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Universal Credit and Working Tax Credit Reductions

Volume 685: debated on Monday 30 November 2020

Whether she has made an assessment of the potential effect on (a) working age and (b) child poverty of reducing (i) universal credit and (ii) working tax credit by £20 a week in April 2021. (909472)

Analysis from Her Majesty’s Treasury shows that the Government’s interventions have supported the poorest working households the most, with those in the bottom 10% of the income distribution seeing no reduction in income. As the Government have done throughout this crisis, they will continue to assess how best to support low-income families, which is why we will look at the economic and health context in the new year.

In 2018-19, 34.8% of children in my constituency were living in poverty when housing costs were taken into account, and from January to August this year there was a 68% increase in the number of families claiming universal credit. Last week the Chancellor told us that the

“economic emergency has only just begun”—[Official Report, 25 November 2020; Vol. 684, c. 827.]

and that unemployment is set to rise for months to come. When the Minister knows that more and more families in Nottingham are going to face wage cuts and job losses, how can he argue that universal credit should be cut in just a few months’ time?

First, I do not recognise those figures and certainly nobody is making that case. The Chancellor of the Exchequer has confirmed the universal credit uplift until March 2021, and it is right that we wait for more clarity on the national economic and social picture before assessing the best way to support low-income families moving forward. I would just gently say to the hon. Lady that the uplift is just one part of a comprehensive package that we have put in place to support people through this most difficult of periods.