Calls for ’emergency’ boost to Universal Credit

The TUC has today called for an ’emergency’ boost to Universal Credit to help people get through the coronavirus outbreak. The union body says that without an urgent increase unemployment support will be lower in real terms during the coronavirus outbreak than during the mass unemployment peaks of the 1980s and 1990s.A new report published by the TUC reveals that:

• In 1984 when unemployment levels were at 11% unemployment benefit was worth a quarter of average earnings.
• In 1993 when joblessness rose to over 10% the basic rate of unemployment benefit was worth a fifth of average pay.
• Today – even after the recent increase of £20 a week – the basic rate of Universal Credit is worth just a sixth of average weekly pay at £94 a week.

The report says that with unemployment set to rise sharply as a result of coronavirus hitting businesses and the economy more support is needed to help those who lose their jobs.

Unemployment support in the UK compares poorly with other European countries, where benefits are paid as a proportion of previous earnings, ranging from 60% in Germany to 90% in Denmark.

The TUC says that in the long term the government should move towards an earnings-related system. But as this cannot be implemented swiftly, it calls for ministers to urgently raise the basic level of Universal Credit for the duration of the outbreak to 80% of the real living wage – or £260 a week.

The report points out that even to restore support to the level at the start of the 1980s would see a significant increase to £165 a week.

The report also urges ministers to:

• End the five-week wait period for Universal Credit by replacing emergency Universal Credit loans with emergency grants so claimants don’t build up debts waiting for payments
• Speed up the application process for Universal Credit by not requiring claimants to have a telephone interview

• Raise Child Benefit payments.
• Ensure no-one loses out by removing the Benefit Cap.

The TUC says that while some of these changes may be time-limited a national conversation must begin about repairing the UK’s safety net. Around 14 million people were already living in poverty before the virus struck.

The report says that in addition to boosting Universal Credit the government must urgently look at fixing Britain’s “broken” sick pay system.

The TUC is calling on ministers to raise sick pay from £94 a week to the equivalent of a week’s pay at the Real Living Wage – around £320 a week. And it wants the government to scrap the minimum earnings threshold for sick pay that is currently preventing two million workers from qualifying for it.

TUC General Secretary Frances O’Grady said “Unions have worked closely with the government during this crisis to protect livelihoods. But there is still more to do. People who lose their jobs must get the support they need to make ends meet and to get back on their feet.”

“If we don’t urgently boost Universal Credit many risk being plunged into poverty. That is not right. We need a social security system that can deal with the current pandemic and beyond. It’s time to start a national conversation about how we repair Britain’s safety net and help those who fall on hard times to bounce back.”