Three in four Scots on Universal Credit will be 'unable to cope' with £1040-a-year welfare cut

The analysis from Citizens Advice Scotland (CAS) is warning of "devastating consequences" if the cuts go ahead.

It reveals that 26% said they would be unable to pay for essentials and 14% said they would be unable to buy food.

Almost four in ten clients (38%) said their outgoings had increased in the period before they had to claim for Universal Credit with a majority (56%) reporting that their spending had gone up on necessities like heating and electricity (50%), food (40%), and housing costs aside from rent (27%).

The government says that the booster payment that was brought in last year to help support people when the UK first went into lockdown is ending despite a wide range of voices calling for a rethink.

More than £9bn will have been spent on the uplift by the time it ends, the government says.

Single people under 25 are expected to be hardest hit by the change, because they have the lowest standard allowance for universal credit in the first place, at £344 a month.

When the uplift is cut that will fall by about 25%.

The open letter sent to Boris Johnson on Thursday was co-ordinated by the Joseph Rowntree Foundation (JRF) and says the payment drop "risks causing immense, immediate, and avoidable hardship".

The JRF estimates it will put 500,000 people into poverty overnight, while Citizens Advice says 2.3 million people could fall straight into debt.

The UK government plan to cut the payment in October with the latest figures suggesting it supports almost half a million people in Scotland.

CAS social justice spokesperson Nina Ballantyne said: “Increasing Universal Credit by £20 per week at the start of the pandemic was an absolute lifeline for people and a recognition that payments were too low.

“This shocking research shows that cutting the payment would have devastating consequences for lots of people, who will face impossible choices on bills and spending as a result.

“The cut will come alongside the risk of job losses as furlough ends, and increasing energy bills in October as the energy price cap is raised. That’s a perfect storm for people, and could sweep thousands into poverty and destitution.

“Three quarters of CAB clients said they would be unable to cope if the £20 cut goes ahead, and that their spending has gone up.

“That will be a reality for many people across the country, with almost half a million people supported by Universal Credit in Scotland according to the latest figures.

“There’s still time to cancel this cut and keep the lifeline."

The proportion of 16 to 24-year-olds claiming income-related benefits increased from 9% to 15% during Covid - a larger increase than any other age group, according to research from the Resolution Foundation.

The SNP said report shows "the welfare state isn't safe in Tory hands".

SNP work and pensions spokesman David Linden MP said: "The Chancellor must listen to the evidence and ditch these devastating Tory plans to slash the incomes of six million families, which would inevitably push more people into poverty and crisis.

"The UK already suffers from the worst levels of poverty in north west Europe - with many families living on the breadline and unable to afford basic essentials. These Westminster cuts would entrench inequality even further and prove the welfare state isn't safe in Tory hands.

"It's now clear beyond doubt that the Tories have no intention of building a fair recovery from Covid. Despite the empty rhetoric, they are taking the UK backwards by slashing incomes and forcing families to choose between feeding their children and heating their homes."

A UK government spokesperson said: “As announced by the Chancellor at the Budget, the uplift to Universal Credit was always temporary. It was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so.

“Universal Credit will continue to provide vital support for those both in and out of work and it’s right that the Government should focus on our Plan for Jobs, supporting people back into work and supporting those already employed to progress and earn more.

“Meanwhile, the Scottish Parliament has significant welfare powers and can top-up existing benefits, pay discretionary payments, and create entirely new benefits altogether.”

The spokesperson added: "We’re committed to putting more money in the pockets of hard-working families, which is why this year we provided a pay rise to 2 million of the UK’s lowest-paid through a higher minimum wage, while we’ll also help people earn more by levelling up opportunity."