A government cut in universal credit could raise poverty numbers by 3.2m

UK Chancellor Rishi Sunak risks plunging around 3.2m people into poverty if he goes ahead with plans to cut universal credit.

The government decided to temporarily increase the support available in universal credit as a huge boost to millions of families in a period of crisis due to the coronavirus pandemic.

However, in 2021 these measures will be even more important, after other emergency schemes come to an end. From April next year, people who lose their job or whose earnings drop will not have other forms of protection, the Fabian Society said in its latest report.

“Huge numbers are likely to be affected, given expectations of widespread job losses,” it added.

The report expected poverty to rise by 1.1m people and child poverty to rise by 400,000 next year if there is no change in unemployment.

If there is a rise in mass unemployment, the number in poverty is set to rise by 3.2m and child poverty rises by 850,000.

The new Fabian report says that in the event of its mass unemployment scenario coming about, more than one in five people (22%) would be living in poverty.

Almost one in three children (29%) would be living in households with an income of less than 60% of the median, a level not seen since the early 1990s.

Andrew Harrop, general secretary of the Fabian Society, said: “If ministers reverse the temporary benefit rises that sustained millions of low income households this year the consequences will be enormous for families, reducing spending power and driving people into poverty.

“But it could get much worse. When furlough and other support measures come to an end in the spring, unemployment is expected to grow and many more families will turn to benefits.”