Budget 2018: universal credit moves welcome but root and branch change must come | CPAG

Budget 2018: universal credit moves welcome but root and branch change must come

Published on: 
29 October 2018

Child Poverty Action Group warmly welcomes the Chancellor’s decision to increase the work allowances in universal credit by £1,000 but warns that a root and branch review of the design of universal credit is still needed, before the benefit is near fit for purpose. As yet there has been no announcement of an end to the benefits freeze. Since 2010 £37bn of funding has been removed from social security.

The charity applauded the move to introduce a two-week run-on of some existing benefits for people moving to universal credit (from July 2020) and to reduce the maximum rate of debt deductions from universal credit from 40% to 30% (from October 2019).

Commenting, Chief Executive of Child Poverty Action Group Alison Garnham said:

“The work allowance increase is unequivocally good news for families receiving universal credit but a bigger salvage operation is still needed for the benefit. And bringing forward higher tax allowances – which will cost much more than the universal credit change – will mainly benefit the richest half of the population. We look forward to hearing more detail on how the Secretary of State will use the extra £1bn to ease the migration of people on existing benefits to universal credit.

“This is crunch time for universal credit. We hope the Chancellor’s positive announcements on work allowances will be followed by a pause in the roll-out to allow for a fundamental review of its design and, crucially, for a commitment to restoring all the money that’s been taken out of universal credit.

“The work allowance change will be welcomed by hard-up families but unless there is a further fundamental re-think of how universal credit works - and robust safeguards in place before it is scaled-up – people will continue to be pushed into debt and driven to food banks as part of their claim.”

Austerity over?

“This should have been the Budget to bring families in from the cold by ending the four-year freeze on family benefits but the impact of that stealth cut will continue to be felt by just-managing families. Child benefit, a lifeline for many low-income families, will have lost 23% of its real value by 2020, compared with 2010, as a result of sub-inflationary uprating and the current freeze. That’s core money for struggling families in and out of work. If there is substance to the claim that austerity is ending, ending the freeze and allowing family benefits to rise again with rents and inflation must be a priority.”


Note to Editors:

CPAG media contact: Jane Ahrends 0207 812 5216 or 07816 909302