The Government is planning to cut Universal Credit (UC) and Working Tax Credit (WTC) by £20 a week from October 6.

Labour is forcing a vote in the House of Commons to try to stop it, because it will be a big hit to incomes when families are already struggling.

Most of those affected are working families. One in three people receiving UC in our area have a job.

1. How many families rely on Universal Credit in our area?

  • Thousands more families in our Wentworth & Dearne constituency are relying on Universal Credit (UC) than before the pandemic. Now, 11,019 people receive UC, including 10,170 families.
  • The number of people claiming has gone up by 82% since January 2020, from 6,057.
  • In Rotherham, 27,425 people are receiving UC (an increase of 103% on January 2020) and in Barnsley there are 26,718 (up by 78% in the last 18 months). (1)

2. One in three getting Universal Credit has a job

  • In the constituency, 35% of those getting UC are working, and the proportion in work but needing to top up low wages with UC has gone up as well, from 27% in January 2020.
  • Most of those affected by the cuts to WTC and UC are working families (2) and that the very workers who have got us through the covid crisis are in the firing line for a £1,040 cut to their income every year.
  • Around 3.4million children are living in UC households. A third of all children live in poverty, and three quarters of them live in a household where at least one adult is working.
  • In-work poverty is at record levels, with people working full-time or juggling multiple jobs still struggling to make ends meet.

3. The cut will take £11.5m out of the local economy

  • We know the extra £20 is spent in shops and restaurants on our high streets, so with more than 11,000 people in the constituency losing £1,000 a year, this means a hit to our local economy of £11.5m.
  • This is the wrong decision when the recovery is not fully established. It’s is not levelling up, it’s levelling down.
  • The cut – due to take effect on 6 October – will coincide with the end of the furlough scheme and the onset of winter and rising energy bills.
  • Dozens of charities – including The Trussell Trust, The Salvation Army, Oxfam, Macmillan Cancer Support, Carers UK and Action for Children – oppose the cut.

4. Thousands more will be plunged into poverty

  • Working families are already struggling to get by, having been hit hard by social security cuts since 2010, with an average loss of £750 a year (2).
  • The £20 a week cut risks plunging 700,000 more people – including 300,000 children – into poverty (3).
  • In Wentworth & Dearne, the number of children in poverty has been going up over the last few years, even before the pandemic. In 2018/19, there were 6,128 children in poverty in our area (after housing costs), almost a third of all kids (4).

5. What would Labour do?

  • The Government announcing a £20 increase in UC and WTC at the start of the pandemic was an admission that the level of support offered by the social security system was not enough to see families through the crisis.
  • Labour has consistently called on the Government not to cut UC in April 2021 and they were forced to change course after we won a vote in the House of Commons in January. They extended the uplift for six months until the end of September 2021.
  • We would keep the uplift in place until we can replace UC with a fairer social security system that offers a genuine safety net for everyone and lets people keep more of what they earn.

Sources

(1) House of Commons Library (2) Action for Children (3) Joseph Rowntree Foundation (4) End Child Poverty Coalition