Supporting the most vulnerable in society, including those who have lost their jobs through no fault of their own as result of the pandemic, is vital in a decent society. People must be given the help they need to get back on their feet.
The overall package of financial support provided by the Government in this pandemic has been colossal. This year alone around £400bn will have been borrowed. To put that in context, the entire national debt, accumulated between the Napoleonic Wars and 2007, was around £500bn. The IMF has stated that the Government's "aggressive" policy response to the pandemic was one of the "best examples of coordinated action globally", and has helped to hold down unemployment and the number of firms going bust.
On the specific issue of UC, under the existing arrangements, the uplifts remain in place until the end of March. I am assured that the Government will continue to assess how best to support low-income families in the economic and health context, and that decisions on the future of the uplift will be made later in 2021.
These are difficult judgements. A permanent increase to UC would cost approximately £5bn per year. That would mean, if funded by income tax, a family of two teachers each earning £30,000 having to pay £350 more each year in tax. Alternatively, it could be raised by increasing VAT to 21%.
It is important to note that in addition the Government has also introduced measures such as mortgage holidays, additional support for renters and has worked with energy suppliers to protect those struggling with energy bills to support those who need it most.
I know my colleagues in the Department for Work and Pensions remain focused on supporting people by helping them get back into work through the Government’s Plan for Jobs. This includes launching the Kickstart Scheme, which is backed by a £2 billion fund to create hundreds of thousands of new, fully funded jobs for young people.
I will pass the concerns you have raised with me on to my Ministerial colleagues as they consider future policy.
