MORE than 100,000 people will be forced into absolute poverty by the UK Government’s £20 cut to Universal Credit in 2022-2023, according to analysis from a top economics institute.
The Institute for Fiscal Studies (IFS) published its findings on Sunday ahead of a full report into “Living Standards, Poverty and Inequality in the UK”, which is funded by the Joseph Rowntree Foundation.
The SNP said the research meant the Tory government “must reverse their devastating cuts” in order to lift people out of poverty.
The IFS report said that it expected “the absolute poverty rate to be 0.16ppts (106,000 people) higher in 2022–23 than in 2021–22 as a result of [the £20 cut to Universal Credit]”.
It said that other changes to the Universal Credit system had not been as impactful as the £20 increase in payments.
“Work allowances in UC – the earnings thresholds above which benefit entitlements are gradually reduced – were raised by £500 a year, and the rate at which benefits are reduced above this point (the ‘taper rate’) was reduced from 63% to 55%” in November 2021, the IFS report notes.
While these changes were permanent, the £20 weekly increase in Universal Credit payments, introduced during the pandemic, was scrapped in October 2021.
The IFS report states: “The taper rate reduction only benefits working households on UC, with bigger impacts for those with higher levels of earnings. These households tend to be further up the income distribution and often already above the poverty line.
“In contrast, the £20 uplift applied equally to all UC recipients (except those who were subject to the benefit cap) – therefore boosting incomes for those who were near the poverty line.”
David Linden, the SNP MP and his party’s social justice spokesperson at Westminster, said: “The scathing findings from the IFS report only serve to reinforce the callous nature of the Tories decision to cut Universal Credit while families were already struggling to get by and highlights the urgency of reinstating the top-up for claimants.
“Westminster must reverse their devastating cuts to Universal Credit top-up, increase it to £25-per-week and extend it to means-tested legacy benefits, as households continue to deal with the consequences of the Westminster-made cost-of-living crisis.
“Whilst the SNP government continues to use the full extent of its limited devolved powers to implement progressive policies such as the Scottish Child Payment and Best Start Grants, it is only with the full powers of independence can we truly address the issue of poverty.”
The UK Government has been asked for comment.
