‘Biggest overnight cut in benefits since Second World War’: Charity voices fears over end of Universal Credit uplift
A charity has raised its concerns about the looming end of the £20-a-week uplift to Universal Credit, describing it as the “biggest overnight cut in benefits since the Second World War”.
According to the Joseph Rowntree Foundation, 413 out of a total of 632 parliamentary constituencies in England, Wales and Scotland will see more than one in three families and their children affected as a result of the £1,040 a year cut.
Of these constituencies, 191 are held by Conservative MPs and 53 were won at the last general election or in a subsequent by-election.
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March: Sunak extends universal credit uplift
In some Labour-held areas, more than three-quarters of families with children will be affected.
The JRF report comes as Citizens Advice warns that if the planned cut goes ahead, 38% of those on Universal Credit would be in debt after paying just their essential bills, rising to nearly half (49%) of households on Universal Credit in so-called “Red Wall” areas.
The temporary increase in Universal Credit was introduced last year amid the COVID-19 pandemic and extended for six months in March, but MPs and charities have called for it to stay.
The cut, which is due to come into force on 6 October, is expected to have the most severe impact in Yorkshire and the Humber, the North East, North West, and West Midlands.
But the JRF has said the policy change will have “deep and far-reaching consequences on families with children across Britain”.
Katie Schmuecker, the charity’s deputy director of policy and partnerships, said: “We are just over a month away from the UK government imposing the biggest overnight cut to the basic rate of social security since the Second World War.
“This latest analysis lays bare the deep and far-reaching impact that cutting Universal Credit will have on millions of low-income families across Britain.
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April 2020: One million sign up for Universal Credit
“MPs from across the political spectrum are already expressing their deep concerns about this planned cut. Now is the time for all MPs to step up and oppose this cut to their constituents’ living standards.
“Plunging low-income families into deeper poverty and debt as well as sucking billions of pounds out of local economies is no way to level up. It’s not too late for the prime minister and chancellor to listen to the huge opposition to this damaging cut and change course.”
Two examples cited by the JRF are in Peterborough (Conservative), where 64% of working-age families with children will be hit and Bradford West (Labour), where 82% of families with children will be affected.
Naz Shah, MP for the latter constituency, said “additional funding” was needed in her area instead of the planned cut.
She said: “The same party that refused to pay for free school meals to feed hungry children is now refusing to keep the Universal Credit uplift which as research shows will put 500,000 people into poverty and impact those already struggling in my constituency.”
According to analysis from the JRF, on average 21% of all working-age families in Great Britain will see a £1,040 a year cut to their incomes on 6 October.
In the 58 seats newly won by the Tories, that average is 23%, the charity found.
Labour has said it would keep the uplift in place if it was in power and has pledged to eventually replace UC with a “fairer” system.
The party’s shadow work and pensions secretary Jonathan Reynolds said: “The government’s £1,000 a year cut will be a hammer blow to millions of families, hitting the lowest paid hardest and hurting our economic recovery.
“Time is running out for the Conservatives to see sense, back struggling families and cancel their cut to Universal Credit.”
Responding to the report, a government spokesperson said: “The temporary uplift to Universal Credit was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so.
“Universal Credit will continue to provide a vital safety net and with record vacancies available, alongside the successful vaccination rollout, it’s right that we now focus on our Plan for Jobs, helping claimants to increase their earnings by boosting their skills and getting into work, progressing in work or increasing their hours.”
The home secretary has denied the government is watering down its response to child grooming gangs after it was accused of dropping plans for local inquiries.
Yvette Cooper announced at the beginning of the year that “victim-centred, locally-led inquiries” would take place in five areas after the issue caught the attention of tech billionaire Elon Musk.
But this week, safeguarding minister Jess Phillips did not provide an update on the reviews and instead said local authorities would be able to access a £5m fund to support any work they wanted to carry out.
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Her statement led to accusations that the government was diluting the importance of the local inquiries by giving councils the choice over how to spend the money.
Asked by Anna Jones on Sky News whether the government was “watering down” its response, Ms Cooper said: “No, completely the opposite.
“What we’re doing is increasing the action we’re taking on this vile crime.”
The home secretary pointed to the rapid audit that is being carried out by Baroness Louise Casey, which will bring together the data gathered so far on grooming gangs and consider the lessons that should be learned at a national level.
She added: “Most important of all, what we’re doing is we’re increasing the police investigations, because these are dangerous perpetrators and again, they should be behind bars.”
Elon Musk has been critical of Labour’s response to grooming gangs and has called for a national inquiry.
Demands for a national inquiry into the scandal – in which girls as young as 11 were groomed and raped across a number of towns and cities in England over a decade ago – grew louder this year after Mr Musk accused Labour of failing to act on the issue on his social media platform X.
The government refused to hold a national inquiry, citing the work carried out by Professor Alexis Jay, who led the Independent Inquiry into Child Sex Abuse that looked into abuse by organised groups following multiple convictions of sexual offences against children across the UK between 2010-2014.
However, it did commit to holding local inquiries in five areas backed by £5m in funding and advised by Tom Crowther KC.
‘Political mess’
But ministers are facing a backlash following Ms Phillips’ statement in the Commons on Tuesday – made an hour before parliament rose for Easter recess – in which she said the government would take a “flexible approach” by allowing five councils to launch victims’ panels or locally led audits.
Labour MPs angry with government decision grooming gangs
With about an hour until the House of Commons rose for Easter recess, the government announced it was taking a more “flexible” approach to the local grooming gang inquiries.
Safeguarding minister Jess Philips argued this was based on experience from certain affected areas, and that the government is funding new police investigations to re-open historic cases.
Sky News presenter and former chair of the Equality and Human Rights Commission Trevor Philips called the move “utterly shameful” and claimed it was a political decision.
One Labour MP told Sky News: “Some people are very angry. I despair. I don’t disagree with many of our decisions but we just play to Reform – someone somewhere needs sacking.”
The government insists party political misinformation is fanning the flames of frustration in Labour, and that they not watering down the inquiries – on the contrary, they say are increasing the action being taken – , but while many Labour MPs have one eye on Reform in the rearview mirror, any accusations of being soft on grooming gangs only provides political ammunition to their adversaries.
One Labour MP told Sky News the issue had turned into a “political mess” and that they were being called “grooming sympathisers”.
On the update from Ms Phillips on Tuesday, they said it might have been the “right thing to do” but that it was “horrible politically”.
“We are all getting so much abuse. It’s just political naivety in the extreme.”
Read more:
Grooming gangs: What we know from the data
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Tory leader Kemi Badenoch said yesterday that she was “absolutely astonished that Labour has dropped what it said it would do in January”.
“They are clearly uncomfortable with having inquiries that are looking into this issue,”she said.
“They said that they’ll have a pot of money for councils to bid in, but why would a council bid for money to investigate itself?
“We need something that is national. We need a statutory inquiry so we can compel witnesses, and I’m going to make sure that we force another vote.”
‘We will leave no stone unturned’
Ms Phillips later defended her decision, saying there was “far too much party political misinformation about the action that is being taken when everyone should be trying to support victims and survivors”.
“We are funding new police investigations to re-open historic cases, providing national support for locally led inquiries and action, and Louise Casey… is currently reviewing the nature, scale and ethnicity of grooming gangs offending across the country.
“We will not hesitate to go further, unlike the previous government, who showed no interest in this issue over 14 years and did nothing to progress the recommendations from the seven year national inquiry when they had the chance.
“We will leave no stone unturned in pursuit of justice for victims and will be unrelenting in our crackdown on sick predators and perpetrators who prey on vulnerable children.”
Non-fungible token marketplace OpenSea has urged the US Securities and Exchange Commission to exclude NFT marketplaces from regulation under federal securities laws.
The SEC needs to “clearly state that NFT marketplaces like OpenSea do not qualify as exchanges under federal securities laws,” OpenSea general counsel Adele Faure and deputy general counsel Laura Brookover said in an April 9 letter to Commissioner Hester Peirce, who leads the agency’s Crypto Task Force.
Faure and Brookover argued that NFT marketplaces don’t meet the legal definition of an exchange under US securities laws as they don’t execute transactions, act as intermediaries or bring together multiple sellers for the same asset.
“The Commission’s past enforcement agenda has created uncertainty. We therefore urge the Commission to remove this uncertainty and protect the ability of US technology companies to lead in this space,” Faure and Brookover wrote.
OpenSea’s legal team has asked the SEC to issue informal guidance on NFT Marketplaces. Source: SEC
“In preparing this guidance, the Crypto Task Force should specifically address the application of exchange regulations to marketplaces for non-fungible assets, similar to the recent staff statements on memecoins and stablecoins,” Faure and Brookover added.
Under a notice published on April 4, the SEC said stablecoins that meet specific criteria are considered “non-securities” and are exempt from transaction reporting requirements.
Meanwhile, the SEC’s division of corporation finance said in a Feb. 27 staff statement that memecoins are not securities under the federal securities laws but are more akin to collectibles.
NFT marketplaces don’t fit broker definition, says OpenSea
Faure and Brookover argued the Crypto Task Force should also exempt NFT marketplaces like OpenSea from having to register as a broker, arguing they don’t give investment advice, execute transactions, or custody customer assets.
“We ask the SEC to clear the existing industry confusion on this issue by publishing informal guidance. In the longer term, we invite the Commission to exempt NFT marketplaces like OpenSea from proposed broker regulation,” they said.
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Under the Trump administration, the SEC has slowly been walking back its hardline stance toward crypto forged under former Chair Gary Gensler.
The regulator has dismissed a number of enforcement actions it previously launched against crypto firms and has dropped probes into crypto companies over alleged securities law violations, including one into OpenSea.
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Braden John Karony, the CEO of crypto firm SafeMoon, has cited the US Department of Justice’s directive to no longer pursue some crypto charges in an effort to get the case against him and his firm dismissed.
In an April 9 letter to New York federal court judge Eric Komitee, Karony’s attorney, Nicholas Smith, said the court should consider an April 7 memo from US Deputy Attorney General Todd Blanche that disbanded the DOJ’s crypto unit.
“The Department of Justice is not a digital assets regulator,” Blanche said in the memo, which added the DOJ “will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets.”
Blanche also directed prosecutors not to charge violations of securities and commodities laws when the case would require the DOJ to determine if a digital asset is a security or commodity when charges such as wire fraud are available.
An excerpt of the letter Karony sent to Judge Komitee. Source: PACER
In the footnote of the letter, Karony’s counsel wrote an exemption to the DOJ’s new directive would be if the parties have an interest in defending that a crypto asset is a security, but added that “Karony does not have such an interest.”
The Justice Department and the Securities and Exchange Commission filed simultaneous charges of securities violations, wire fraud, and money laundering against Karony and other SafeMoon executives in November 2023.
The government alleged Karony, SafeMoon creator Kyle Nagy and chief technology officer Thomas Smith withdrew assets worth $200 million from the project and misappropriated investor funds.
Another attempt to nix the case
The letter is Karony’s latest attempt to get the case thrown out. In February, he asked that his trial, scheduled to begin on March 31, be delayed as he argued President Donald Trump’s proposed crypto policies could potentially affect the case.
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Later in February, Smith changed his plea to guilty and said he took part in the alleged $200 million crypto fraud scheme. Nagy is at large and is believed to be in Russia.
SafeMoon filed for bankruptcy in December 2023, a month after it was hit with twin cases from the SEC and DOJ. It was also hacked in March 2023, with the hacker agreeing to return 80% of the funds.
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