Rishi Sunak is considering giving six million people a one-off £500 benefit payment as part of plans to fight off a rebellion over Universal Credit.
The lump-sum would be an alternative to continuing increased payments for Universal Credit claimants, which have provisionally been raised by £20 a week.
The enhanced payments were introduced for 12 months to support struggling families during the coronavirus pandemic and are scheduled to end in April 2021.
It applies to all new and existing Universal Credit claimants and amounts to an additional £1,040 over the year, but amid requests from Labour to extend the uplift, the Chancellor met Prime Minister Boris Johnson and Work and Pensions Secretary Thérèse Coffey to discuss alternatives to the £20 weekly increase.
It comes as the furlough scheme is due to expire in March, which experts fear could see a notable increase in unemployment.
However, it’s unclear how quickly the £500 payment could be dished out, or if it would be open to all Universal Credit claimants.
Resolution Foundation think tank chief executive Torsten Bell said that there are two challenges with this sort of approach, and he said that it doesn’t deal with the long term challenge, that their basic rates of benefits don’t afford enough protection when people have a hard time because they’re too low.
He said the second challenge, which relates specifically to protecting families, is that if they do it in a lump sum for people who are currently on Universal Credit, many people who become unemployed later in the year will not benefit, and it wouldn’t target those who need it.
He continued that the minimum the Government should do is extend the uplift for another year but the truth is that we need a permanently higher basic level of protection.
Rishi Sunak said he will hold off on announcing the decision on whether to increase the benefits uplift until the Budget on March 3.
It’s estimated about 50 Tory MPs representing seats in the North and Midlands have called on the Chancellor to extend the Universal Credit increase and business rate rebates for the duration of the third national lockdown.
Earlier this week, Boris Johnson stoked speculation that the Government will end the £20 uplift, telling MPs that the focus will be on generating jobs over welfare.
The Prime Minister told the Liason committee that what they want to see is jobs and that they want to see people in employment and to see the economy bouncing back and he said that most people in the country would rather concentrate on jobs and growth in wages than centring on welfare but that they had to keep all those things under review.
Everyone should be getting more help at this time, not just the workers.
Some people are going crazy at home with no money and no work, with some having to go to food banks, but then you have people working on the frontline doing a hell of a lot, getting precious little money, and some people are left with nothing.
Some people are hard workers but the pandemic has almost destroyed them and some would never have imagined that they would end up on benefits, but this is the situation they’ve been put in.
So, people should not be judged, particularly those who’ve fallen on bad times through no fault of their own and are now on benefits, because some have children to support and are now in debt and on the verge of losing their family homes and businesses.