Universal Credit £20 uplift: will the government extend benefits increase beyond April amid national lockdown?

Boris Johnson has allowed his Conservative MPs abstain on the vote on extending universal credit

Prime Minister Boris Johnson has facing warnings from his opposition that millions of families will be £1,000 a year worse off if the Government scraps the £20-a-week Universal Credit ‘uplift’.

The Government temporarily increased the benefit to help families through the Covid crisis last spring, but the uplift is due to expire in April, potentially hitting the incomes of six million families.

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Universal Credit will be worth less now than in 2013 if the UK Government goes forward with plans to end the £20 uplift, according to Citizens Advice Scotland (CAS).

Sir Keir Starmer says scrapping the uplift would mean 'millions of families face a £1,000 per year shortfall in the midst of a historic crisis' (Photo: Hollie Adams/Getty ImagesSir Keir Starmer says scrapping the uplift would mean 'millions of families face a £1,000 per year shortfall in the midst of a historic crisis' (Photo: Hollie Adams/Getty Images
Sir Keir Starmer says scrapping the uplift would mean 'millions of families face a £1,000 per year shortfall in the midst of a historic crisis' (Photo: Hollie Adams/Getty Images

Figures from the charity network show that if the £20 uplift is cut, the real terms value of Universal Credit will fall below its 2013 value.

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Here is everything you need to know about it.

What are the plans?

It's rumoured that Chancellor Rishi Sunak could replace the uplift with a £500 lump payment as an alternative (Photo: Leon Neal/Getty Images)It's rumoured that Chancellor Rishi Sunak could replace the uplift with a £500 lump payment as an alternative (Photo: Leon Neal/Getty Images)
It's rumoured that Chancellor Rishi Sunak could replace the uplift with a £500 lump payment as an alternative (Photo: Leon Neal/Getty Images)

Chancellor Rishi Sunak is reportedly considering giving nearly six million benefit claimants a £500 payment as an alternative to the £1,000 yearly uplift to Universal Credit.

According to The Times, Mr Sunak is concerned that legislating to extend the uplift could mean it becomes permanent. The paper said he has drawn up a proposal to give a one-off lump sum of £500 instead – costing around £3 billion.

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The Government is facing increasing pressure to extend the extra support, but has not yet said whether it will do so.

Removing it in April would plunge hundreds of thousands of families into poverty and drag those already in poverty “down into destitution”, MPs have warned.

Keeping the uplift would come at a substantial cost, with the Joseph Rowntree Foundation estimating it could cost around £6.4 billion in 2021/2022.

But the Work and Pensions Committee says the actual amount could be much lower if Government plans to support people back to work are successful in reducing the number of people who rely on the welfare system.

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The committee also warned against replacing the weekly increase with a one-off payment, saying that a lump sum payment “makes no policy sense whatsoever”.

It could destabilise people’s budgets, people with addiction or substance misuse problems could relapse and it could push other claimants over the threshold for support such as debt relief, they said.

Why don’t Labour agree with the proposition?

Labour leader Sir Keir Starmer has said that failing to give families a “helping hand” through the coronavirus pandemic would “slow our economic recovery as we come out of it”.

The Labour leader said last month: “Families across the UK have spent the past year worried for their loved ones, their jobs and their family’s security. Millions of people have had to juggle childcare with working from home, have seen jobs or incomes cut or been excluded from self-employed support.

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“We began 2021 with one of the worst death tolls in Europe and the deepest recession of any major economy. If we don’t give a helping hand to families through this pandemic, then we are going to slow our economic recovery as we come out of it.

“Without action from Government, millions of families face a £1,000 per year shortfall in the midst of a historic crisis.”