Connect with us

Published

on

Universal Credit claimants will begin to be told how changes to the benefits system will bolster their incomes ahead of Christmas – but there are warnings that millions of families will still be worse off overall.

At his autumn budget last month, the Chancellor Rishi Sunak announced a reduction in the Universal Credit taper rate from 63% to 55%, along with a £500 per year increase to claimants’ work allowances.

Mr Sunak promised the alterations would be introduced no later than 1 December.

But the government has now hailed how the changes – which they estimate will see almost two million of the lowest income working households on Universal Credit around £1,000 a year better off on average – are being brought in a week earlier than planned.

The Department for Work and Pensions said, by bringing in the changes today, up to 500,000 more people could benefit before Christmas.

Claimants will be notified how much Universal Credit they will be awarded in their usual monthly statement, with the first of those to reflect the changes being issued today.

The chancellor said: “We want this to be a country that rewards hard work by helping the lowest income families keep more of their hard-earned cash.

More on Rishi Sunak

“That’s why at the budget, I announced an effective tax cut for two million people worth over £2bn.

“These changes come into force today and will mean that with Christmas approaching, hard-working families will keep an extra £1,000 a year of what they earn.”

Work allowances are the amount Universal Credit claimants can earn before their benefit payment is affected.

The taper rate is the amount a person’s Universal Credit is reduced by when their earnings are more than their work allowance.

Please use Chrome browser for a more accessible video player

Autumn Budget 2021: Alcohol, fuel and UC announcements

The DWP said the increase in work allowances by £500 per year will mean many families will be able to earn over £500 per month before their benefits are tapered off.

Mr Sunak’s changes at last month’s budget followed criticism of his decision to not continue a £20 per week uplift to Universal Credit that had been introduced at the beginning of the coronavirus pandemic.

And charities warned that, despite Mr Sunak’s boost to work allowances and the taper rate, the end of the £20 per week uplift would still leave some families struggling.

Karl Handscomb, senior economist at the Resolution Foundation, said: “The welcome boost to Work Allowances and the taper rate in Universal Credit will benefit over two million families next year, who will be over £1,000 better off on average.

“This represents a major living standards boost to low-income families, by improving people’s incentives to enter work, and allowing them to keep more of their earnings.

“But while these changes mean more support for higher-earning families on Universal Credit this winter, the recent £20 a week cut in support means that 3.6 million families will still be worse off overall, particularly those who have lost their jobs, or who are unable to work.”

Subscribe to the All Out Politics podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker

Iain Porter, policy and partnerships manager at the Joseph Rowntree Foundation, said: “The reduction in the taper rate and increase in the work allowances is a significant and positive step for supporting working families and shows a serious intent to turn the tide of rising in-work poverty.

“However, the measures implemented today do nothing to support many families who are currently seeking work, or who are unable to work, due to caring responsibilities, sickness or disability.

“The recent £20-a-week cut to Universal Credit has now reduced the main rate of out-of-work support to its lowest levels in real terms in 30 years.

“Families on low incomes are facing mounting pressure on their finances as the cost of energy and prices on the shelves continue to rise.

“The government must ensure that support offered by our social security system allows those unable to work to live with dignity, and provides families seeking work with the stability needed to seize opportunities.”

Continue Reading

Politics

Concessions to welfare reforms to be revealed after Labour backbench rebellion forces government retreat

Published

on

By

Concessions to welfare reforms to be revealed after Labour backbench rebellion forces government retreat

Changes to welfare reforms, forced on the government by rebel Labour MPs, are being revealed today ahead of a crucial vote.

The original bill restricted eligibility for the personal independence payment (pip) and cut the health-related element of universal credit (UC).

The government, which insisted welfare costs were becoming unsustainable, was forced into a U-turn after 126 Labour backbenchers signed an amendment that would have halted the bill at its first Commons hurdle.

Explainer: What are the welfare concessions?

While the amendment is expected to be withdrawn, after changes that appeased some Labour MPs, others are still unhappy and considering backing a similar amendment to be tabled today.

Please use Chrome browser for a more accessible video player

Starmer defends welfare U-turn

Here are the main changes to the UC and pip bill:

• current pip claimants will keep their benefits; stricter eligibility requirements will only apply to new claims from November 2026
• a review of the pip assessment, which will have input from disabled people
• existing recipients of the health-related element of UC will have their incomes protected in real terms

More on Benefits

Work and Pensions Secretary Liz Kendall said in a statement that the legislation now aims to deliver a “fairer, more compassionate system” ahead of the second reading and vote on Tuesday.

“We must build a welfare system that provides security for those who cannot work and the right support for those who can. Too often, disabled people feel trapped, worried that if they try to work, they could lose the support they depend on.

“That is why we are taking action to remove those barriers, support disabled people to live with dignity and independence, and open routes into employment for those who want to pursue it.

“This is about delivering a fairer, more compassionate system as part of our Plan for Change which supports people to thrive, whatever their circumstances.”

Work and Pensions Secretary Liz Kendall
Image:
Work and Pensions Secretary Liz Kendall insists welfare reforms will create ‘a fairer, more compassionate system’. Pic: PA

On Saturday, Sir Keir Starmer said fixing the UK’s welfare system was a “moral imperative”. The government claimed cuts to sickness and disability benefits would shave £5bn off the welfare bill and get more people into work.

The Resolution Foundation believes the concessions could cost as much as £3bn, while the Institute for Fiscal Studies warned that the changes make tax rises more likely.

Read more:
Starmer’s most damaging U-turn yet
Liz Kendall defends welfare retreat

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Health Secretary Wes Streeting told Sky News that welfare bill changes have put Labour in a much better position ahead of tomorrow’s vote.

On Sunday Morning with Trevor Phillips, Mr Streeting said: “There were things that we didn’t get right, we’ve put right, and there’ll be a debate about future amendments and things, I’m sure, as it goes through in the usual way.”

Streeting talking to Trevor Phillips
Image:
Talking to Sky News about the welfare reforms, Health Secretary Wes Streeting said there were things Labour ‘didn’t get right’

On the same programme, shadow work and pensions secretary Helen Whately repeatedly refused to say whether the Conservatives would back the bill, but would review the proposals after the minister’s statement later.

“We have said that if there are more savings that actually bring the welfare bill down, if they’ll get more people into work, and if they commit to using the savings to avoid tax cuts in the autumn, which looks highly unlikely at the moment, then they have our support.”

The Liberal Democrats plan to vote against the bill and have called for the government to speed up access-to-work decisions to help people enter the workforce.

Continue Reading

Politics

Welfare concessions should give people ‘peace of mind’, says Wes Streeting

Published

on

By

Welfare concessions should give people 'peace of mind', says Wes Streeting

Wes Streeting has suggested he is confident the government will now win a crunch vote on welfare cuts after Sir Keir Starmer made a number of concessions to prevent a damaging rebellion.

The health secretary told Sunday Morning With Trevor Phillips the alterations to the controversial welfare bill meant those in receipt of benefits now had “peace of mind”.

Asked whether he was confident the government would now win a vote on the reforms scheduled for Tuesday, Mr Streeting said: “Yes.

Politics latest: Minister tells Israeli embassy to ‘get your own house in order’ amid Glastonbury row

“I think the changes that were made this week have put us in a much better position, not just on the vote on Tuesday, but on the substance of the package – because as a result of the changes, it means anyone watching this morning who’s in receipt of PIP, Personal Independence Payments, now has the peace of mind of knowing that their situation is protected.”

It comes after the prime minister carried out the most significant U-turn of his premiership at the end of the week in order to quell a growing rebellion over his welfare package.

More than 120 Labour MPs had signalled they were prepared to vote down the bill next week after they signed an amendment that would have stopped its progress through parliament – citing concerns about the impact on the most vulnerable and the lack of proper consultation with disabled groups.

More on Benefits

The scale of the rebellion – and the fact it spanned all wings of the party – alarmed Downing Street and led to Sir Keir making a number of changes to diffuse the anger.

Originally, the bill set out to tighten the eligibility criteria for PIP – money that is given to people, some of whom are in work, who have extra care or mobility needs as a result of a disability.

People who claim it are awarded points depending on their ability to do certain activities, such as washing and preparing food, which influences how much they will receive.

Currently claimants need to score a minimum of eight points across a range of tasks to qualify for the daily living element (there is a mobility element that is not affected by the plans). Under the new rules people will need to score a minimum of four points in at least one activity to qualify.

However, the changes made by Sir Keir mean existing PIP claimants will now be exempted from the stricter new criteria.

Alterations to Universal Credit, another type of benefit, mean that the health top-up will only be cut and frozen for new applications, as opposed to existing ones.

Read more:
What are the concessions to the welfare bill – and will MPs back it?
Welfare has been Starmer’s most damaging U-turn yet

Mr Streeting declined to say whether he thought those who decide to vote against the bill should lose the party whip, which would force them to sit as an independent MP in the Commons.

He said it was “not my decision”, but added that there was an “expectation that Labour MPs vote for the whip”.

In a series of interviews over the weekend, the prime minister acknowledged there had been some mishandling of the welfare debate and said he was “heavily focused” on world affairs before he was forced to U-turn on his welfare bill.

In a piece in The Sunday Times, Sir Keir said he was occupied with the G7 and NATO summits and the escalating tensions in the Middle East for much of the past two weeks.

“Getting it right is more important than ploughing on with a package which doesn’t necessarily achieve the desired outcome,” he said, adding that all the decisions made were his and that “I take ownership of them”.

Continue Reading

Politics

PM and ministers now admit welfare reforms went too far

Published

on

By

PM and ministers now admit welfare reforms went too far

It was only 10 days ago that embattled Welfare Secretary Liz Kendall, trying to convince MPs to back her reforms, said ministers were “firm in our convictions”.

People on Personal Independence Payments (PIP) and universal credit were too often being “written off”, while the welfare bill was becoming unsustainable.

Politics latest: Minister condemns ‘appalling’ anti-IDF chants at Glastonbury

After an unprecedented rebellion by Labour MPs forced the prime minister into a significant retreat, today sees an interesting shift in those convictions.

Ms Kendall’s colleague Wes Streeting, who was drafted onto calls with angry backbenchers, tells Sky News he didn’t want disabled people in his constituency surgeries on a Friday, telling him they were worse off when that was not the intention.

This is exactly what many Labour MPs and disability groups were arguing was inevitable if current claimants were stripped of their benefits.

Sir Keir Starmer, in a series of Sunday newspaper interviews in which he reflects on mistakes, says he now believes there was no point ploughing ahead with something which “doesn’t necessarily achieve the desired outcome”.

Read more:
Supermarkets being told to cut shoppers’ calories in obesity crackdown
What are the concessions to the welfare bill – and will MPs back it?

Having rushed forward these reforms to save £5bn in the spending review, it now seems ministers are admitting the package needed more thought.

The welfare bill is rising sharply, and many voters broadly support the idea of tackling it.

But even if the draft legislation, which will affect new benefit claimants only, is voted through (and that’s still an “if'”, with dozens of Labour MPs still weighing it up), this debacle – for many MPs at least – goes to the heart of whose side the government is on.

Continue Reading

Trending