Connect with us

Published

on

Ministers from Scotland, Wales and Northern Ireland are calling on the UK government to keep the £20 uplift to Universal Credit in place beyond the current October deadline.

In a letter to Work and Pensions Secretary Therese Coffey, they call for the policy to be made permanent and describe the change – which is due to come into effect in October – as “the biggest overnight reduction to a basic rate of social security since the modern welfare state began, more than 70 years ago”.

The ministers also raised concerns about the impact the reduction would have on poverty.

Prime Minister Boris Johnson during a visit to Northwood Headquarters, the British Armed Forces Permanent Joint Headquarters, in Eastbury, north west London
Image:
Some Conservative MPs have called on Boris Johnson to make the temporary £20 Universal Credit uplift permanent

It comes as Prime Minister Boris Johnson is facing mounting pressure over the matter, with some members of his own Conservative backbenches calling for the government to reverse plans to cut Universal Credit payments

The government brought in a £20-per-week uplift as a response to the COVID-19 pandemic but it is due to be removed on 6 October.

The exact date the money stops being paid to an individual will vary depending on the day they usually receive Universal Credit, so for some people this will mean the last payment at the higher rate will be at the end of September.

Writing a letter last week, Tory MPs Peter Aldous and John Stevenson said the increase should be made permanent “so that low-income families continue to be able to make ends meet”.

More on Boris Johnson

The pair said they have “very serious concerns” about the removal of the top-up and urged ministers to listen to the “widespread warnings that are coming from all quarters” on the impact the cut could have on low income families.

They also said the move would go against the prime minister’s levelling-up agenda.

In the second letter addressed to ministers on the matter in one week, ministers from Holyrood, Cardiff and Stormont criticised the UK government’s plans to axe the uplift “at a time when they need financial support the most”.

Work and Pensions Secretary Therese Coffey
Image:
The ministers are urging Therese Coffey not to axe the top-up in October

The joint letter, from Scotland’s Social Justice Secretary Shona Robison, Welsh Social Justice Minister Jane Hutt and Northern Ireland’s Communities Minister Deirdre Hargey said people will lose more than £1,000 a year if the top-up is scrapped.

In it, the ministers expressed the “grave concerns of all three devolved administrations”.

“Failing to maintain the recent uplift to Universal Credit will increase hardship and poverty for people who are already struggling,” the letter states.

“To support the social and economic recovery, particularly as we ease out of the public health emergency, we urge you to reverse this decision and to strengthen the support offered by Universal Credit, instead of weakening it.”

The Scottish Government has already voiced concerns that ending the £20 increase could reduce social security payments north of the border by more than £460 million per year by 2023-24.

And Ms Coffey is told claimants in Northern Ireland would lose £55.5 million in this financial year alone while 280,940 people on Universal Credit in Wales will be worse off.

Food poverty
Image:
Charity the Joseph Rowntree Foundation (JRF) warn against withdrawing the uplift which would see the ‘biggest overnight cut to the basic rate of social security since the Second World War’

It comes as charity the Joseph Rowntree Foundation (JRF) warned against withdrawing the uplift which would see the “biggest overnight cut to the basic rate of social security since the Second World War”.

According to the JRF, most 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.

And Citizens Advice have warned that a third of people on Universal Credit – over two million people – will end up in debt when the extra payment is removed.

Asked about the initial letter from two Conservative MPs last Thursday, the prime minister said: “The key focus for this government is on making sure that we come out of COVID strongly with a jobs-led recovery.

“And I’m very pleased to see the way the unemployment numbers, the unemployment rate has been falling, employment has been rising, but also wages have been rising. That’s the crucial thing.”

Fellow Conservative Andrew Bridgen has also joined the campaign to keep the uplift in place beyond October.

In a post on social media on Thursday, he said: “Research released today by the Joseph Rowntree Foundation reveals that 32% of working age families with children in North West Leicestershire have benefited from the £20 Universal Credit uplift that was introduced at the start of the COVID-19 pandemic.

Chancellor of the Exchequer Rishi Sunak after delivering his 'Mansion House' speech at the Financial and Professional Services Address, previously known as the Bankers dinner, at Mansion House in the City of London. Picture date: Thursday July 1, 2021.
Image:
In July, Chancellor Rishi Sunak confirmed the increase would be scrapped as it was ‘always intended to be a temporary measure’

“It has become part of people’s family budgeting in that time and I think it’s still needed. The economy is moving forward but the longer that uplift is in place now it is morally and politically impossible to remove it.

“The sooner the government come to that conclusion and remove the fear of its removal from the poorest households the better for all concerned.”

But last month, Chancellor Rishi Sunak confirmed the increase would be scrapped as it was “always intended to be a temporary measure”.

The number of people receiving the benefit has doubled during the pandemic, increasing its cost significantly.

The JRF says the policy change will have “deep and far-reaching consequences on families with children across Britain”.

Labour has said it would keep the uplift in place if it was in power and has pledged to eventually replace Universal Credit with a “fairer” system.

A UK 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.”

Continue Reading

Politics

Amended class action calls Pump.fun a ‘slot machine cabinet’ in $5.5B case

Published

on

By

Amended class action calls Pump.fun a ‘slot machine cabinet’ in .5B case

Amended class action calls Pump.fun a ‘slot machine cabinet’ in .5B case

An amended lawsuit accused Pump.fun and key Solana partners of operating an unlicensed digital casino that funneled billions through deceptive memecoin schemes.

Continue Reading

Politics

Welfare versus warfare: Sir Keir Starmer’s unresolved question – and why the PM’s pinned his hopes on economic growth

Published

on

By

Welfare versus warfare: Sir Keir Starmer's unresolved question  - and why the PM's pinned his hopes on economic growth

Welfare versus warfare: for decades, it’s a question to which successive prime ministers have responded with one answer.

After the end of the Cold War, leaders across the West banked the so-called “peace dividend” that came with the end of this conflict between Washington and Moscow.

Instead of funding their armies, they invested in the welfare state and public services instead.

But now the tussle over this question is something that the current prime minister is grappling with, and it is shaping up to be one of the biggest challenges for Sir Keir Starmer since he got the job last year.

As Clement Attlee became the Labour prime minister credited with creating the welfare state after the end of the Second World War, so it now falls on the shoulders of the current Labour leader to create the warfare state as Europe rearms.

Please use Chrome browser for a more accessible video player

UK to buy nuclear-carrying jets

Be it Donald Tusk, the Polish prime minister, arguing last year that Europe had moved from the post-war era to the pre-war era; or European Commission chief Ursula von der Leyen calling on the EU to urgently rearm Ukraine so it is a “steel porcupine” against Russian invaders; there is a consensus that the UK and Europe are on – to quote Sir Keir – a “war footing” and must spend more on defence.

To that end the prime minister has committed to increase UK defence spending to 2.5% of GDP by 2027, raiding the overseas development aid budget to do so, and has also committed, alongside other NATO allies, to spend 5% of GDP on defence by 2035.

More on Defence

Please use Chrome browser for a more accessible video player

What is NATO’s 5% defence spending goal?

That is a huge leap in funding and a profound shift from what have been the priorities for government spending – the NHS, welfare and education – in recent decades.

The Institute for Fiscal Studies’ Carl Emmerson said the increase, in today’s terms, would be like adding approximately £30bn to the 2027 target of spending around £75bn on core defence.

Sir Keir has been clear-eyed about the decision, arguing that the first duty of any prime minister is to keep his people safe.

But the pledge has raised the obvious questions about how those choices are funded, and whether other public services will face cuts at a time when the UK’s economic growth is sluggish and public finances are under pressure.

This, then, is one of his biggest challenges: can he make sure Britain looks after itself in a fragile world, while also sticking to his promises to deliver for the country?

It is on this that the prime minister has come unstuck over the summer, as he was forced to back down over proposed welfare cuts to the tune of £5bn at the end of this term, in the face of a huge backbench rebellion. Many of his MPs want warfare and welfare.

Please use Chrome browser for a more accessible video player

Starmer and Merz sign deal on defence and migration

“There’s been a real collision in recent weeks between those two policy worlds,” explains Jim Murphy, who served both as a welfare minister under Tony Blair and shadow defence secretary under Ed Miliband.

“In welfare, how do you provide for the people who genuinely need support and who, without the state’s support, couldn’t survive? What’s the interplay between that and the unconditional strategic need to invest more in defence?

“For the government, they either get economic growth or they have a series of eye-watering choices in which there can be no compromise with the defence of the state and everything else faces very serious financial pressures.”

He added: “No Labour politician comes into politics to cut welfare, schools or other budgets. But on the basis that defence is non-negotiable, everything else, unfortunately, may face those cuts.”

Please use Chrome browser for a more accessible video player

‘There are lines I will not cross’

While the PM sees this clearly, ask around the cabinet table and ministers will admit that the tough choices society will need to take if they genuinely want to respond to the growing threat from Russia, compounded by the unpredictability of Donald Trump, is yet to fully sink in.

There are generations of British citizens that have only ever lived in peace, that do not, like I do, remember the Cold War or The Troubles.

There are also millions of Britons struggling with the cost of living and and public satisfaction with key public services is at historic lows. That is why Labour campaigned in the election on the promise of change, to raise living standards and cut NHS waiting lists.

Ask the public, and 49% of people recognise defence spending needs to increase. But 53% don’t want it to come from other areas of public spending, while 55% are opposed to paying more tax to fund that defence increase.

There is also significant political resistance from the Labour Party.

Sir Keir’s attempts to make savings in the welfare budget have been roundly rejected by his MPs. Instead, his backbenchers are talking about more tax rises to fund public services, or even a broader rethink of Rachel Reeves’s fiscal rules.

Please use Chrome browser for a more accessible video player

Rachel Reeves’s fiscal dilemma

Anneliese Dodds, who quit as development minister over cuts to the overseas aid budget, wrote in her resignation letter that she had “expected [cabinet] would collectively discuss our fiscal rules and approach to taxation, as other nations are doing”, as part of a wider discussion about the changing threats.

In an interview for our Electoral Dysfunction podcast, which will be released later this summer, she expanded on this idea.

She said: “I think it’s really important to take a step back and think about what’s going to be necessary, looking 10, 20 years ahead. It looks like the world is not going to become safer, unfortunately, during that period. It’s really important that we increase defence spending.

“I think that does mean we’ve got to really carefully consider those issues about our fiscal rules and about taxation. That isn’t easy… nonetheless, I think we will have to face up to some really big issues.

“Now is the time when we need to look at what other countries are doing. We need to consider whether we have the right system in place.”

Minister for Women and Equalities Anneliese Dodds arrives for a Cabinet meeting in central London. Picture date: Friday February 7, 2025. PA Photo. See PA story POLITICS Cabinet. Photo credit should read: Jordan Pettitt/PA Wire
Image:
Anneliese Dodds quit the government over cuts to the overseas aid budget. Pic: PA

For the Labour MP, that means potentially reassessing the fiscal rules and how the fiscal watchdog assesses government spending to perhaps give the government more leeway. She also believes that the government should look again at tax rises.

She added: “We do, I believe, need to think about taxation.

“Now again, there’s no magic wand. There will be implications from any change that would be made. As I said before, we are quite highly taxing working people now, but I think there are ways in which we can look at taxation, not without implications.

“But in a world of difficult trade-offs, we’ve got to take the least worst trade-off for the long term. And that’s what I think is gonna be really important.”

Those trade-offs are going to be discussed more and more into the autumn, ahead of what is looking like an extremely difficult budget for the PM and Ms Reeves.

Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer at the launch of the 10-year health plan in east London. Pic: PA
Image:
Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer are facing difficult choices. Pic: PA

Not only is the chancellor now dealing with a £5bn shortfall in her accounts from the welfare reform reversal, but she is also dealing with higher-than-expected borrowing costs, fuelled by surging debt costs.

Plus, government borrowing was £3.5bn more than forecast last month, with June’s borrowing coming in at £20.7bn – the second-highest figure since records began in 1993.

Some economists are now predicting that the chancellor will have to raise taxes or cut spending by around £20bn in the budget to fill the growing black hole.

Former Chancellor Jeremy Hunt
Image:
Former chancellor Jeremy Hunt says Labour’s U-turn on cuts to welfare risk trapping Britain in a ‘doom loop’

Jeremy Hunt, former Conservative chancellor and now backbencher, tells me he was “massively disappointed” that Labour blinked on welfare reform.

He said: “First of all, it’s terrible for people who are currently trapped on welfare, but secondly, because the risk is that the consequence of that, is that we get trapped in a doom loop of very higher taxes and lower growth.”

‘This group of politicians have everything harder ‘

Mr Murphy says he has sympathy for the predicament of this Labour government and the task they face.

He explained: “We were fortunate [back in the early 2000s] in that the economy was still relatively okay, and we were able to reform welfare and do really difficult reforms. This is another world.

“This group of politicians have everything harder than we had. They’ve got an economy that has been contracting, public services post-COVID in trouble, a restless public, a digital media, an American president who is at best unreliable, a Russian president.

“Back then [in the 2000s] it was inconceivable that we would fight a war with Russia. On every measure, this group of politicians have everything harder than we ever had.”

Over the summer and into the autumn, the drumbeat of tax rises will only get louder, particularly amongst a parliamentary party seemingly unwilling to back spending cuts.

But that just delays a problem unresolved, which is how a government begins to spend billions more on defence whilst also trying to maintain a welfare state and rebuild public services.

This is why the government is pinning so much hope onto economic growth as it’s escape route out of its intractable problem. Because without real economic growth to help pay for public services, the government will have to make a choice – and warfare will win out.

What is still very unclear is how Sir Keir manages to take his party and the people with him.

Continue Reading

Politics

Crypto ‘control’ takes center stage at Roman Storm trial

Published

on

By

<div>Crypto 'control' takes center stage at Roman Storm trial</div>

<div>Crypto 'control' takes center stage at Roman Storm trial</div>

With the trial of the Tornado Cash co-founder ending its eighth day, a witness testified Roman Storm had control over some of the funds connected to the mixing service.

Continue Reading

Trending