Slashing £20-a-week from Universal Credit would plunge 720,000 people in working or disabled households into poverty, research warns today.
Six million families are anxiously waiting to hear if they will be stripped of a £1,040-a-year lifeline when Chancellor Rishi Sunak delivers his Budget next month.
The Government announced a temporary hike in its flagship welfare payment last March to help hard-up households battle the coronavirus crisis.
The move costs the Treasury more than £6billion annually and is due to be axed at the end of next month.
Mr Sunak is under mounting pressure to extend the rise beyond April when he announces tax and spending plans on March 3.
A study by the Labour-leaning Fabian Society think tank found 95% of the people who would fall into poverty if the cut goes ahead are in households where someone is working or disabled.
Its ‘Who Loses?’ report, published today, says the planned reduction “raises fundamental questions of justice”.
Households with a disabled adult will be hit by 57% of the cuts, worth £3.7bn a year; families with children will be hit by half the cuts, worth £3.2bn per year; and households where someone is a carer will be hit by 12% of the cuts – worth £700m annually, it warns.
Fabians general secretary Andrew Harrop said: “If ministers cut Universal Credit this April they will overwhelmingly punish working families and disabled people.
“People in these groups have shown huge resilience during the pandemic and have done nothing to deserve this.”
He added: “Some politicians like to pretend that social security is just for the work shy.
“But the reality is that millions of working households need benefits and tax credits to make ends meet, as do disabled people who are out of work through no fault of their own.”
The report was backed by the Standard Life Foundation, whose chief executive Mubin Haq said axing the temporary rise “will be a blow to many who rely on it”.
He warned: “Last year’s uplift to Universal Credit has been an essential lifeline for millions of families with no or low earnings through 2020.
“Even with the £20 increase, many are struggling; without it, more will face hardship.
“Our safety net needs strengthening, not further erosion.”
Shadow Work and Pensions Secretary Jonathan Reynolds said: “Government incompetence has left Britain with the worst economic crisis of any major economy, yet they want families to pay the price for their failure.
“Working and disabled households are really struggling and child poverty is rising but the Conservatives response has been to slash support in the midst of a crisis.
:”Rishi Sunak must offer certainty to families now and secure our economy by cancelling his cut to Universal Credit, which will take £20 a week from millions of families.”
The Mirror told on Monday how stripping families of the £20-a-week rise will plunge 420,000 children into poverty, according to a briefing note drawn-up by Labour MP Emma Lewell-Buck and the Feeding Britain charity.
The Chancellor is expected to use the Budget to say whether the UC rise will be extended.
The Prime Minister’s press secretary Allegra Stratton said last month: “We know it runs out at the end of March, we know that households want to know what is coming next and he is going to come forward with more information shortly.”
A Government spokesman said: “We are committed to supporting the lowest-paid families and those most in need through the pandemic, which is why we’re spending hundreds of billions to safeguard jobs, boosting welfare support by billions and have introduced the £170m Covid Winter Grant Scheme to help children and families stay warm and well-fed during the coldest months.”