low incomes, does he honestly? … How as parents can we support our children when we are going without food, hungry and unable to concentrate and even sleep at night with worry and stress, do you really understand? … I would invite any MP to come and actually experience the day to day drain of living on low income and the impact that has on our mental and physical wellbeing.”

Caroline, Northern Ireland, Covid Realities 

Political consequences:

  • 413 parliamentary constituencies across Great Britain will see over a third of working-age families with children hit by the planned £1,040-a-year cut to Universal Credit and Working Tax Credit.
    • Of these 413 constituencies, 191 are Conservative – 53 of which were newly won at the last general election or in a subsequent by-election.
  • In 35 local authorities across Great Britain, 50% or more of working-age families with children will be impacted by the planned cut.

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