Replacing the £20-a-week increase in Universal Credit with a one-off payment of £500 is a “terrible” idea, Labour has said.
Chancellor Rishi Sunak is reported to be considering giving almost six million benefit claimants the cash payment instead of keeping the £1,000 yearly uplift in Universal Credit.
The Universal Credit increase was introduced last year to help families cope during the COVID-19 pandemic.
It is currently due to expire in April.
The Times reports that Mr Sunak is concerned that introducing legislation to extend the increase could mean it becomes permanent.
According to The Times, Mr Sunak is concerned that the increase could become permanent
A one-off payment of £500 – which would cost a total of £3bn – has reportedly been drawn up as an alternative.
“That is quite frankly a terrible policy,” shadow work and pensions secretary Jonathan Reynolds told Sky’s Sophy Ridge on Sunday.
Speaking ahead of Monday’s opposition day debate on the issue in the Commons, he added: “First of all, if you go ahead with this cut, you are reducing out-of-work support, unemployment benefits, to their lowest real-terms level since 1992 at a time when unemployment is about to peak.
“But of course the reason why a one-off payment is a bad policy is whilst we are talking about six million families being affected, those families will change throughout the year.
“Some families will go back to work, some will come out.
“We have had at times in the pandemic 200,000 new claimants coming on to the system in a single month so a one-off payment, a snapshot, completely fails to support those people.”
Foreign Secretary Dominic Raab said ministers had been clear the Universal Credit increase was a “temporary measure”.
“We always said this would be a temporary measure, I think it is right to look at it in the round,” he told the BBC’s Andrew Marr show.
“We have a March budget coming up and I think it is right to have scrutiny right the way through, but this is a political debate rather than the government’s measures which can, I think, be looked at in the round rather than dripped out one by one.”
Mr Raab also confirmed that Conservative MPs will abstain when Labour puts the issue to a vote.
The motion Labour will put to MPs will state: “That this House believes that the government should stop the planned cut in Universal Credit and Working Tax Credit in April and give certainty today to the six million families for whom it is worth an extra £1,000 a year.”
Mr Reynolds hinted that some Tory MPs may be preparing to rebel on the issue, telling Ridge: “I can’t predict what Conservative colleagues will do, but, yes, people have been in touch – there has been some productive conversations.”