Labour urges Rishi Sunak to scrap planned cut to universal credit

Chancellor would be responsible for biggest benefit cut in history of welfare state, says Jonathan Reynolds

Labour is warning that Rishi Sunak will be personally responsible for the largest benefit cut in the history of the welfare state, if the £20-a-week reduction in universal credit goes ahead next month.

The shadow work and pensions secretary, Jonathan Reynolds, urged the chancellor to heed the warnings of charities, anti-poverty campaigners and six former work and pensions secretaries and reverse the planned cut, which will affect almost 6m households.

“I’m trying to get across to people the scale of this,” he told the Guardian. “This is the biggest overnight cut to a benefit rate ever in the history of the welfare state. The House of Commons library tells me it’s bigger than the cut to unemployment benefit in 1931, which collapsed the government. This is big money.”

It is understood the work and pensions secretary, Thérèse Coffey, is concerned about UC going back to pre-pandemic levels, but the Treasury has repeatedly warned that cancelling the reduction would require tax increases.

Reynolds said: “Rishi Sunak has to understand the impact of what he is doing here. It’s a personal decision from him.”

With the labour market looking stronger than expected, he said Sunak could have found the resources for a change of policy.

“We’re now getting the forecasts for the October spending review, and we know spending and government borrowing costs are coming in lower than expected, and they’ve got the fiscal headroom to do this,” he said, adding that the structure of UC meant that the cost of it would automatically fall as wages recovered.

Labour will force a symbolic vote on the issue in the House of Commons on Wednesday, although none is formally needed for the government to implement the policy.

Reynolds urged Conservative MPs – more than 50 of whom have expressed concern about the policy – to send the government the strongest possible message by joining Labour in the voting lobbies.

“This is the only moment – that is the message to them. They need to make their views clear,” he said. “Look at it on its merits: look at the impact that it will have. The impact on family budgets, the impact on poverty – and also the impact on the economy of taking that spending away.”

He cited a visit to Peterborough earlier this week, a Conservative-held seat where Labour analysis suggests the cut will affect 37% of families, sucking £19m out of the local economy.

Reynolds said the decision was also impossible to reconcile with Boris Johnson’s claim to want to “level up” the UK.

“This is something that affects all parts of the country but there is a disproportionate hit to the north and the Midlands, just in terms of where current claimants are, the level of wages in those places. It’s not a decision you can in any way square with any commitment to levelling up,” he said.

Reynolds added that the change would come as a “double whammy” to many families who would also be hit by the government’s new 1.25-percentage-point health and social care levy.

Labour has come under pressure since Johnson’s announcement on Tuesday to say how it would fund improvements to the NHS and social care.

Keir Starmer will tell Labour local government leaders on Saturday that the government could have paid for the changes by taxing landlords and those with significant financial wealth.

“The government act like there was no alternative but there clearly was,” he will say. “The money could have been raised by taxing the incomes of landlords, and those who buy and sell large quantities of financial assets, stocks and shares.” He will dismiss the government’s plan as “a rushed out, half-baked, mess”.


Heather Stewart Political editor

The GuardianTramp

Related Content

Article image
Labour inflicts symbolic defeat over universal credit rollout
Tories under fire for abstaining from vote hours after work and pensions secretary David Gauke ends helpline charges

Jessica Elgot and Peter Walker

18, Oct, 2017 @7:45 PM

Article image
Labour seeks to force publication of universal credit impact analysis
Party to use opposition day debate to demand briefings on impact of changes

Peter Walker and Jessica Elgot

16, Oct, 2018 @6:49 PM

Article image
Labour urges Rishi Sunak to extend Covid self-isolation payments
Chancellor must expand support scheme or risk fourth national lockdown, Anneliese Dodds warns

Jessica Elgot

21, Feb, 2021 @10:30 PM

Article image
Universal credit: Labour loses bid to force release of impact analysis
MPs reject call to publish assessments as Tories rally to defend controversial policy

Peter Walker Political correspondent

17, Oct, 2018 @5:33 PM

Article image
Gordon Brown: universal credit cut ‘vindictive and indefensible’
Ex-PM writes in Guardian that with prices of basics set to ‘rocket’, £20 a week cut is illogical and callous

Peter Walker Political correspondent

22, Sep, 2021 @12:00 PM

Article image
MPs urge government to delay universal credit rollout
MPs’ letter calls for extension of universal credit to be postponed until next year to avoid people suffering Christmas hardship

Rowena Mason Deputy political editor

06, Aug, 2017 @3:30 PM

Article image
Labour criticises delays to universal credit changes
Measures announced in budget will not be introduced until as late as April, leaving some families facing a tough Christmas

Peter Walker Political correspondent

23, Nov, 2017 @2:04 PM

Article image
Universal credit benefits system 'in meltdown', claims Labour

Labour claims work on universal credit system has been halted but DWP insists plans for April completion are still on course

Patrick Wintour, political editor

05, Mar, 2013 @8:28 PM

Article image
Councils forced to fund emergency help for universal credit claimants
Labour says its findings offer more evidence that the government should pause rollout of new benefit system

Heather Stewart Political editor

29, Dec, 2017 @12:01 AM

Article image
Keir Starmer: universal credit cut is an attack on the poorest
Labour leader says Boris Johnson’s decision to remove £20 uplift comes at ‘worst possible time’

Ben Quinn

08, Oct, 2021 @8:17 AM