Recommendation 104

The UK Government announced in the Budget in March 2021 that the £20 uplift would remain until the end of September 2021.265 In explaining to us why the uplift was not made permanent the Minister for Welfare Delivery noted the expense of the policy saying that the ‘cost of extending the Universal Credit uplift for a 12-month period is some £6.4 billion’.266 He went on to talk about other factors noting that the UK Government had always been clear since the uplift was introduced that it would be a ‘temporary measure to support those who were facing the most financial disruption or economic shock’267 as a result of the covid-19 pandemic. He also said that the UK Government ‘very much hope and expect that we will be in a much better position in terms of the labour market’268 by the end of September with the vaccine roll out and restrictions being lifted allowing for more people to get into work. To support people getting into work he also highlighted the 13,500 new work coaches being employed to support and empower people back into work following the pandemic.269 James Heywood from the Centre for Policy Studies gave evidence to the Work and Pensions Committee’s inquiry into DWP’s response to coronavirus highlighting that there are other reasons for not maintaining the £20 uplift in Universal Credit permanently. He argued that uplifting benefits ‘does have an impact on work incentives’270 as ‘out-of-work incomes are higher relative to in-work incomes.’271 He went on to say that this uplift has an unequal impact on claimants as it: constitutes a 36% increase in the standard allowance for a single claimant under 25. It is only a 19% increase in the standard [allowance] for a couple over 25.272 Work allowances in Universal Credit