Our response to the Budget: Some of the Chancellor’s plans are welcome but some are worrying. Many of the childcare changes announced are a big step forward but the stringent job-search requirements for parents on universal credit (UC) are concerning and overall the package is far short of what struggling families needed from the Chancellor as they face another year of high inflation.
This is an important moment for the government to demonstrate how it will support families on a low income. Investing in social security protects those who need it most. This investment is highly cost-effective – reducing child poverty immediately and leading to improved education, employment and health outcomes, including life expectancy.
Just over a third (34%) of people on universal credit who are subject to the benefit cap – which the Government claims incentivises work – are assessed by the DWP as not required to look for a job because they are caring for very young children, new FOI data for Child Poverty Action Group (CPAG) shows. A further 18% are already in work but don’t earn enough to reach the threshold for the cap to be lifted.
Data we obtained via a freedom of information request reveals that a third (34 per cent) of people subject to the benefit cap, which the government claims is a work incentive, are not expected to seek employment because their circumstances prevent them from working. Rather than being a work incentive, it is pushing children deeper into poverty.
Several government ministers have churned out a line about work being the best route out of poverty, but does it hold any truth? The evidence submitted to the All-Party Parliamentary Group (APPG) on Poverty for its report suggests that this is far from the case.
An estimated 1.8 million households on universal credit (UC) are having to live on significantly less than they are entitled to because the DWP is deducting debt repayments from their benefits at an unaffordable rate, according to new CPAG estimates. There are an estimated 2 million children in these households.
New data released today shows that 4.1 million households were claiming universal credit (UC) in February 2022. Benefits were recently increased by less than half the rate of inflation, meaning these families saw the real value of their UC fall by £660 a year on average. And while benefit levels sit at historic lows, an estimated 1.8 million households are receiving an average of £61 less each month than they are entitled to because of automatic deductions from their UC payment.
The Queen’s Speech was a missed opportunity for the government to introduce legislation that would support people in the short term and improve living standards in the longer term.