Poverty Week: Universal Credit

Today (Monday) marks the beginning of Poverty Week – a chance for us all to raise awareness of the impact of poverty in our own communities.

I’ve written a series of blogs on various aspects of poverty which I’ll be posting up every day this week. It seems appropriate to start with Universal Credit; the government’s new flagship benefit system which has, perversely, failed the very people it was meant to help.

Since Universal Credit was rolled out in Fife in December we’ve witnessed an astonishing increase in poverty, debt and demand on local services.

The problem stems from people having to wait five weeks or more for a first payment – a crippling situation which has forced many individuals and families to seek help from local food banks and other charities. Or take out a loan which simply adds to their debt.

On visits to a number of charities over the summer recess the feedback from everyone was consistent: Universal Credit is biting hard.

Lochgelly-based Fife Law Centre, which provides vital frontline legal services to vulnerable people has also reported a surge in referrals.

In one particular case a man had been wrongfully sanctioned and had to wait six months for his Universal Credit to be reinstated by a tribunal.

It was reported recently that the proportion of Universal Credit claims hit by deductions has rocketed from one in 10 in May 2017, to one in five in December 2017, to a third in May 2018.

New data also reveals that four in ten working people on the benefit are being told to seek more work.  

Labour has announced a major review of the welfare system, and has not ruled out scrapping the flagship Universal Credit system altogether.

Four in 10 working people on the Universal Credit – which merges six benefits into one – are being told to seek more work.

New figures show that in the Kirkcaldy and Cowdenbeath constituency there are now more than 4500 people on the benefit and more than 600 people could be facing sanctions because they are not earning enough.

According to national statistics, 107,000 people are on Universal Credit and of that figure 37,000 are in work with 14,000 working ‘with requirements.’

This means that the person is making less than the equivalent of the national minimum wage at full time hours each week.

The rules around Universal Credit mean these people are forced to increase their income – either with a second job, more hours, or a higher paid job – or face cuts to universal credit.

Working people should not be penalised because their wages have stagnated or because they’re stuck in a zero hours contract, but this Government seems oblivious to that.

That’s why Labour is committed to raising the minimum wage to a £10 per hour living wage by 2020 for employees aged 18 or over.

Labour would also ban zero-hours contracts and give all workers equal rights which would, for example, guarantee paid sick leave to any employee regardless of whether they work full-time, part-time on temporary or permanent contract.

Vulnerable people are being forced by this supposed ‘welfare’ system into greater poverty through no fault of their own.

It’s perfectly clear that Universal Credit has been a disaster and it’s about time the Government woke up.