Families heading towards 'poverty crisis', MPs warn
- Credit: PA
Families are “on the brink of financial catastrophe” after the government ended its furlough scheme and cut universal credit by £20-a-week, local MPs have warned.
Keir Starmer, Tulip Siddiq, Catherine West and Karen Buck, all Labour MPs, criticised the “two-pronged hit” they say will push people into poverty.
The furlough scheme, which saw the government pay towards people’s wages, ended on September 30. The £20-a-week uplift to universal credit, introduced during the Covid-19 pandemic, finished on Wednesday (October 6).
The government says it has “always been clear” that the measures were temporary – but north London MPs fear they’re being ended “at the worst possible time”.
Mr Starmer told the Ham&High: “Energy prices are up, food bills are up, National Insurance is going up, furlough is coming to an end, and people are waiting for hours to fill their cars with fuel.”
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The Holborn and St Pancras MP said the “cruel cut” of universal credit, which will see claimants lose more than £1,000-a-year, is “plain wrong”.
The Labour leader added: “I’m desperately worried about many of my constituents who will be forced into impossible choices this winter about how to make ends meet.”
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Housing charity Crisis has warned the universal credit cut puts at least 100,000 renting households at risk of eviction, and that local councils may be forced to provide further emergency housing – putting a greater strain on public finances.
Hornsey and Wood Green MP Catherine West said she is seeing lots of constituents in precarious positions fearing how they will now manage life, including disabled parents, people struggling with mental health problems, and freelancers.
Ms West said: “Throughout the pandemic these have been vital lifelines for many constituents, and I have been working in Parliament to demand a rethink, but my constituents now have a struggle to make ends meet as their incomes are cut just at the time the cost of living crisis and rising energy bills begin to bite.”
In Westminster North, Karen Buck says 11,740 families are in receipt of universal credit or working tax credit – one household in six, and more than one in four of all families with children.
The MP said the change to universal credit “amounts to the largest single cut in social security levels in a generation”, with a single person left with £324-a-month for living costs.
Ms Buck said: “The £20 cut from universal credit will see child poverty soar, increase hardship and debt, and almost certainly contribute to yet more homelessness – for working people as well as for those who have lost their jobs, or for whom illness or disability limits their ability to work.
“I have been fighting against this ill-judged and frankly cruel decision since it was confirmed in the summer, and will continue to do so.”
Hampstead and Kilburn MP Tulip Siddiq said the "callous" changes are a "devastating blow" for families on lower incomes. She added: “Many families are on the brink of financial catastrophe as we emerge from the pandemic and measures like the furlough scheme and the eviction ban come to an end.
"It is clear that the economic fallout of Covid-19 is far from over, yet the government is planning to scrap the universal credit uplift at arguably the worst possible time."
Local councils in north London say they will continue to provide support to families and residents with financial struggles.
Haringey leader Cllr Peray Ahmet said: “We know this has been an incredibly tough 18 months for our residents and understand the pressures that the end of furlough and the universal credit uplift will have on our community.
“Our residents are living with high levels of uncertainty and indeed the continuation of the pandemic and I would strongly urge government to re-consider their decision on the planned £20-a-week cut to Universal Credit."
Camden leader Cllr Georgia Gould said the benefits cut alongside the ending of furlough mean the borough is facing a “poverty crisis”.
"Many of this borough’s residents are seeing a drastic reduction in their household incomes just as entirely avoidable supply chain problems substantially increase their costs of living," Cllr Gould said.
"Government’s indifference to the huge pressure this puts on tens of thousands of already hard-pressed households is matched only by its incompetence in managing the undeniable reality of the UK’s post-Brexit place in a still globalised economy."
Barnet leader Cllr Daniel Thomas said schemes including tax relief help the most vulnerable, highlighting the government’s £500m winter hardship fund that will support poorer households through small grants issued by local authorities.
However, Ms Buck said the scheme will “only cover a fraction of what is being lost” from the ending of furlough and the universal credit uplift.
A government spokesperson said: “We’ve always been clear that the uplift to universal credit and the furlough scheme were temporary.
“They were designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and they have done so.
“Universal credit will continue to provide vital support for those both in and out of work and it’s right that the government should focus on our Plan for Jobs, supporting people back into work and supporting those already employed to progress and earn more.”
The government said it had spent more than £400bn on projecting jobs, businesses and public services during the pandemic – and more than £9bn on the universal credit uplift.