Westminster’s ‘stubborn refusal’ to reinstate £20 benefits uplift ‘punishing people in poverty’ says MP

Arfon MP Hywel Williams has called on the UK Government to reinstate the £20 uplift to Universal Credit from July in order to protect vulnerable households from the cost-of-living crisis.

The £20 increase was introduced at the start of the Covid pandemic but was withdrawn in October 2021, leaving struggling families £1,040 a year worse off.

Mr Williams said that Westminster’s “stubborn refusal” to reinstate the uplift is “punishing people in poverty”, with ministers repeatedly resisting calls to reinstate it despite the escalating cost-of-living crisis.

The MP who is Plaid Cymru’s Work and Pensions spokesperson said that given the “emergency” facing households, a £20 uplift should also be extended to those in receipt of legacy benefits, and that all benefits should be also raised in line with inflation.

“Households across Wales are facing a cost of living emergency, yet Westminster’s stubborn refusal to increase the level of payments for those on Universal Credit is punishing people in poverty even further,”  he said.

“Our welfare system has been gutted by successive UK governments – both blue and red – driven by an ideological obsession with cutting the size of the state.

“We must at the very least restore a basic principle of how the system should operate – that financial support should keep up with costs of living. That’s why, as well as restoring the uplift, the UK Government must uprate benefits in line with inflation.”

‘Least generous’

Plaid Cymru are also calling on the Government to put an end to automatic deductions.

The Child Poverty Action Group have estimated that in Wales approximately 92,000 households claiming Universal Credit are receiving an average of £60 less each month than they are entitled to, because of automatic deductions from their UC payment.

These deductions affect an estimated 106,000 children in Wales.

Wales has the highest poverty rate among the four UK nations, with almost 1 in 4 (23%) people living in poverty.

Universal Credit offers just a fraction of the unemployment benefits provided by other European countries, say Plaid Cymru.

Most European countries provide a proportion of previous earnings with a minimum benchmark; the Nordic countries offer as much as 90 per cent of previous wages. In comparison, the flat-rate payment offered by the UK is equivalent to just 14 per cent of average weekly earnings, they said.

“Ahead of what will be an incredibly difficult Autumn for households, the UK Government should also reconsider its heartless policy of automatic deductions,” Hywel Williams said.

“Approximately 92,000 households on Universal Credit in Wales are receiving an average of £60 less each month than they are entitled to, because of automatic deductions from their UC payment. These deductions affect an estimated 106,000 children in Wales.

“Universal Credit is one of the least generous welfare systems in Europe. If Westminster is unwilling to show the most basic level of human decency, we must demand powers over welfare so we can create a decent welfare system for the people of Wales.”

In work

The scrapping of the uplift has hit an estimated 280,000+ people across Wales, 37 per cent of whom are in work.

The typical Welsh family on Universal Credit has also been affected by the Chancellor’s tax rises and benefit cuts in addition to an increase in food bills and a rise in heating costs of over 50%.

A 3.1% benefits increase came into effect in April, well short of the inflation rate, which is expected to hit over 9% this month.

According to analysis by the Joseph Rowntree Foundation poverty charity, this will result in the greatest fall in the value of the basic rate of unemployment benefit in 50 years.