Our social security system is broken
The cost of living crisis has loomed over most of us. But it has hit those on universal credit particularly hard after a decade of cuts and freezes, leaving universal credit too low to cover basics, despite its welcome inflation matching increase this April.
What does someone receiving universal credit need to live? The government doesn’t know. The official position of the government is that there “is no objective way of deciding what an adequate level of benefit should be”, and therefore they do not intend to try to find out.
In fact, the government hasn’t tried to find out if people relying on benefits have enough to live on since the early 1960s, in a report that was never published.
Working on the All-Party Parliamentary Group (APPG) on Poverty’s new report, Enough to be able to live, we heard a lot of shocking and distressing evidence about the social security system’s failures.
This attitude of having no interest in what people need, or how people live when they’re not given enough to afford essentials, unfortunately underpins the social security system. According to evidence submitted by the Trussell Trust, who have expanded their food bank operation from just over a million food parcels in 2015 to nearly three million this year, universal credit is not, in fact, a social security system providing genuine financial security.
Instead, it’s functioning as a debt collector. Nearly half of households on universal credit are, in fact, paying off debts on the advance payments they need, because there’s a requirement that claimants have to wait five weeks for their first actual payment.
Landlords, supermarkets, or bills don’t tend to give you a five-week delay on having to pay for essentials. Similarly, people under 25 don’t eat, heat, or pay rent dramatically less than 26-year-olds do, but the even lower under-25 rate and five-week delay still push people into poverty.
On top of that, nobody could really claim to be surprised by the evidence submitted by the Child Poverty Action Group that one of the main drivers of rising child poverty is the two-child limit, which means no universal credit for third and subsequent children.
Who would design a system this way if they had any interest in the lives of the people using this system? The more you look, it gets less surprising that the people who designed this system never researched what people on benefits need to live. It also gets more shocking.
Several of the organisations submitting evidence to our APPG report disputed the government’s position that there “is no objective way of deciding what an adequate level of benefit should be”, and we agree. There has been a considerable amount of research done by academics, charities, and think tanks on this issue, and the conclusions are very clear.
First, if you want to reduce poverty in the UK, we found the most effective thing to do is to increase the overall level of benefits. Since the government believes it can’t work out how much this should be, we propose an independent panel to recommend benefit levels, based on independent research.
We also suggest that as a starting point, we enshrine in law the Trussell Trust’s and Joseph Rowntree Foundation’s call for universal credit to at least cover food, bills, and basic goods. This would represent a first step towards a level of benefits sufficient to provide for dignity and participation in society.
Secondly, the system should stop arbitrarily penalising people using the system. Deductions should be capped at 15% and advances should be grants, not loans. The two-child limit and under-25 rate must go.
As well as guaranteeing an annual rise in line with inflation (including Local Housing Allowance, which remains frozen), the government should learn from the detrimental consequences of the extended delay in adjusting benefits to reflect the actual inflation rate. Options would include biannual upratings when inflation is so high and use of the Office for National Statistics low-income inflation index. In addition, Carer’s Allowance should be increased to the level of Employment Support Allowance.
Our social security system shouldn’t be pushing people into further poverty and insecurity; we shouldn’t need an APPG report to tell us that. The people who told us about their own experiences of the social security system weren’t asking for much – over and over, they told us that they don’t have enough to live on, to buy essentials, to seek new careers or skills or to enjoy genuine security. Until we link our benefit system to actual need, their lives will depend on arbitrary political will, and we’ll all suffer for it.
David Linden MP writes alongside Baroness Ruth Lister, Co-Chairs of the APPG on Poverty. The APPG’s full report, Enough to be able to live, can be found here.
David Linden is the former Scottish National Party MP for Glasgow East and Chair of the APPG on Poverty.
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