Paul Maynard was Parliamentary Under Secretary of State at the Department for Transport from July 2019 to February 2020. He is MP for Blackpool North and Cleveleys.
So in the end, the Spending Review didn’t contain the answer we had hoped for when it came to whether the Universal Credit uplift will remain. To be fair, we weren’t given a ‘no’ either – and so the chance to keep lobbying, and to look at how the £5.7 billion can be spent most effectively, can continue, with Ministers remaining keen to engage.
The eyes of millions of families and many leading charities will not be averted, however. They will still want sufficient warning to plan for the future, and will be hoping that the £20 UC uplift, which was introduced at the start of this crisis, will remain, and be extended to families on legacy benefits (notwithstanding a Government desire to continue moving people off such benefits and on to UC).
Making the money we spend work harder and achieve more by being spent in a targeted manner is crucial. The last few weeks have demonstrated that there is strong public and political will in our country to solve poverty. The debate about tackling holiday hunger showed a desire for creative strategies to tackle problems at root. It was good to see that the Government did not want to just simply stick a plaster over children going hungry by providing vouchers for a fortnight, but instead committed a longer-term investment to support the most vulnerable.
As well as seeking to ensure that no child goes hungry this winter, Ministers also want to ensure that every child can reach their full potential: that will take a longer-term plan to improve work, housing, schooling, health and communities – all of which the Conservative Government is committed to. Part of this it means supporting families facing hardship now.
The opportunity thus remains to make a strong statement on our commitment to supporting low-income families by keeping the lifeline of the £20 uplift to UC. Going into this crisis, the Government recognised that our social security system was not sufficient in protecting people from hardship and swiftly implemented the uplift.
Not only did it keep millions afloat, but it was an effective economic stimulus. By targeting spending on low-income, low-wealth households who need to spend the money rather than save it, that spend was injected straight back into the economy, right when it was needed most. Implementing this uplift was the right thing to do then and making it longer-term will be the right thing to do now. It is not as if the economic aspect of the crisis is diminishing, after all.
The Joseph Rowntree Foundation arguea that if this uplift ends in April as planned, then 16 million people will be in families who will lose £1,040 from their annual incomes overnight – pulling 700,000 more people into poverty, including 300,000 children.
Many constituents tell me that they are concerned about their ability to cope with such an income loss, when the pandemic has already caused them to lose so much. Furthermore, cutting social security spending will act in the opposite way to the initial stimulus – by taking money out of an already extremely weak economy, we will risk more jobs and hinder our economic recovery.
Such a move would hit some towns and cities harder than others, especially those where there are a high number of families who rely on Universal Credit, such as in my own constituency of Blackpool North & Cleveleys. One in five working-age adults receive Universal Credit here and, as a town with a proud record of tourism and hospitality, we have been ravaged by the pandemic and lockdown restrictions.
I have already seen the devastating impact on our local economy and, if a cut goes ahead, falling incomes will inevitably lead to even lower spending, risking more jobs and income loss. And whilst I loathe with equal frustration the phrases “Red Wall” and “Blue Belt”, families in these regions are 50 per cent more likely to lose out than those in the South East.
We have had promising news in commitments to green infrastructure, defence spending and ‘levelling up’ funding (another annoying phrase) that will both sustain existing jobs and create new ones across the North.
However, in order that we see the benefit of this investment, we must enable our social security system safety net to play its role in supporting families to keep them out of hardship. A strong social security system acts as the automatic stabilisers for local economies when hit by the uncertainty of job loss and sickness.
But it should also be a helping hand throughout life’s ups and downs – giving families the security to move back into work after having a baby, retrain into a new industry and seize the opportunities as economies reshape themselves.
The investment into Universal Credit during this crisis has added some security during a time of uncertainty and fear. This crisis has demonstrated that none of us know what is around the corner, and we all need a social security system that we can rely on.