Universal credit

Britain needs more honesty about unemployment

Is low unemployment causing us more problems than we realise? The suggestion might seem absurd, offensive even. It’s reminiscent of the days of Mrs Thatcher’s supposedly ‘cruel’ monetarism, when we had three million unemployed. Some on the fringes liked to argue that unemployment was good for the economy because it made people work harder, being fearful for their jobs. Mass redundancies would not, of course, help the economy now or at any other time. If a million people were to lose their jobs, as happened in the early 1980s, that would be a million households suffering a collapse in the spending power. As well as a human tragedy, it would

Liz Truss should increase Universal Credit

Liz Truss’s plans for a two-year energy bill freeze, estimated to cost £100 billion, underscore three points. One, the incoming Prime Minister expects the energy crisis to be with us for more than one winter. Two, she grasps how lethal it will be to the Tories’ hopes of re-election if the Treasury doesn’t intervene in a big way. Three, she is prepared to run up government debt even further in order to mitigate a crisis that threatens people’s quality of life. This third point is the crucial one. When a neo-Thatcherite like Truss concedes the merits of transformative interventions funded by borrowing, it opens up a broader conversation. If the Treasury

Rishi Sunak’s low tax pitch to MPs

Is Rishi Sunak a low tax chancellor? He certainly likes to tell anyone who will listen that he is. Yet his actions tend to suggest the opposite. The tax burden is currently on track to reach its highest level since the early 1950s, and while Sunak unveiled one big tax slash in the Budget in the universal credit taper rate cut, the main thrust of Sunak’s announcements was spend, spend, spend. Tonight Sunak addressed Tory MPs at a meeting of the 1922 committee. After announcing £150 billion in extra public spending, Sunak sought to convince his party that, despite this, he was committed to lowering taxes. Having said in the chamber that

It is hard to take Sunak’s jobs plan seriously

At some point, Rishi Sunak is going to need to pick a lane. There is only so long that the Chancellor can claim to believe that excessive borrowing is immoral while borrowing to such excess. His trick yesterday was to make all the right noises about restraint while unrolling a £500 million ‘plan for jobs’. Take away his earnest delivery and it’s still not clear whether he’s the boozer at the bar telling the world about the dangers of alcoholism, or the sensible friend ordering the taxi home. Let’s be fair. Sunak has had to deal with exceptional circumstances in the last 18 months, and is taking steps to cease

Tory MPs are changing their minds on Universal Credit

Tory MPs will not get the chance to force the government into a U-turn on scrapping the £20-a-week Universal Credit uplift this afternoon after the Speaker didn’t select their rebel amendment. Sir Iain Duncan Smith and Damian Green had tabled the motion refusing to give a second reading to the bill on the basis that the money saved by breaking the pensions triple lock should have been diverted towards keeping the uplift. The motion would not have reinstated the uplift, but would have blocked the legislation process enabling the government to suspend the triple lock so that the state pension rises in line with inflation or 2.5 per cent, rather than

Sunday shows round-up: ‘I’m not anticipating any more lockdowns’ says Javid

Sajid Javid – I’m not anticipating any more lockdowns The Health Secretary was the main guest of the day on BBC One’s Andrew Marr show, hosted this morning by Nick Robinson. Robinson asked Javid about the likelihood that Christmas could be threatened once again by lockdown. Javid responded by saying that it was highly unlikely that the UK would see itself in a similar position to last year, even with an expected surge of the virus over this winter: SJ: I’m not anticipating any more lockdowns… I just don’t see how we get to another lockdown. Vaccine passports will not go ahead Last week, the Vaccines Minister Nadhim Zahawi appeared

Covid has exposed the flaws in the welfare state

Upheavals in welfare policy have historically followed major crises such as wars, civil unrest, recessions and pandemics – the Ministry of Health itself was established in 1919. The experience of the second world war led to the creation of the contemporary welfare state. If a course of action (a furlough scheme, say) is pursued in an emergency, we know it is possible. Keep the measure in place too long and it can swiftly become an accepted norm — and politically awkward to unwind. But those expecting a post-Covid reboot of the welfare system might be disappointed. Shadow work and pensions secretary Jonathan Reynolds talked a good talk on overhauling universal

What are the limits of Boris’s ‘levelling-up’ agenda?

No doubt Boris Johnson has many qualities but the only one that comes to mind is this: he is not a conservative. That realisation may be dawning a little late on his more spirited supporters, who gave short shrift to anyone making this point during the flaxen-haired dauphin’s campaign for the crown, but it sunk in some time ago with his savvier opponents.  Boris’s non-conservatism is not the primary obstacle to the Labour party (or the broader left) regaining parliamentary power. But it is an added hindrance that could be done without. However, it also presents an opportunity to use a nominally Tory government to advance policies that wouldn’t ordinarily

Why Rishi Sunak should keep the Universal Credit uplift

Chancellor Rishi Sunak agreed to sit down with Andrew Neil on GB News last night for what turned out to be a fairly brutal grilling. The Chancellor floundered under interrogation on the pensions triple-lock, the cost of climate-friendly policies and the Tories’ big-government instincts. However, one of the more uncomfortable moments came when Neil pressed him on the future of the £20 weekly Universal Credit uplift. The benefit supplement, which also applies to the basic element in Working Tax Credit, was introduced at the start of the pandemic because the government acknowledged that the coming recession would inflict particular hardship on those already on the lowest incomes. Announcing the 12-month

Universal Credit and the future of the welfare state

Amid the many failures of public policy during the Covid crisis, one success has gone largely unnoticed. The Universal Credit system coped with a huge uplift in applications without breaking down. In February last year 2.6 million households were signed up; six months later that had swelled to 4.6 million. Some 554,000 people made new claims in the first week of lockdown, ten times the normal levels. For a benefit which not so long ago was being damned for the poor execution of its rollout, it is remarkable that the system coped. Its unexpected success offers plenty of lessons for the future of the welfare state. The digitisation of the

A Universal Credit u-turn seems inevitable

Labour’s opposition day motion calling on the government not to drop the £20 uplift in Universal Credit has just passed in the Commons – because the government abstained on the vote. This was expected, but what was more of a surprise was that there was a vote at all: no one was there to oppose the motion, to the extent that the tellers were all Labour MPs, who had all voted for the motion (normally two tellers are from the ayes and two from the noes). So why was there a division at all? As usual, the Speaker asked for those who supported the motion to say ‘aye’, which they

Katy Balls

The Tory split over universal credit

Today’s papers are splashed with good news on the pace of the vaccine rollout, with over-70s now being invited for a jab. However, the issue currently causing angst in the Tory party is universal credit. Last week, Labour attacked the government over free school meals, today they will put the government under pressure over the universal credit uplift. At the start of the pandemic in April last year, Rishi Sunak increased the payment by £20 a week.  The issue of whether that increase will continue will be discussed at opposition day debate this evening. Boris Johnson is being urged to extend the benefit increase beyond 31 March when it is currently set to

Just give them cash: a solution to the free school meal box row

The pandemic has not been kind on either libertarians or people in poverty. The libertarian argument that the state should generally leave people alone to make their own choices has not often succeeded as government, largely backed by the electorate, has chosen to respond to a collective risk with collective action, even if some of that action is compelled. For people on low incomes, Covid-19 has meant more economic hardship and an increased chance of death. It has also meant that their children are more likely to go hungry. At the Social Market Foundation, we reckon 16 per cent of children – nearly two million – went short of food last