People on Universal Credit “just want to be able to feed their kids” a leading poverty campaigner has told MPs, ahead of a real-terms cut to benefits next month.
Jack Monroe appeared alongside other experts at an inquiry into the cost of living, amid warnings that the conflict in Ukraine could further exacerbate the crisis.
Are benefits set to be increased by enough to cover inflation?
Poverty experts have warned MPs on the Work and Pensions select committee about the stark impact that the cost of living crisis is having for people on low incomes in the UK.
Welfare benefits, including Universal Credit and the State Pension, are increased by a small amount every year, in theory to keep pace with inflation, although this has not always been the case.
There have also been significant real-terms cuts to various forms of welfare spending in the last decade or so.
However, as inflation is currently at such a high level, the rate at which benefits are due to be uprated will not be sufficient to keep pace with the rising costs of goods.
The Chancellor confirmed last year that benefits would be uprated by 3.1% in April 2022, but inflation is set to have reached 7%, or potentially even higher by that point.
This means there is a ‘huge gap’ between the amount which benefits are set to rise and what people on low incomes need in light of the cost of living crisis, MPs were warned.
Asked whether this 3.1% increase will be of any help, Monroe highlighted a joint call by the Trussell Trust, Child Poverty Action Group, Christians Against Poverty and the Joseph Rowntree Foundation, for benefits to be uprated by at least 6%.
Although even this wouldn’t adequately cover the increased cost of living, Monroe said.
Morgan Vine, head of policy at the elderly charity Independent Age, said it ‘doesn’t take a mathematician’ to see that the uprating will not be sufficient, and warned that there are “definitely problems on the horizon”.
The real-terms cut to the State Pension will have a dire impact on older people, and in particular those who privately rent, said Vine.
“There are currently 4.1m households in the UK living in poverty” said Monroe, “so for a benefit increase to not even cover the cost of inflation for people who are already living in poverty in Britain today, is going to make that gap even worse and that number even larger.”
Responding to a question from Nigel Mills MP about the government’s previous claims that it could not think of an ‘objective way’ to decide an adequate level of benefits, Monroe said it is “certainly not impossible”.
They said: “The price of average rent, council tax bill, gas and electricity bills - that information is all there, it’s all publicly available. It’s simply a matter of giving people the dignity and advocacy to say ‘this is what I need’ and give it to them.
“No one is asking for the moon, people just want to be able to pay their rent and feed their kids.”
Scrapping Universal Credit delay could lift people out of poverty ‘overnight’
Previous research has found that a significant number of people living in poverty have debts to the Department for Work and Pensions related to benefits sanctions, over-payments or delays.
Debt charities have also warned about the rise in council tax debt, as rates have consistently risen beyond the rate of inflation in many parts of the country.
Monroe told MPs that by scrapping the five week delay to receive an initial Universal Credit payment, the Government could lift a significant number of people out of poverty ‘overnight’.
They said: “That delay forces claimants to take an advanced payment which is then removed back from their benefits over a matter of weeks, but not at a rate that’s set with them.
“If you’re in debt to a private company, a private bailiff company will get in touch they’ll do a big long form - I’ve done many of them myself - all about your income and expenditure and they work out what you can give them, and if you say ‘I can give you 20p a week’ they say ‘ok then it’s going to take 8 years to pay it off, but here’s your 20p a week’.
“But I heard from a woman yesterday who was paying back £5 per week for a council tax debt, but the council had taken the debt back from the private bailiff because it wasn’t being paid back fast enough for their liking, and they’ve taken £57 per week out of her benefits.”
“This means she has £112 a week or so to live on - that’s for rent, clothes, heating, food and two children.”