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28 September 2021updated 30 Sep 2021 2:26pm

Will the £20 Universal Credit cut become Boris Johnson’s government’s worst decision?

From food banks to Whitehall, the New Statesman reports from the front line of a life-changing policy.

By Anoosh Chakelian

Between a carpet fitter and Dough Boys pizzeria, the shuttered white warehouse of Hillingdon food bank sits on a suburban cusp of London and the Home Counties. Amid a patchwork of newbuilds-to-be, council housing and edge-of-town office blocks, wafts of manure from surrounding farms sail over the street, and willow trees line the River Colne which runs alongside the building.

The food bank supplies goods to distribution centres and housebound individuals in the area, including in Boris Johnson’s constituency of Uxbridge and South Ruislip, and the true blue enclave of Beaconsfield in Buckinghamshire: a parliamentary seat with one of the largest Conservative Associations in the country.

Yet a decision by the Conservative government is about to make life much worse for people here. Ministers say they will reduce Universal Credit by £20 a week at the beginning of October. This would mark an end to the uplift, which was introduced in March 2020 by the Chancellor Rishi Sunak to help people through the pandemic.

The basic Universal Credit payment for a single person aged over 25 would drop by around £87 a month (or £1,040 a year).

This would be the biggest overnight cut to benefits since the creation of the welfare state after the Second World War. Whitehall’s own analysis finds the cut will have a “catastrophic” impact, warning “homelessness and poverty are likely to rise, and food banks usage will soar”. More than half a million people face being pulled below the poverty line, including 200,000 children, as a result of this change, according to the Joseph Rowntree Foundation, an anti-poverty organisation.

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“It would mean no proper, home-cooked meals, no travel to take my daughter to nursery, no clothes, and no heating”

 “I’m already finding it difficult to make ends meet,” says Hamdi*, 28, who is picking up food for herself and her two-year-old daughter.

It is the second time she has visited the food bank, where whitewashed walls are stacked with green crates of Tesco’s own fusilli, Ready Brek, chapatti flour, tinned Frey Bentos steak and kidney pie, and tins of Quality Street.

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A radio blasts Chuck Berry as volunteers pack plastic bags, and pace up and down the chipboard stairs. Wearing a black denim jacket, black leggings and a lilac T-shirt, Hamdi sits across from me in a quiet room of filing cabinets and a plug-in heater, away from the towers of crates. She readily logs into her Universal Credit journal to show me her tight budget.

“I count every single penny, I make sure I don’t waste it,” she says. “I stand there, counting pennies in Lidl, I ask what meat I can buy with £1, and I feel embarrassed.”

Until she had her daughter, Hamdi was working in a branch of Pret, making enough money to live on. The demands of childcare as a single mother, however, meant she had to leave.

Now, she is seeking a job in customer service and attending an IT course five days a week, from 9am-4pm, in order to claim Universal Credit. She receives around £1,000 a month. The costs of the bus journey to take her daughter to and from nursery each day, as well as using data from her phone to access the course (she doesn’t have wifi, a laptop or even a television at home) are taking their toll.

Losing £20 a week would mean “having no proper, home-cooked meals, no travel to take my daughter to nursery, no clothes and no heating – I’m really worried about gas and electric”.

Hamdi already owes over £500 to her gas company, and gas bills are about to rise due to global shortages and British energy companies going bust. Inflation has also risen from 2 per cent in July to 3.2 per cent in August – the largest rise since records began.

Hamdi applies for jobs every week – one at Iceland, another at Transport for London – and is also doing a teaching assistant course. Yet she struggles to find shifts that will fit around nursery drop-offs and pick-ups. “I have GCSEs and A-levels, I’m applying, applying, applying but everything is rejected. Even care jobs, they don’t get back to you.”

While ministers boast of job vacancies at pre-pandemic levels, competition for jobs is still higher for most people – particularly in low-paid openings: two-thirds of unemployed jobseekers are from occupations in which the competition for jobs is at least 10 per cent higher than it was prior to the pandemic, according to the Institute for Fiscal Studies.

“Income from Universal Credit is not even enough for them right now”

If you are a parent and receive housing support, like Hamdi, you lose 63p of Universal Credit for every pound you earn above the monthly £293 work allowance. This is called the “taper rate”.

“I feel anxious all the time,” says Hamdi. “It affects my mental well-being – I feel depressed and stressed. Gas, electric, rent, council tax, top-up Oyster card, food, meat… I want to work part-time, save and then work full-time, but my Universal Credit would reduce and childcare would cost more. It’s like a jigsaw.”

About 60-70 per cent of those who receive food from Hillingdon food bank do so because of benefit delays, cuts or changes, calculates the operations officer Toyin Balogun.

“Income from Universal Credit is not even enough for them right now,” she says. “The cut will make it more difficult.”

In common with most of the country, the number of people in Uxbridge and South Ruislip on Universal Credit surged during the Covid-19 pandemic. In January 2020, there were 3,178 people using the scheme  – equivalent to just under 3 per cent of the population of the seat. This had more than doubled following the national lockdown, reaching 7,663 in May 2020.

As of August this year, approximately 9,465 people are on Universal Credit in Johnson’s constituency – around 8.4 per cent. That’s below the national average of 9 per cent, but above average for a Conservative seat (7.5 per cent).

Some 1.2 million people fear they will be forced to skip meals if the cut is imposed, finds the Trussell Trust foodbank network, of which Hillingdon foodbank is a part.

Universal Credit provided vital support to people during the pandemic. The number of claimants doubled from three to six million.

It isn’t just Labour areas that are set to be affected; many Conservative-held areas will also be hard hit by the cut, including Blackpool South, Peterborough, Burnley and Wolverhampton North East. New claimants over the pandemic were also more likely to have been from higher income brackets, homeowners and professionals than the average claimant pre-Covid.

“You never know when your financial circumstances are going to change,” says Deirdre*, 42, a teacher who had to leave her job and bring up her 12-year-old daughter and seven-year-old son alone because of domestic violence. “I’ve been working since I was 15-years-old, I didn’t choose to be on benefits.”

A £20 cut would mean losing money for her daughter’s uniform costs and bus passes to attend her “dream school”: a grammar school she is proud to attend, which she would have to leave for a less prestigious school nearer home. “It will catapult me and my family into a lot of poverty,” says Deirdre. “That money isn’t for luxuries; it’s for my child to afford to go to school. It will mean no heating: I’ll be sitting here freezing all day trying to look for jobs, and going back to ask for help at the local foodbank.”

“Not a single member of this government has got a clue what it’s like not to be able to afford a meal”

Emily Pringle, 45, a former businesswoman at a bluechip company who began relying on Universal Credit during the pandemic after her circumstances changed (she had suffered a brain injury), says the cut and rising utility costs will mean “sacrificing heating, in reality, and I probably won’t eat as much. I cut out literally everything, all my outgoings, at the beginning of Covid. I’m not entirely certain what else I can do.”

Pringle lives in Cheltenham, a Tory marginal the Liberal Democrats are targeting. Including the uplift, she receives around £630 a month from Universal Credit, which will fall by the best part of £100 if the cut comes in. She is fighting for more support for her seven-year-old daughter, who is autistic. She used to earn a six-figure salary. “How could they do this? Not a single member of this government has got a clue what it’s like not to be able to afford a meal.”

There are signs that public attitudes towards welfare are changing. Comparing May 2021 with the pre-pandemic period, the public was “slightly” less anti-welfare than before, according to the University of Salford’s “Welfare At A Social Distance” project.

“We were pushing the limit of how tight our welfare payments could be, in all honesty”

The government insists the £20 rise was always “temporary”, and its priority is to get people back into work by reducing benefits. For Universal Credit claimants, however, 37 per cent of whom are in work, their reliance on the £20 extra proves that welfare wasn’t at a sufficient level in the first place.

Benefits have been capped since 2013 and were frozen from 2016 to 2020.

Even one of the architects of Universal Credit, welfare policy expert Deven Ghelani, says the very introduction of the £20 uplift highlighted “the inadequacy, fundamentally, of Universal Credit. The wider context, if you take a step back, is over £26bn worth of cuts to the benefits system through changes to uprating or freezes since 2013.”

Now the director of the Policy in Practice social policy tech company, Ghelani still backs the benefits system he helped create from 2010, but warns that the political posturing of “we’re tough on people who claim benefits” has overshadowed questions of “how much do people need? How much is an appropriate amount?”

“I think we were pushing the limit of how tight our welfare payments could be, in all honesty,” admits David Gauke, the former Conservative work and pensions secretary from 2017-18.

“We did go through a period of continued welfare freezes. Certainly by the time we got to 2019-20, such an approach was no longer feasible… I’d say we were at the level where it was no longer feasible for them [welfare payments] to fall any further in real terms.”

All six former work and pensions secretaries since the Conservatives came to power in 2010 publicly oppose the end to the £20 uplift, and have written to the Chancellor calling it “vital”.

“If we see significant increase of foodbank use, homelessness, people facing real material challenges, then I think that will reflect badly on the government… particularly a government that relies perhaps more heavily on the support of those in some of the poorer parts of the country than has been the case traditionally in the Conservative Party,” warns Gauke.

“I think that will stoke a degree of resentment that if I was still in the government and in the Conservative Party, I would be nervous about.”

A significant number of Conservative MPs are concerned about the cut, and ministers within the Department for Work and Pensions have fought a rear-guard action against the Treasury to try and prevent it, as my colleague Stephen Bush has reported.

[See also: Conservative MPs have a familiar worry about the Universal Credit cut]

An amendment to legislation intended to halt the cut by former work and pensions secretary Iain Duncan Smith was rejected on 20 September.

“This is essential income support for millions of people, and taking it away at this stage – particularly when it looks like we’re going to have big increases in the cost of living in the coming months – is just very bad timing,” says Damian Green, who was work and pensions secretary in 2016-17 and represents One Nation Conservative MPs and peers.

Will Tory MPs persuade the Treasury to reverse its decision? “In parliamentary terms, I fear this is the end of the road,” says Green. “Attention now moves to the spending review and Budget, where I suspect we won’t be able to have the cut reversed, which I would prefer, but that we might be able to argue for some mitigating measures for particular recipients” like excluding the most disadvantaged families with children from the cut, for example.

As Conservative opponents seek to persuade the Treasury to make changes to lessen the blow behind the scenes, officials are reportedly looking into whether tweaking the taper rate could ease the pain of the cut.

The fiercest debate is within the Conservative Party, though there is pressure externally too. Labour opposes the cut, which shadow work and pensions secretary Jonathan Reynolds calls “one of the worst decisions a government has ever made”, and warns will be “the worst thing for the economic recovery after Covid as well as the six million [claimants] concerned”.

Even the UN has weighed in, with Olivier De Schutter, the special rapporteur on extreme poverty and human rights, warning the UK government that it’s “doubtful whether the removal of the £20 uplift is a measure that conforms to international human rights law and standards”.

As food and fuel costs rise, inflation bites and the colder months draw in, those who rely on Universal Credit face a grim winter. The £20-a-week cut is scheduled for 6 October: the very day the Prime Minister is due to address Conservative members at his party conference with a triumphalist speech.

“I know Boris Johnson is MP around here, he should put himself in our shoes, and come and live in our house – he would never do that!” says Hamdi, picking up a plastic bag packed with essentials for her and her daughter from the foodbank as she prepares to return to her IT course. “But rich people don’t realise how difficult it is for people like us. Even to wash your hair, you have to be able to afford shampoo.

“I don’t know why the government is doing this cut. They’re putting on more and more pressure, and things will get worse, people will be on the streets, or doing crazy things, if Boris Johnson does go ahead with the cut.”

*First names only have been used on request. Deirdre is part of the Covid Realities research programme, funded by the Nuffield Foundation, documenting life on a low-income during the pandemic.

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