The pandemic has shown it is time to address our social security system to ensure it keeps us afloat when life events threaten to pull us under, writes Joseph Rowntree Foundation Deputy Director, Policy and Partnerships Katie Schmuecker.
As an immediate priority the Government must use its forthcoming Budget to keep the £20 uplift to Universal Credit and Working Tax Credits, and extend it to people on legacy benefits who have been unjustly left behind so far. But that would just be the first step in rebuilding our social security system.
The number of people claiming Universal Credit (UC) has doubled as a result of the pandemic. The latest WASD report shows the system proved resilient in the face of this surge of new claims, thanks in no small part to the public service commitment of DWP staff redeployed to process claims. But the report also highlights many of UC’s problems, most of which – such as the type of support available to get through the five week wait, failing to check the affordability of deductions to benefit payments, or the benefits cap – are the result of policy choices. This should give us cause for optimism: different policy choices are possible.
But what is most notable about the report is what it reveals about the ability of social security to act as an anchor, holding people steady when powerful currents threaten to pull them under – whether that’s losing a job, getting sick or splitting up with your partner.
We came into the pandemic in bad shape. The arrival of Covid-19 was preceded by a decade of deprivation, with incomes falling fastest for those at the bottom. Cuts to social security were a major driver of falling incomes.
At the start of the pandemic Government rightly acted boldly, compassionately and quickly to shore things up, bringing in the £20 per week uplift to Universal Credit and Working Tax Credits. When he introduced the measures the Chancellor described them as needed “to strengthen the safety net” – a tacit admission of the problem if ever there was one.
The £20 uplift has been a lifeline for people. It has been described to us at JRF as literally covering the weekly food shop and as being the difference between light and heat and no light and heat. When you’re operating on really fine margins, you really feel the difference that £20 makes.
However, this uplift only goes some way to offsetting the cuts of the last decade. Even with it in place the WASD report paints a really concerning picture of people under severe financial strain. Getting behind on bills, unable to afford good food, skipping in meals, and living in fear of an unexpected expense such as the washing machine breaking. People have had to rely on the kindness of friends, family or charity to get by. But this pandemic is a long haul, and we’re now twelve months in. Many of these coping strategies are not going to be sustainable, and it seems likely future waves of the research will show a slow, grinding accumulation of financial hardships.
Our social security system should be there for all of us. It’s always been the case that life events can sweep you into poverty, but this last year has really hammered home that none of us knows what is around the corner. The first step towards rebuilding social security should be to keep the lifeline, which is currently due to end on 31 March. Whipping it away now, or only doing a short extension of six months will leave millions of people exposed just as the economic storm is expected to reach its height – with unemployment forecast to peak in the middle of this year and remain elevated for years to come. Ending the lifeline would see 6.2 million families face an overnight cut in their incomes equivalent to £1,040 per year, plunging an additional 500,000 people into poverty. It would also take money out of people’s pockets just at the time when we need people to spend money and increase demand in our economy.
The uplift to UC should be made permanent and extended to people claiming legacy benefits – mostly disabled people and carers – who have been unjustly excluded so far. Doing this would provide certainty for families now and support the economy through another very difficult period.
In the longer run, we need to rebuild and redesign social security so it truly acts as an anchor, holding us steady in difficult times. That will mean working with people who have experience of using the system, to design a system that is there for all of us.
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