Rishi Sunak has confirmed that the £20 temporary increase in Universal Credit introduced in March 2020 will be phased out at the end of September — a move which is becoming increasingly disputed as those on both sides of the House fight to make it permanent.
There is no doubt the reduction will have an impact on beneficiaries’ lifestyles, but we cannot lose sight of the reason this measure was introduced: to address the short-term impact of Covid and support those in greatest need, to get through the financial disruption caused by the pandemic. The overall welfare bill increased by an additional £6 billion to support the almost 6 million people on Universal Credit benefits. However, as we head out of the pandemic and our economy reverts back to its old ways (or tries to), it’s reasonable for Covid fiscal stimulus packages to subside. The Government was very reactive to offer this support, and it must now be allowed to pull back and refocus spending to meet the changing needs of society. Let’s not allow the nanny state to become the new normal.
Covid has increased the number of people on Universal Credit by over 2.5 million. Reintegrating these people into the workforce or helping them gain the skill to enter into a new area of our new economy is essential. Not only is this high level of spending unsustainable in the long run, but if we don’t want to see our children’s children still burdened by the Covid debt, then a strong employed economy is the only way forward.
Already 88.1 per cent of the UK adult population has received the first dose of a Covid-19 vaccine. Restaurants, bars and shops are reopening. People are returning to the office, and life in general is reverting to some semblance of normality. The economy is rebuilding. Now we need a strong workforce to facilitate growth.
Recent news has highlighted the lack of key workers in health and the care system, but the labour shortage is widespread. Empty supermarket shelves bear witness to the ongoing supply chain issues due to a shortage of lorry drivers. Fruit and vegetables are left unpicked or unpacked. The hospitality industry is struggling to reopen due to a lack of key personnel. If we ever hope to fully recover from the pandemic, we must fill these shortfalls.
This Government’s levelling up agenda is not about support, but about creating opportunities to help people progress. To really support people long-term, the focus must be on getting those who can work get back into long-term jobs. In April 2021, the Government increased the living wage to improve earnings by £350 a year. There are other schemes to help improve job opportunities and increase wages, such as the Apprenticeship Scheme, providing 719,000 people with apprenticeships in 2019/20, each costing around £3,000 per person, or the National Funds scheme, helping all adults get their NVQ Level 3 qualifications, costing about £3,500 per person. These schemes are not cheap, but upskilling the workforce to gain work and higher earnings is the best way to improve lives in the long term. With Brexit and Covid coming together, never has there been a greater demand for a UK-based skilled workforce and this is where the governmental focus and state funding need to be.
There will always be people who because of their circumstances cannot work, or are unable to earn enough to live without the support of Universal Credit. It is these people for whom the Government needs to refocus its support. If the Universal Credit system is not working, and is leaving such people below the poverty line, then that should be addressed in a proper review – not through a short-term fix of a blanket increase in benefits.
The UK has had more than a year of unprecedented additional borrowing, accumulating to around £300 billion from April 2020-April 2021. The only way to ensure that this financial burden is not one that our grandchildren will be repaying for the rest of their lives is for the Government and everyone in the country to focus on rebuilding and driving the economy forward. This can only happen if we get people back to work. Only high employment and a healthy economy will provide the tax revenues in the long term to support those in real need who cannot support themselves.
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