The south-west of England will have the highest proportion of low-income workers affected by a £20-a-week cut later this year in universal credit payments, according to the TUC that says there is a widespread culture of low pay from Cornwall to Gloucestershire. Four in 10 universal credit claimants in the south-west have a low-paid job that qualifies them for benefits, a larger percentage than any other region.
The rate of claimants who had a job in May was 42.1% in the south-west compared with 41.2% in the east Midlands, the next worst affected, and 36.7% in the West Midlands.
The TUC general secretary, Frances O’Grady, said 2.3 million working families, as well as those who rely solely on benefits, would see their incomes drop by more than £1,000 a year if the government presses ahead with a planned £20-a-week cut in universal credit from October.
The prime minister’s west London Uxbridge and South Ruislip seat has 9,546 UC claimants of whom 3,665 are in work, 38.4% of the total. In the chancellor Rishi Sunak’s Yorkshire constituency of Richmond nearly half, 48%, of people receiving universal credit are in work. The TUC said: “It shows that even in wealthier parts of the UK the cut to universal credit will impact heavily on low-paid workers.”
6 million families claim UC and its predecessor, working families tax credit – twice the figure before the pandemic. More than 500,000 people were forced to file a claim during just nine days in March 2020 as the virus began to spread and the government announced the first lockdown. In the same month, ministers agreed a £20 rise in universal credit and tax credits as a one-year measure to help new claimants adjust to the extra costs of the pandemic. Estimates suggest it helped 700,000 people stay above the poverty line during the pandemic.
Millions of people will still be in precarious jobs in October and unable to cope financially after a cut in benefits of more than £1,000 a year. The Joseph Rowntree Foundation said more than 500,000 people, including 200,000 children, will be plunged into poverty when the government pushes through what it called “the largest single cut to the basic rate of social security since the second world war”.
About 6 in 10 of all single-parent families will experience their income falling by the equivalent of £1,040 per year after the befit cut, it said, imposing “the biggest overnight cut to the basic rate of social security since the foundation of the modern welfare state”.