Universal Credit cut will punish tens of thousands of working families and key workers in Wales

Tens of thousands of working families in Wales – including many key worker households – will be worse off as a result of the UK Government’s planned cut to Universal Credit, Wales TUC has warned.

104,000 workers in Wales are currently receiving Universal Credit – the equivalent of around 2 in 5 (37%) of all universal credit recipients. They will all be hit by the £20 per week cut.

However, the Working Tax Credit is also being cut, having also been raised by £20pw in early 2020.

So the majority of those affected by the £20pw cut to benefits this autumn will be families who are working, according to the Joseph Rowntree Foundation (JRF).

The Wales TUC says low-paid key workers will be among those worst affected.

Research published last week showed that 60,000 children in key worker households are currently growing up in poverty – with many currently receiving in-work benefits like Universal Credit.

Today’s analysis shows that the cut to Universal Credit will impact heavily on low-paid workers right across Wales

For example, in the Welsh Secretary Simon Hart’s constituency (Carmarthen West and South Pembrokeshire) nearly half (43%) of people currently receiving Universal Credit are in work – with 2,560 workers in the constituency depending on it. This number will only grow as more families transfer over from the Working Tax Credit.

The Wales TUC says the £20 increase in Universal Credit has been a “vital lifeline” for low-paid workers – and that reducing crucial in-work support will push more families below the breadline.

In addition to stopping the planned £20pw cut to Universal Credit, the union body is calling on the UK Government must increase the minimum wage to £10 an hour and urgently bring forward an employment bill to tackle insecure work.

Wales TUC General Secretary Shavanah Taj said: “Everyone should have enough money to live on.”

“But if the Universal Credit cut goes ahead tens of thousands of working families in Wales – including key workers – will be forced to get by on much less every week. It is levelling down – not levelling up.”

“UK ministers should abandon this cruel cut that will hit low-income working families. We need a social security system that helps people get back on their feet – not one that locks them in poverty.”

“And we need decent jobs on decent pay for every worker, in every part of the country.”

“That means increasing the minimum wage, investing to create good green jobs and tackling the scourge of insecure work. Cutting universal credit isn’t the way to achieve decent work.”

Alyn and Deeside MP Mark Tami said the decision to cut the £20 uplift “makes no sense.”

He said: “Snatching money from Universal Credit is exactly the wrong thing to do. Most people who get Universal Credit are in work, or disabled.

“This cut will hit hardest those people who are working in badly paid jobs, the ‘just about managing’.”

“This cut will also see more children in Alyn & Deeside pushed back into poverty. We should be fighting to end child poverty, not increase it.”

“It makes no sense to grab this money from people who need it most, from a child poverty point of view, or from an economic point of view.”

“All of this money currently gets spent in our area, in local businesses, supporting local jobs.

The Deeside MP added: “What’s the Government going to do with it instead? I doubt the answer is spend it here, quite frankly.”

“Most people in our area, if they lost their job, would need Universal Credit to survive.”