Therese Coffey has dismissed a proposal reportedly being considered by the chancellor to replace the universal credit uplift with a one-off £1,000 lump sum payment to claimants.
The work and pensions secretary told MPs it would not be her department’s “preferred approach” and stressed a “steady sum of money” would be more beneficial to claimants struggling through the coronavirus crisis.
The cabinet minister added she was unable to update MPs on whether the £20 per week uplift to universal credit – introduced at the onset of the pandemic – would be extended beyond March, despite intense pressure.
Ms Coffey, who is reported to be pushing for the payments to be maintained as the country continues to fight the pandemic, stressed that discussions were “still ongoing” within government and no decision had been reached.
But she added: “I’m absolutely resolute, as the prime minister has set out previously, we have the effects of this pandemic ongoing and we recognise the need we need to continue to support people”.
It is expected that Rishi Sunak will announce a final decision at the Budget next month, but is also reportedly considering a one-off payment of £1,000 or £500 to claimants to avoid the universal credit uplift becoming permanent.
“I am aware that idea has been raised,” Ms Coffey told MPs at the Commons’ Work and Pensions Committee. “It’s still a level of financial support for people which is welcome, but … that would not be one of the department’s preferred approaches on providing that financial support.
“But financial support nevertheless is underpinning that desire of it. We’re just not sure it’s the best way to deliver that.”
Pressed again, she added: “There’s an element of complexity. Previous experience would be that a steady sum of money would probably be more beneficial to claimants and customers to help with that budgeting process.”
“I wouldn’t say no to a one-off payment if in the end that was the decision that was taken because it’s still would be financial support.”
Her comments came after the committee heard evidence from charities that the uplift had been a “lifeline” for struggling families and argued a one-off payment “makes no policy sense whatsoever”.
Citizens Advice principal policy manager Minesh Patel told MPs the lump sum would not be a “feasible” approach to providing extra supporting during the pandemic, as he argued for people having a “stable regular income”.
“In research we carried out, people tell us that having a stable income is the thing that gives them most security in life, but we think that the best way to do that is through maintaining a regular payment through universal credit rather than a lump sum payment which can throw off people's budgets and how they manage their money,” he said.
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