Universal credit cut will come as shock for claimants, says Labour

Government accused of failing to effectively communicate £20 reduction with many families unaware of imminent cut

Labour has accused the government of failing to prepare struggling low-income families for October’s £20-a-week cut in universal credit payments after it emerged that up to 2 million claimants were unaware of the imminent reduction.

Separate surveys carried out by poverty charities indicate that between 18% and 36% of claimants did not know their income would fall by £90 a month or £1,050 a year after September – the biggest cut to social security payments since the second world war.

Campaigners are alarmed there is such low awareness of the reduction, which is six weeks away. It will come as a significant financial shock for many, and one that will hit households as furlough ends and big increases in energy prices come into effect.

Citizens Advice has also highlighted low awareness of the cut, with frontline advisers reporting “major concerns” and high levels of anxiety among clients over how they will cope without the extra £20 a week.

More than 3 million children living in low-income households are likely to be affected by the cut, according to Save the Children, with half of claimants saying they will struggle financially from October. The Joseph Rowntree Foundation said the cut would push 500,000 people below the poverty line.

The shadow work and pensions secretary, Jonathan Reynolds, said: “It is shameful that ahead of the biggest overnight cut to social security in decades, affecting millions of people, the government still has not effectively communicated with those in receipt of universal credit.

“Inflicting this devastating cut is bad enough but to fail to prepare families for it is adding insult to injury. Perhaps the government are simply too ashamed to own up to their actions. It’s not too late for the prime minister to see sense, cancel his cut and back struggling families.”

Backbench Conservative MPs are also concerned about the cut amid nervousness about a growing cost-of-living crisis in southern Tory heartlands and “red wall” areas of the north and Midlands of England.

About 6 million people claim universal credit in the UK, the majority of whom began claiming after losing jobs or hours during the pandemic. Many will not have claimed the benefit before April 2020, when the temporary £20 a week uplift was introduced.

A survey by the charity Turn2us of 4,000 people between 6 and 13 August, 36% said they were unaware of the £20 cut. Lack of awareness was highest among 18- to 24-year-olds (52%), and in Greater London (43%).

Jo Kerr, the director of impact and innovation at Turn2us, said: “We are just weeks away from the biggest cut to our social security system since the second world war, and many people who are going to be affected do not even know it’s coming.”

The Trussell Trust found that 18% of the 2,000 universal credit it polled between 5 and 19 August were unaware of the cut. Garry Lemon, Trussell’s director of policy, said it was alarming the cut was fast approaching and many people were not prepared.

Gayle Purves, an adviser at Citizens Advice Newcastle, said: “I advised a woman recently about how she could make ends meet. She has a disabled son who’s turning 18 and that means she will already see a decrease to her benefits. She had no idea about the cut. It was another blow on top of what’s already been an unimaginably difficult year.”

Ministers, who confirmed the cut in early July, have not sent out a formal letter to each of the UK’s 6 million universal credit recipients warning of the reduction but are relying instead on a series of messages to claimants’ online journals, backed up with text alerts.

A Department for Work and Pensions spokesperson said: “We made changes to all statements in July and are currently following up with text messages to alert claimants to check their accounts. Further notifications will also be sent in September and October.”

• This article was amended on 20 August 2021 to make clear claimants’ income will fall by £90 a month rather than £90 a week.

Contributor

Patrick Butler Social policy editor

The GuardianTramp

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