Mayor: Cutting UC lifeline will ‘level down’ family finances and North’s recovery

//Mayor: Cutting UC lifeline will ‘level down’ family finances and North’s recovery

Published 1st March 2021 at 7:00am

The Mayor of the Sheffield City Region, Dan Jarvis, has warned the Chancellor that extending the Universal Credit £20 a week lifeline by just six months will ‘level down’ family finances and the economic recovery across South Yorkshire and the North.

Dan Jarvis, Mayor of the Sheffield City Region, said:

“Families in South Yorkshire and across the North have borne the brunt of the pandemic because of existing weakness and inequality in our economy and society. The Government’s patchwork of support has already put jobs and businesses in danger and threatens to create a divided recovery as COVID restrictions are eased.

“A six-month extension is wholly inadequate. Universal Credit support was already far too low before the pandemic and cutting the £20 support as unemployment rises would be morally reprehensible and economically illiterate – pushing families into debt and hampering our economic recovery.

“Strengthening the social security safety net will keep families’ heads above water and help boost the economy. It must go hand in hand with investment in jobs, skills and infrastructure to kickstart our recovery and renewal – so we rebuild a stronger, fairer economy and society after the pandemic.

“The Chancellor should do the right thing and make the uplift permanent. Or he risks levelling down family finances and hindering the North’s economic recovery.”

  • The Government introduced the £20 per week uplift to Universal Credit and Working Tax Credits when the COVID pandemic first struck in March 2020, to support families facing the threat of poverty and people already struggling on low incomes. The support is due to end in April and its withdrawal risks sweeping 500,000 more people, including 200,000 more children, into poverty.
  • A six-month extension is being considered, however the Chancellor is under pressure to make the uplift permanent. Unemployment already stands at 5.1% and is forecast to rise further later this year, just as a six-month extension would end – cutting support at the moment it is most needed.
  • The Mayor’s call comes ahead of the Budget and as new analysis, by the independent Joseph Rowntree Foundation, shows 1.7m million families across the North could lose £1,040 a year as a result of the lifeline being withdrawn.
  • A third of all working-age households in the North would be hit, including 300,000 in the North East, 800,000 in the North West and 600,000 in Yorkshire and the Humber.
  • The Mayor called on the Treasury to extend the uplift to people on legacy benefits, who have not yet been moved onto Universal Credit – many of them sick or disabled people and carers, who faced a higher risk of poverty going into the pandemic.
  • Analysis by the Resolution Foundation shows cutting the UC uplift could see tens of thousands of households in South Yorkshire constituencies worse off, with the poorest families losing almost 10% of their income at a time of economic crisis and rising unemployment.
  • At the Budget, the Mayor is calling on Ministers to back in South Yorkshire’s Renewal Action Plan, with investment in jobs, skills and infrastructure to kick start a jobs-led recovery from the pandemic. Read the submission here.