Agenda item

            The Committee was reminded that the Council, at its meeting on 7th January, had passed the following motion relating to Universal Credit, which had been proposed by Councillor Heading and seconded by Councillor Lyons:

“This Council recognises the positive impact of the £20 uplift on Universal Credit implemented in April 2020.

The Council also recognises that, since March 2020, the unemployment claimant count has doubled to at least 60,000 in Northern Ireland and with a recession expected in the spring only to worsen the situation for many households.  The Chancellor of the Exchequer has failed to provide certainty that the £20 uplift on UC will remain beyond March 2021 meaning many families are potentially facing a loss of £1,040 a year to their incomes overnight. Charity Action for Children has warned that more than one in 10 families in the north are already having to choose between paying bills and eating meals. The Council calls on the UK government to put a protective shield around struggling families by ensuring March's Budget makes clear that Universal Credit will not be cut by £20 a week in the spring. Finally, the Council agrees to write to the Chancellor of the Exchequer requesting they maintain the £20 uplift on Universal Credit in April 2021 and extending the £20 uplift to all legacy benefits.”

            The City Solicitor reported that a response had been received from HM Treasury, on behalf of the Chancellor of the Exchequer.

            The response had explained that the £20 per week in the Universal Credit standard allowance and Working Tax Credit basic element formed just one part of a wide-ranging package of support which the Government had provided to protect people’s jobs and referred also to income support schemes, mortgage holidays, support for renters, a £500 million local authority hardship fund, £500 payments to help those on low income to self-isolate under NHS Test and Trace, a £170 million Covid Winter Grant Scheme and help with utility bills.

            The response had gone on to state that, in order to support families who relied on the safety net of the welfare system, the Minimum Income Floor for self-employed Universal Credit claimants had been suspended temporarily and the Local Housing Allowance Rates for Housing Benefit and Universal Credit had been increased to cover the bottom third of local rents. The Government was also spending £7.4 billion on its package of increased welfare support this year.

            It was pointed out that the increase in Universal Credit and Working Tax Credit was aimed specifically at providing significant temporary support to low income families who may have seen their income fall as a result of the immediate impact of the Covid-19 crisis and was due to end in April, 2021.

            It indicated also that the Government would, as it had done throughout the current crisis, continue to consider the most appropriate forms of support as the public health and economic situation developed. However, as an illustration, extending the £20 per week increase by a further twelve months would cost over £6 billion, which would be equivalent to adding 1p to the basic rate of income tax and increasing fuel duty by 3p.

            The response had concluded by confirming that the Government was, moving forward, focused on supporting people by helping them gain employment and was making up to £30 billion available through the Plan for Jobs initiative. This included launching the £2 billion Kickstart Scheme to create hundreds of thousands of fully subsidised jobs for young people and investing £8.6 billion in infrastructure, decarbonisation and maintenance jobs to create jobs.

            The Committee noted the response and agreed that a further letter be forwarded to the Chancellor of the Exchequer highlighting the importance of the uplift payment, given the  high levels of poverty in Northern Ireland, and urging him to extend it beyond March, 2021.