ao link
Twitter
Facebook
Linked In
Twitter
Facebook
Linked In

You are viewing 1 of your 1 free articles

Scrapping Universal Credit boost will suck £1.2bn from housing sector, warns G15

Scrapping the £20-a-week boost to Universal Credit from April will suck £1.2bn out of the housing sector, the G15 has warned.

Linked InTwitterFacebookeCard
Picture: Getty
Picture: Getty
Sharelines

Scrapping the £20-a-week boost to Universal Credit from April will suck £1.2bn out of the housing sector, @G15London has warned #UKhousing

The body representing London’s largest housing associations has analysed the potential economic impacts of the cut ahead of Wednesday’s Spring Budget, where chancellor Rishi Sunak is expected to lay out plans to protect those on low incomes as the COVID-19 pandemic continues.

Were the uplift to be dropped, people would have less money to spend on rent – particularly those affected by the benefit cap or whose private rents exceed the Local Housing Allowance – creating a “crisis of debt and evictions”, the researchers said.

Private sector tenants would be left at risk of homelessness and social landlords already struggling to meet building remediation costs would see their incomes hurt, the G15 added.

Meanwhile, the food industry could stand to take a £850m hit, while the transport industry could lose £610m and hospitality £400m.

Entertainment and culture businesses could feel a £680m impact, equivalent to 54% of all UK cinema box office revenue, according to the analysis.

Early on in the pandemic last March, the government boosted the Universal Credit standard allowance and working tax credits by £20 a week as part of measures to strengthen the welfare safety net.

But Spending Review documents published in the summer indicated that the increase would not be kept in place beyond the end of the current financial year despite a predicted surge in unemployment due to COVID-19’s impact on businesses.

Foreign secretary Dominic Raab told the BBC in January that the uplift was a “temporary measure” and that the government’s plans to support people on low incomes will be laid out at the Budget in March.


READ MORE

For too many residents, Universal Credit is still failing to prevent hardshipFor too many residents, Universal Credit is still failing to prevent hardship
Pandemic will hit housing association income by 6% this year, Moody’s predictsPandemic will hit housing association income by 6% this year, Moody’s predicts
Scottish government appeals to Westminster over housing benefit freezeScottish government appeals to Westminster over housing benefit freeze
Stamp duty holiday extended and 5% mortgage guarantee scheme introducedStamp duty holiday extended and 5% mortgage guarantee scheme introduced
The government’s stance on Universal Credit is an ominous sign of its prioritiesThe government’s stance on Universal Credit is an ominous sign of its priorities

The G15 has already added its voice to widespread calls for ministers to maintain the £20-a-week uplift beyond the current financial year. According to the Treasury, the £20 uplift costs £6bn a year.

The G15 used Office for National Statistics data on how low-income households spend their money to identify where the £6bn cut would likely fall on the economy.

It also highlighted the impact on London boroughs of scrapping the uplift, based on claimant data.

In Croydon – where the council has already declared it is effectively bankrupt – residents would have £47m less to spend over the course of a year.

That is equivalent to the combined turnovers of 71 small and medium-sized business (SMEs) in the borough, the G15 said.

Across London as a whole, residents would lose £685m, equivalent to 1,307 SMEs’ turnover.

G15 residents have reported being helped to feed their families, heat their homes, homeschool their children and avoid severe financial hardship during the COVID-19 pandemic thanks to the £20 uplift, the group said.

“Taking money away from those who most need support will increase hardship for those affected, and shouldn’t be government policy in the middle of a crisis,” it added.

“Removing the uplift means less money spent in the economy once restrictions are lifted, which will mean more businesses go under or cut staff.

“This ripple effect will mean hardship for more families, ruin for more businesses, and ultimately more claimants needing government support.”

Sign up for our daily newsletter

Sign up for our daily newsletter
Linked InTwitterFacebookeCard
Add New Comment
You must be logged in to comment.