A cabinet minister is under fire after wrongly claiming that universal credit claimants could recoup their £20-a-week benefit cut by working just 2 extra hours, when the reality is up to 9 hours, experts say.
Therese Coffey got her sums badly wrong as she ruled out a rethink on next month’s harsh reduction, which is predicted to plunge half a million more people into poverty, including 200,000 children.
Pointing to “record numbers of vacancies” as the UK emerges from Covid, the work and pensions secretary said: “I’m conscious that £20 a week is about two hours’ extra work every week.
“We will be seeing what we can do to help people perhaps secure those extra hours, but ideally to make sure they’re also in a place to get better-paid jobs as well.”
But the claim was quickly rubbished when it was pointed out that universal credit is deliberately “tapered”, so a huge chunk of the payment is taken back as earnings rise.
The respected think tank Resolution Foundation, experts in work incentives, said claimants take home as little as £2.24 for every hour worked on the national minimum wage of £8.91, after travel and childcare costs.
They would need to work an extra six hours a week to make up the £20 cut in support, rising to nine hours if they pay tax and national insurance.
The think tank said it was also unrealistic to expect people to be able to increase their hours overnight, and that to assume so ignores the reality that many claimants cannot work at all, for health or childcare reasons.
“Even for those in a position to work, a claimant on the national living wage will take home as little as £2.24 from an extra hour’s work,” said Adam Corlett, Resolution Foundation’s principal economist.
“A small increase in working hours will be nowhere near enough to cover the £20-a-week cut coming their way in just one month’s time.”
Angela Rayner, Labour’s deputy leader, was more blunt, saying: “This is a lie, and the work and pensions secretary either knows she’s lying or shouldn’t be in the job.”
But in the Commons, Ms Coffey refused to acknowledge her mistake, or apologise – while admitting that “every single UC payment depends on the individual”.
During questions, MPs were told it was not possible to provide a “robust estimate” of the effects on poverty, although several independent studies have warned it will soar.
Ms Coffey said: “As we always knew the uplift was going to be temporary, an impact assessment was not undertaken.”
Poverty campaigners have warned that the cut – worth £1,040 a year to millions of people – will be the biggest overnight reduction in social security for many decades.
Most families affected have somebody in work, they point out, despite Boris Johnson’s claim that the move is intended to encourage people into jobs.