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18 March 2015updated 02 Sep 2021 5:30pm

Don’t fall for Philip Hammond’s Universal Credit bung – he’s still cutting benefits

The Chancellor announced: “Universal Credit is here to stay”. And so are the cuts.

By Anoosh Chakelian

Philip Hammond announced in his Budget today that he’s increasing work allowances in Universal Credit by £1,000 per year, at a cost of £1.7bn annually.

Charities have welcomed the move, which is a small step towards mitigating the massive hit to household incomes the punitive welfare reform – designed to save money – has been inflicting on claimants across the country.

The Chancellor also announced £1bn worth of measures to help ease the migration over to the new system over five years.

This isn’t really extra money, though – just a partial reversal of cuts. The money is less than a third of the £7bn worth of social security cuts still to come, according to calculations by the Labour Party, and the work allowance announcement reverses a little over half of 2015’s cuts.

Hammond made no announcement about ending the benefits freeze, which has cut £37bn of funding from social security since 2010. A four-year freeze on working-age benefits continues, hitting low to middle income working-age families particularly hard. Next April, a £1.5bn benefit freeze will mean a £200 loss to low-income couples with children.

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According to the Child Poverty Action group, child benefit will be down 23 per cent in real terms by 2020 compared with 2010.

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