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Stephen Crabb is Member of Parliament for Preseli Pembrokeshire.

When the Chancellor stood at the despatch box last week to announce the Winter Economic Plan, it was clear that he feels a deep personal responsibility to do all he can to protect lives and livelihoods.

It was a sobering message: with wage support now focusing on viable jobs, a further rise in unemployment is sadly now inevitable. Many more families will face great uncertainty and anxiety in the months ahead.

There are many pressing issues that our country will need to overcome but, in my view, the Government must immediately focus on preventing rising unemployment leading to a surge in poverty.

What was missing from the Chancellor’s statement was any mention of the crucial role being played by Universal Credit during this crisis and the bigger role it will inevitably need to play in the months ahead.

Ministers rightly acknowledged at the start of the pandemic the need to strengthen Universal Credit. The main rate of unemployment support had fallen to its lowest level in real terms since around 1990 and an uplift was an essential step in providing an effective safety net for the storm that was fast approaching.

The increase to the standard allowance Universal Credit and Working Tax Credit of £20-a-week has served as a lifeline for families who otherwise would have had to cut back on essentials, fallen behind with bills or been forced into debt.

However, this support is due to be withdrawn next April unless the Chancellor announces his intention to make it permanent. The statement on the Winter Economic Plan was a good moment for such an indication.

Withdrawing the uplift would reduce the spending power of people on lowest incomes. This will likely reduce consumption, meaning families going without essentials and household debts rising. It would also see a reduction in spending just when the economy needs it most.

In contrast, investing in social security can be an effective stimulus, with those at the bottom end of the income distribution allocating more of their budget to core bills and essentials, and therefore being more likely to spend additional income than wealthier households (who are more likely to save).

The concern over this upcoming overnight cut to incomes is shared by a coalition of over 50 leading charities, bishops and other organisations who earlier this week called on the Chancellor to make the temporary increase to Universal Credit permanent.

The letter highlights recent analysis by the Joseph Rowntree Foundation which warned that 16 million people are in households facing an overnight income loss equivalent to £1,040 a year, and half a million of those already in poverty are at risk of being plunged into deep poverty unless this support remains in place.

Several committees in Parliament have already spotted the looming cut and have flagged warnings to ministers about the need to extend the uplift. The default Treasury position in these situations, however, is to commit to nothing until absolutely necessary – usually when Number 10 gets involved.

But we know how this will likely play out: Whitehall digs in. Meanwhile constituents start to realise the change in their circumstances that is coming. Backbenchers get spooked as the emails come in. Opposition turn up the heat supported by a wide range of voices outside Westminster. Whips step in to fix the problem with Number 10. U-turn.

A better course of action is to spot the political problem on the horizon and avoid it by having a clear plan. In this case the Government has already done the hard work – it now just needs to keep doing the right thing which is maintaining this vital support.

Just over nine months ago, our party won the General Election on a promise to deliver Brexit and level up the UK, improving the living standards of parts of the UK that understandably felt forgotten.

Many of us owe our seats to voters on low incomes, with the Conservative Party now more popular among these groups than the Labour Party. Unfortunately, it is precisely the areas of the UK that were most in need of levelling up before Coronavirus that are feeling the full force of the economic storm it unleashed.

To fulfil our promise, we will need to see investment in infrastructure, housing, jobs, reskilling and education in these parts of the UK, as set out in our manifesto and the recent announcements from Government.

We must not shy away from our responsibility to tackle the root causes of poverty. As more people lose their jobs, have their pay cut and hours reduced, the numbers of people at risk of poverty and debt will grow.

It is crucial that we have a social security system that people can turn to when they hit hard times.

16 comments for: Stephen Crabb: Sunak must extend the uplift to Universal Credit – and make his intentions clear now

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