Cutting universal credit will push millions of people into great hardship | Alistair Cromwell | Opinion

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Every day, advisers at Citizens Advice speak to people whose lives have been turned upside down by the coronavirus pandemic.

A theatre worker who lost their job of 30 years; a family struggling to get by on 80% of what was a low wage to start with; someone with a chronic lung condition who was the first to be let go when redundancies were announced. Many of these people have never needed support from the benefits system, while others were already on a financial knife-edge going into the crisis.

Universal credit is a lifeline that has helped people keep their head above water, but the temporary £20-a-week uplift introduced earlier this year is set to end in spring. This income drop could push many into long-term hardship and set back the country’s economic recovery.

The government deserves credit for acting swiftly at the beginning of the pandemic to prevent job losses. The furlough scheme, which has recently been extended, was a welcome intervention that protected workers from an even greater wave of redundancies.

Despite chancellor Rishi Sunak’s efforts, many people still lost their jobs. The benefits system held up as a flood of people sought support. In February, there were 3 million people on universal credit. There are now 5.7 million.

These soaring numbers mirror the spike in demand for Citizen Advice services since lockdown. When you combine web visits with one-to-one advice, we’ve never supported so many people with so many problems. Overwhelmingly, they’ve needed help with issues at work and support accessing benefits.

Since March, more than 500,000 people have come to Citizens Advice for the first time. Nearly four in five of the people seeking our employment advice are new to our services, and many of them are facing redundancy. Workers in the hospitality and leisure industries have been hit particularly hard, as well as freelancers and the newly self-employed. But our advisers have helped a staggering range of people: caterers, business directors, flight attendants, musicians.

People who previously had enough to get by found themselves in a new situation where their incomings and outgoings didn’t add up. Some ran through savings, others borrowed from family and friends. People cut back until they couldn’t cut back any more.

The increase to universal credit and working tax credit came in direct response to the emerging jobs crisis. It was the first increase to working-age entitlements in five years. The temporary boost may have been prompted by a new influx of claimants, but it also lifted many families already on benefits, who couldn’t meet their living costs and were struggling to pay for the essentials, out of severe financial difficulties. The government did the right thing in recognising the hardship people were facing.

But if this intervention comes to an end in April as planned, 75% of the people Citizens Advice helps with debt, who receive universal credit or working tax credit, won’t be able to cover their living costs. Many will face increased debt, with limited options to increase their income.

Getting people back into work will be a really important part of rebuilding from this crisis, but every economic indicator points to a long road ahead – the extension of the furlough scheme is testament to that. Certain sectors have been devastated, job vacancies have slumped, and it will take time for people to retrain.

Providing enough for people to meet their costs is essential to give security for the future, as well as to increase spending and support the economy. There is growing public favour for greater support through the benefits system, and hopeful signs the government is considering making the uplift permanent.

This is vital to help people who’ve lost out as a result of this pandemic, prevent long-term economic scarring and underpin our recovery with a strong benefits safety net.

Hafta Ichi
Source: The Guardian
Keyword: Cutting universal credit will push millions of people into great hardship | Alistair Cromwell | Opinion

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