Universal Credit: North West

Department for Work and Pensions written question – answered on 23rd September 2021.

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Photo of Conor McGinn Conor McGinn Shadow Minister (Home Office), Deputy national campaign co-ordinator

To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential effect on poverty levels in (a) St Helens North constituency, (b) Liverpool City region and (c) the North West of the decision to remove the £20 uplift to universal credit from October 2021.

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

It is not possible to produce a robust estimate of the impact of removing the £20 uplift on poverty or related issues. This is particularly the case at the moment given the uncertainty around the speed of the economic recovery, and how this will be distributed across the population.

The latest poverty figures (2019/20) demonstrate that absolute poverty rates (both before and after housing costs) for working-age adults in working families have fallen since 2009/10. In 2019/20, 8% of working age adults in working families were in absolute poverty (before housing costs), compared to 9% in 2009/10.

This government prefers to look at absolute poverty over Relative poverty as relative poverty can provide counter-intuitive results. Relative poverty is likely to fall during recessions, due to falling median incomes. Under this measure, poverty can decrease even if people are getting poorer. The absolute poverty line is fixed in real terms, so will only ever worsen if people are getting poorer, and only ever improve if people are getting richer.

The Chancellor announced a temporary six-month extension to the £20 per week uplift at the Budget on 3 March to support households affected by the economic shock of Covid-19. Universal Credit has provided a vital safety net for six million people during the pandemic, and the temporary uplift was part of a COVID support package worth a total of £407 billion in 2020-21 and 2021-22.

There have been significant positive developments in the public health situation since the uplift was first introduced. With the success of the vaccine rollout and record job vacancies, it is right that our focus is on helping people back into work.

Through our Plan for Jobs, we are targeting tailored support schemes of people of all ages to help them prepare for, get into and progress in work. These include: Kickstart, delivering tens of thousands of six-month work placements for Universal Credit claimants aged 16-24 at risk of unemployment; Restart, which provides 12 months’ intensive employment support to Universal Credit claimants who are unemployed for a year; and JETS, which provides light touch employment support for people who are claiming either Universal Credit or New Style Jobseekers Allowance, for up to 6 months, helping participants effectively re-engage with the labour market and focus their job search. We have also recruited an additional 13,500 work coaches to provide more intensive support to find a job. In total, our Plan for Jobs interventions will support more than two million people.

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