Universal credit cuts 'could push 60,000 Scots into poverty'

Plans to abolish the additional £20-a-week Universal Credit payment could push more than 60,000 Scots into poverty, the Scottish Government has warned.

Scrapping the emergency benefit increase introduced during the coronavirus pandemic and reinstating the minimum income floor for the self-employed would reduce people’s total income by up to £476m over the next financial year.

The Scottish Government calculates that this will leave an additional 60,000 people – including 20,000 children – in poverty.

That would amount to an increase of two percentage points compared to if the benefit uplift was retained.

But the UK Government argues the Scottish Government has “significant welfare powers” to help those with the lowest incomes.

Social security secretary Shirley-Anne Somerville said: “We are very concerned about the economic impact of the pandemic on people, particularly those on low incomes.

“This report highlights that if these cuts go ahead, hundreds of thousands of households in Scotland will see their incomes drop by more than £1000 per year. This could push even more people into poverty.”

Somerville, along with Welsh and Northern Irish ministers, wrote to the UK Government’s work and pensions secretary Therese Coffey to call for the £20 increase to be made permanent and extended to other benefits due to be replaced by Universal Credit.

She added: “Last year the Scottish Government invested nearly £2bn to support low-income households and to tackle poverty. We have also introduced the new Scottish child payment to tackle child poverty head on.

“The UK Government must match our ambition and support people in need. They can start by using next week’s spending review to confirm that they will keep the £20 uplift to Universal Credit and working tax credits, and give people the certainty they need, not wait until April 2021 when people will face a cliff edge.”

A UK Government spokeswoman said: “The UK Government is wholly committed to supporting the lowest-paid families, boosting welfare support by £9.3bn in response to the pandemic as well as introducing income protection schemes, mortgage holidays and additional support for renters, and constantly keep these measures under review.

“Meanwhile, Scotland has significant welfare powers and can top up existing benefits, pay discretionary payments and create entirely new benefits in areas of devolved responsibility.”

Poverty Alliance director Peter Kelly said: “Increasing Universal Credit payments was the right thing to do when the pandemic first struck. It has been a vital lifeline for hundreds of thousands and it’s right that this support remains in place.

“More people will be swept into even deeper poverty if the £20 uplift is cut.

“Lone parents will be particularly hard hit, but the impact will be felt by all groups which need this vital support.

“We would urge the UK Government to act on this important evidence, to keep households afloat by retaining this lifeline.”