HACKNEY Labour have slammed the Tory Government for the Universal Credit cut of £20 a week as ‘the single biggest slash to benefits since the welfare system was created’.

The cut means that 34,614 recipients of Universal Credit in Hackney will each lose £1,040 a year, which will cost altogether £35.99m across the borough to families.

The Labour and Co-operative Mayor of Hackney, Philip Glanville, said: “Tax rises, pay freezes, fuel shortages, rising inflation and now benefit cuts ─ the Tories are charging Hackney’s most vulnerable and hard-working families for the cost of the pandemic.”

He went on: “Universal Credit was already the lowest real-term income support since the 1990s, and their latest cut is the single biggest slash to benefits since the welfare system was created. Instead of ‘levelling up Britain’, Boris Johnson is about to make our residents and local economy £36m poorer.”

New analysis based on the latest Universal Credit data reveals the staggering cost of last week’s Universal Credit cut to Hackney’s families and economy. The cut, which will see 34,614 recipients of Universal Credit in Hackney each lose £1,040 a year, will cost the borough £35.99m.

The cut also comes as the Government introduces a £500m ‘winter support fund’, although this has to be compared to the £6bn cut overall to Universal Credit.

The analysis comes after Conservative MPs refused to back a Labour motion in the House of Commons to ditch the cut last month.

Hackney Labour previously lobbied the Government against the cut in a letter to the Chancellor, Rishi Sunak MP.

FACTS:

  • 34,614 people in Hackney receive Universal Credit and are set to see a £20 a week ─ £1,040 a year – cut at the end of September.

  • The Government recently announced a £500m support for vulnerable households over winter fund here.

  • That’s a combined total of 34,614 x £1,040.

The latest UC claimant count data is published here.

Labour’s motion in the House of Commons was passed by 253 votes to zero. Just 4 Conservative MPs joined Labour in opposing the cut. The motion read: That this House calls on the Government to cancel its planned cut to Universal Credit and Working Tax Credit which from the end of September 2021 will reduce support for many hardworking families by £1,040 a year.

Universal Credit – the facts:

  • There is a growing consensus in opposition to these plans, including Labour, the public, the House of Commons, dozens of charities and campaign groups and now, the 6 former Conservative Work and Pensions Secretaries of State all agree that this money must remain in place.

  • In September 2020, analysis by the Joseph Rowntree Foundation (JRF) found that the withdrawal of the uplift will risk bringing 700,000 more people, including 300,000 more children into poverty. It could also bring 500,000 more people into deep poverty (classified as being more than 50% below the poverty line).

  • 5 million families claim Universal Credit, including over 3.5 million children. Combined with those claiming Working Tax Credits, this cut will impact 6.2 million families.

The Council passed a Hackney Labour Motion on 21st October 2020 to End the System of Social Insecurity which included calls to maintain the £20-a-week uplift, as well as:

  • The £150 annual discount to Council Tax bills for those receiving Council Tax Support;

  • Increase of LHA to 30% percentile (30 percent of properties in an area affordable under LHA);

  • suspension of the minimum income floor;

  • extending the entitlement of means-tested benefits such as UC;

  • work-related requirement suspension for UC;

  • payments of £500 to support individuals with low-income that need to self-isolate and cannot work from home.

In February this year, Cllr Rebecca Rennison, Deputy Mayor of Hackney and Cabinet Member for Finance, Housing Needs and Supply, wrote to the Chancellor calling on him to cancel the Universal Credit cut. The full text of the letter is below:

Dear Chancellor,

Universal Credit

Hackney Council would like to add its voice to growing calls for the Universal Credit £20 uplift to be maintained. In Hackney 36% of residents, and almost half of all children, currently live in poverty after housing costs have been taken into account, the third highest rate in London.

We are taking what action we can locally, and have just passed a budget which includes a range of measures to address poverty in the borough, including a direct payment to working-age Council Tax Support claimants to help protect them from the Council Tax rises that are necessary to maintain local services.

However, it was clear throughout this work and in public discussions around our budget, that to deliver long-term change, what we need is the retention of the new rate of Universal Credit, together with the Local Housing Allowance uplift and removal of the benefit cap.

After years of frozen benefit levels, unemployment benefit is at its lowest since 1990, and, with many families subject to the benefit cap, the average benefit income of a family with children is £2,900 a year less than in 2011. After successive cuts, freezes and caps over the past decade, Local Housing Allowance has left barely a handful of homes in Hackney affordable. The human cost of this is all too real, with over 3,000 Hackney households, many with children, now living in temporary accommodation.

As well as causing misery for thousands of families, welfare cuts have also failed in the Government’s goal of reducing welfare spend. Instead, the costs have been passed on to local authorities, through temporary accommodation costs or the wider support families pushed to breaking point need. Poverty and social insecurity costs the UK state £69 billion every year, with further identifiable knock-on costs.

We also note that poverty itself discriminates. National figures show that 42% of households where the head of household is from a black ethnic group live in poverty after housing costs. The same figures show that households which include at least one disabled member are significantly more likely to live in poverty. Women are more likely to live in poverty, as are single-parent households. We cannot aspire for a more inclusive and equal society, if we do not address the failings of today’s welfare state.

Far wider changes are also needed, including abolishing the two-child limit, scrapping the bedroom tax and restoring child benefit as a universal benefit for all. All of this alongside ending the dehumanising no recourse to public funds condition and ensuring access to benefits is based on need alone.

However, maintaining the £20 Universal Credit uplift is something that can be done immediately, benefiting thousands of households across the country.

Our hope is that the budget will contain good news and we look forward to its tabling.

Yours sincerely,

Cllr Rebecca Rennison, Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply

16 October 2021

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