Universal Credit Cut

As I am sure you are aware, this extra support was announced by the Chancellor as a temporary measure in March 2020 to support those likely to be facing the most financial disruption as a result of the public health emergency. Alongside the temporary increase to Universal Credit and Tax Credits, the Government invested over £352 billion in measures to create, support and protect jobs and businesses – as well as introduced measures such as mortgage holidays and additional support for renters, and has worked with energy suppliers to protect those struggling with energy bills.

In the 10 years prior to the pandemic – employment was at record high levels, thanks to the Government’s careful handling of the economy. This allowed the Government to provide an unprecedented response during the past 18 months. Now as we open up and our recovery gathers pace, it’s right that focus is switched to getting people back into work and improving their prospects. To support this the Government announced a multi-billion-pound Plan for Jobs. 

I am encouraged to see this already delivering for those who have been affected by the pandemic including, for example, through the £2 billion Kickstart scheme, which has already seen over 263,000 approved roles created from a range of different sectors for 16 to 24 year olds on Universal Credit, with over 50,000 young people already in Kickstart roles. This will give young people the practical experience that we know is so crucial in securing sustainable employment. Furthermore, the £2.9 billion Restart scheme will provide intensive help to over a million jobseekers who have been out of work for over 12 months.

I know that my ministerial colleagues have been committed to supporting the British people through the pandemic, so that no one was left behind as we faced one of the greatest economic challenges in our history. This has required a comprehensive £400 billion package of support, including a £7.4 billion injection into our welfare system to help lower income families. 

As we move to the next phase of our national economic recovery, I know that the Government's priority is supporting people back into work and helping those already employed to progress and earn more, through the Plan for Jobs. The Plan for Jobs is an ambitious and comprehensive strategy designed to support people into work as we recover from Covid-19, it includes:

• Supporting long-term unemployed people into work through our £2.9 billion Restart scheme.

• Helping young people into work through the £2 billion Kickstart scheme, with 69,000 young people having already taken up Kickstart jobs.

• Doubling the number of Work Coaches to 27,000, giving jobseekers the personalised and intensive support they need to move back into work.

• Investing over £200 million in the Job Entry Targeted Support scheme, helping jobs seekers into work.

• Launching a Lifetime Skills Guarantee, currently being legislated for through the Skills and Post-16 Education Bill, to ensure that  people can get the skills they need at every stage of their life.

I believe it is important to consider that  extending the £20 increase by another 12 months – or making it permanent – would cost over £6 billion per year. That is equivalent to adding 1p on the basic rate of income tax together with a further 5p on fuel duty.

16/09/2021