Coronavirus: Universal credit needs ‘emergency boost’ to stop thousands being plunged into poverty, union leaders warn

‘We need a social security system that can deal with the current pandemic,’ says Trade Union Congress

(PA)

Universal credit should be given an “emergency boost” or many who have lost jobs as a result of the coronavirus pandemic risk being plunged into poverty, union leaders have warned.

The call from the Trade Union Congress (TUC) comes after the Department for Work and Pension said it had seen a surge in benefit claims, with almost 950,000 new claims since 16 March – up from around 100,000 in a normal two-week period.

Of those people who applied, around a quarter, 70,000 out of around 270,000 of new claimants in one week applied for advanced loan from the department – designed for those who “don’t have enough to live on” while they await their first universal credit payment.

But without an urgent increase to universal credit – currently around £94 per week for basic rate – the body representing almost fifty affiliated unions warns that support will be lower in real terms during the covid-19 outbreak than unemployment peaks in the 1980s and 1990s.

The TUC said that in 1984 when unemployment levels reach 11 per cent, benefits were worth a quarter of average earnings. But today - even after the recent increase of £20 a week - the basic rate of universal credit is worth a sixth of average weekly pay at £94 a week, their report added.

Union leaders also urged the government to move to a earnings-related system for benefits in the longer term based on models of other European countries. In Germany, for example, those who lose their jobs are entitled to 60 per cent of the net wage they received on average per day during the 12 months before becoming unemployed.

General secretary Frances O’Grady, said: “Unions have worked closely with 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.”

She added: “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”.

A spokesperson for the Department for Work and Pensions said: ““Universal credit is delivering vital support to millions of people in these unprecedented times and from today payments will rise by up to £1,040 a year.

“This government is committed to doing whatever it takes to help those affected by COVID-19 and has announced over £6.5bn of additional measures through the welfare system.”