Cabinet minister rubbishes Sunak’s plan to give Universal Credit claimants one-off £1,000 payment
Work and pensions secretary Therese Coffey has rubbished Rishi Sunak’s idea of giving a £1,000 lump sum payment to Universal Credit holders in what is a new front in an ongoing cabinet row about welfare payments.
Coffey told MPs today that Sunak’s lump sum payment idea, intended to offset a cut in a temporary uplift in Universal Credit, would be a “disincentive” for people to find work and could lead to fraudulent payments.
A £20-a-week uplift in Universal Credit implemented last year is due to end 31 March.
The chancellor is reportedly keen to see the measure is not extended, however the move has been criticised by some Tory backbenchers from northern areas.
Coffey has also indicated she would be in favour of extending the uplift.
Media reports have suggested Sunak is looking at giving Universal Credit claimants a one-off £500 or £1,000 payment as compensation for scrapping the uplift.
Coffey told Westminster’s Work and Pensions Committee today that she was not in favour of the proposal.
“There’s an element of complexity – we don’t know the length of quite how the economic impact of the pandemic will still be going on and previous experience would be that a steady sum of money would be more probably be more beneficial to claimants and customers to help with that budgeting process,” she said.
“How can I put it – I wouldn’t say no to a one off payment f that’s the decision taken, because it’s still financial support.”
When asked if a lump sum payment would act as a disincentive for Universal Credit seekers to find work, the work and pensions secretary said: “I think that’s a very fair point about disincentives.
“There are some challenges about fraud, there are some challenges about…say tax credit recipients receiving it and moving to Universal Credit very quickly afterwards.”
Labour passed a backbench motion two weeks ago to call for the £20-a-week uplift to be extended, after the Conservatives abstained on the non-binding vote.
In a letter to Coffey, shadow work and pensions secretary Jonathan Reynolds said: “For the government to abstain on whether people can afford to pay their bills would force unnecessary uncertainty on already struggling families.
“On behalf of the Labour Party I offer you our support if you chose to put aside party politics and work with us to support families through the pandemic.”