Recommendation 4

We stand by our recommendation—made in October 2020—that the increase in Universal Credit should be maintained, with annual inflation-based increases. But we recognise that, in the short term, the Chancellor faces some very difficult decisions about the public finances amid a great deal of uncertainty about the future. We have considered carefully whether the increase should last only for the duration of the effects of the pandemic, but we are conscious that the Chancellor in his Budget statement will need to make a specific announcement. We therefore recommend that, if the Chancellor cannot yet commit to making the increase permanent, he should at the very least extend it for a further 12 months. The Government should then announce its future plans for the rate of Universal Credit no later than the Autumn Statement 2021, to give claimants enough time to plan and budget. (Paragraph 40) 18 The temporary increase in Universal Credit and Working Tax Credit