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The government’s crisis measures on welfare don’t go far enough

Ensuring people have food, warmth and shelter should not be seen as any less of a priority than keeping businesses viable.

By jonathan Reynolds

Covid-19 has put an unprecedented demand on the social security systems of developed countries around the world. At the beginning of the crisis in the UK, the government began its response by immediately making significant changes to Universal Credit.

As the opposition, we welcomed these. The government itself recognised that what we had going into the crisis was not sufficient to get us through it. So far, thanks to the hard work of frontline staff, the huge volume of claims we have seen – more than 1.4 million in the four-week period since 16 March just for Universal Credit – has been processed fairly effectively. But that does not mean the government’s work is done.

Firstly, the system has only worked because the government has suspended some of the key features of Universal Credit: sanctions and conditionality. In addition, by increasing the core amount of Universal Credit and suspending the Minimum Income Floor, Universal Credit has been made significantly more generous. If the Government believes these increases were necessary during the lockdown, it is hard to see how they can go back to saying it should offer significantly less support in normal times when outgoings are far higher.

But they need to go further. Some families will not be able to receive these increases, because they are limited by the benefit cap and cannot take steps to mitigate it (such as move to cheaper housing or working more hours). People who have been saving for a mortgage deposit might get nothing because being in possession of savings means you are ineligible. People on legacy benefits, such as Job Seeker’s Allowance or Employment Support Allowance, have been told they will not get the same increase as those on Universal Credit.

This is clearly unfair. But most of all, even applicants who are eligible for support will have to wait five weeks for it, or apply for an advance that will then be deducted from their ongoing support. The Department for Work and Pensions needs to act on all these things.

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We also need to talk about statutory sick pay. Again, this is an area where the government has made some concessions in response to the crisis. But statutory sick pay should be available to everyone, including the low paid and self-employed, and it should be higher than £95.85 a week. In Ireland, Statutory Sick Pay is €203 a week, which has temporarily been increased to €305 a week for up to two weeks if you are medically required to self-isolate or have coronavirus.

The cost of all these measures will be determined by who ends up applying for Universal Credit, and this is dependent on how successful the government’s other crisis schemes will be. One of the reasons there is so much contention over the cut off dates for the furlough scheme, or the thresholds for the self-employed package, is because the UK’s existing working age safety net is so unsupportive compared to other countries.

This is something everyone should remember when, post-crisis, we in the Labour Party continue to make the case for a replacement for Universal Credit that is more effective and can command much greater public confidence and support.

We must also recognise that at the moment the prudent choice is to spend public money to ensure when the crisis is over we can come back from it as quickly as possible. Ensuring people have food, warmth and shelter should not be seen as any less of a priority than keeping businesses viable – crucial though that is. The government has far more work to do.

Jonathan Reynolds is shadow work and pensions secretary