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.


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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.

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

Anoosh Chakelian is the New Statesman’s Britain editor.

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